5 things you need to know when developing your people strategy

There’s no getting away from it: if you want your business to succeed, it’s getting more and more important to have a clear strategy and plan in place for your people. But what are the prevailing workforce conditions most likely to impact your thinking in this space for the next few years?

Here are five things you need to consider when developing your people strategy for the year ahead.

1. Tighter labour markets will continue

There’s a shortage of people, especially in most Western countries. Even a recession this year isn’t going to change this situation all that much, so we expect even the very best employers will have to keep working hard to attract and retain the people they need. Employees will continue to have more choices than they used to have.

2. Remote working is here to stay

Most employers are going to have to keep thinking creatively about the workplace – and what work needs to be done face-to-face and when – supported by greater flexibility in working patterns for both remote workers and office- or site-based workers. Those that crack this conundrum will continue to have the pick of the best talent. Don’t forget, though, that this requires your managers – many of whom will be from an older generation – to be supported to think differently about what ‘supervising’ their team means.

3. Pay rises can’t be paid for without performance

Most companies simply can’t pass pay rises associated with the current cost-of-living crisis onto their customers – and nor can they take on debt to fund pay rises that aren’t justified. So, while we have enormous sympathy for all workers seeking pay increases right now, some of those aspirations will have to be tempered. One of the things we see some employers doing instead is getting a whole lot more creative about other parts of the employment package – more time off and additional insurances and healthcare options are all choices that could be appreciated, and might cost you less.

4. Happy employees are much less likely to quit

Mental health and wellbeing support are still growing in popularity because stress and burnout touched all-time highs during Covid-19, and this represents a major shift in previous thinking. Employees do need greater support during tougher times and they’ve come to expect more in this regard from their employer. With people having more choice now, those employers who provide extra workplace support – and who keep asking their people how they’re doing, thinking and feeling – will give themselves an edge when it comes to attracting and retaining staff. When employees are looked after they become happier at work, are more likely to be more productive, and much more likely to stay put. So, investing in employee listening genuinely makes sense and has a payback.

5. Diversity, Equity and Inclusion has to become a broader business issue

This is not only an HR problem to fix, and it’s becoming more important – particularly for employers looking to recruit younger workers who care more about social justice and their employer’s purpose and mission. They want to work at places where the team at the top looks more like the rest of the business, and society at large. So, if you’re looking to attract younger people, you’re going to need to accelerate change inside your business in terms of your workforce mix. This has implications for a very wide range of employment policies.