Does your organization have an HR strategy aligned with and building the people capabilities to deliver your business strategy? If not, it’s likely that you are both missing out on achieving your business goals and failing to get the best from your people.

Don’t take my word for it, there is a library of research that supports this conclusion. If you have any doubts, I recommend reading McKinsey’s work on ‘People + Performance Winners’ and much of Gartner’s reporting on HR Strategy.

The real question is not whether an aligned HR and people strategy is needed, it is how to build one.

My colleague Steve Botterill of the Resourceful People Group and I have spent many years as HR Directors in UK and international businesses working to develop people strategies that enable business success. We have spent the last 12 months investing this experience in developing a model we are now ready to share through our HR consulting work.

Our experience tells us that building strategic HR capability is a journey for organizations. We think there are three clear stages in that journey and we are happy to share them in our HR Value Framework.

Many businesses start with, and some never move beyond, what we call a Transactional HR approach. This is where the focus of HR work is on compliance and administrative tasks such as contract generation and pay queries. Unlocking more value from HR requires putting in place robust policies and practices for each stage of the employee life cycle – we call this Functionally Competent HR. The third and final stage of our model is Strategically Aligned HR. This is where HR focus and priorities are driven clearly from the business strategy and build the people capabilities to execute that strategy, while also ensuring people practices integrate in a unique and compelling employee experience.

If building strategic HR capability is a journey, it’s important to understand where you currently stand on that path and what to tackle next. We have created our HR Value Audit to help organizations do just that. Assessing competence in six core elements of HR capability we can evaluate HR’s current contribution, identify focus areas for improvement and work with clients to build a roadmap to unlock more value and strategic focus from HR.

We believe this is a model that can equally help SMEs build their HR capabilities as they grow and larger businesses review and improve the contribution of their HR teams.