Relationship Between HR And Business Strategies

HR is an integral part and the essential department of an organization. The level of resources allocated to the HR functions varies for different organizations. The human resource department is considered one of the most valuable assets of the company. When linked with a strategic business plan helps the company gain a competitive advantage in the market.

In a business setting, Strategic decision-making has to be done by considering both the internal and external factors and their context. The internal factors can be the organizational structure and the company’s mission statement. 

These factors usually affect the structure of selection and appraisal of employees. The external factors include the political, cultural, and economic forces that may impact the business.

The human dimension of an organization’s strategy involves managing and fostering employee relations. The human resource represents the potential value of workers to achieve organizational goals. 

Employee relations management includes implementing specific policies and taking necessary actions regarding employee’s behavior and attitudes to achieve organizational goals. 

Relationship Between HR Strategies And Business Strategies

When implemented correctly, Strategic Human Resource Management can be very effective in an organization. HR strategies and business strategies, when combined, can be very beneficial to the organization.

It acts as a valuable tool to help companies identify new opportunities and analyze internal and external threats. In addition, it also helps to provide a clear business vision and strategy. To maximize employee’s potential within the company, it is vital to implement a strategic selection process of employees to get the right people with the right skills into the most influential positions. 

Aligning HR Strategies With Business Strategies 

The following are few steps to be followed to align HR strategies with your business strategies:

  • Define Success 

To make more efficient business decisions, the HR department needs to understand the business’s strategic goals. When the organizational objectives are not clear, it can be challenging for the HR department to align with these objectives or strategies and support them. 

When the HR strategies align with your business strategy with clear set goals, they help increase productivity and reduce cost, thereby moving the business towards success.

  • Align And Set Your HR Strategies 

After setting clear organizational goals, the next step is to articulate the HR goals. HR strategies need to be planned to increase retention rate while decreasing the turnover and increasing productivity with a more efficient onboarding process. 

As the HR department plays a crucial role in promoting a company’s success, setting proper strategies and aligning them with business strategies is crucial. 

  • Formulate Actions To Achieve These Goals 

Developing a proper plan of action is the next step in aligning your HR strategies with business strategies. Companies must create specific targeted actions to actualize objectives and achieve organizational goals.

It can be done by creating employee surveys to understand the employee satisfaction rate and then take necessary actions to improve their satisfaction level. It is crucial because satisfied employees are motivated to be more productive, thereby making it easier for companies to achieve organizational goals.

  • Measure The Effectiveness 

The final step is to focus on the effectiveness of the campaign. With the alignment of the human resource department and including data-driven goals, it is easy to ensure that decision-making aligns with business goals and helps meet these goals. 

The HR team can measure the performance by analyzing data from marketing, sales, and accounting teams to ensure the departmental strategies align with overall business strategies.

One of the vital components of linking business strategy to human resource strategy is to develop an organizational culture of clear communication and build trust within the company. 

In addition, higher levels of trust and respectability between employees and the management team can be developed when employees are encouraged to become involved in various aspects of the business strategy. This trust is built with knowledge sharing, which allows employees to share in the organization’s vision and goals. 

The right strategy, therefore, helps organizations retain talent and develop highly competent employees.


Various factors affect the relationship between human resources strategy and business strategy. Therefore, Executive leaders must first understand the importance and benefits of aligning HR strategies with overall business strategies. 

Therefore, business owners should develop forward-thinking concepts and build a strong relationship with employees for effecting change in your organization and achieving your organizational goals.