Aligning business strategies with HR policies

As Alberta-based companies change, either through an acquisition or necessity, aligning their human resources programs with their business strategy is paramount. But to the surprise of many, having a one-size-fits-all philosophy where all employees are treated equally is not actually the best approach.

“It’s very difficult for organizations to come to terms with this because you have to admit to yourself that not all employees provide the same value to the company and that’s the challenge for organizations,” says Louise Wilson, director of the People and Change practice at PricewaterhouseCoopers LLP in Calgary.

Companies that are truly aligning their business strategy to their people programs are assessing what key capabilities are required. There’s been a dramatic shift in the oil and gas industry in terms of their business models and the kind of expertise that’s required.

As an example, says Wilson, a company may need geologists or engineers with experience in the exploration and development of unconventional reserves. Giving these employees the same suite of talent management and rewards packages as every other employee in the company may not be sufficient to attract or retain them.

“Therefore, when developing people programs, they should be developed for specific employee groups because they’re strategic to a company’s ability to be successful,” Wilson explains. “Companies should spend less time on areas that are not strategic because the impact of losing talent is less significant on the business strategy than in other areas.”

Attracting and retaining that talent can be a challenge for employers in the oil and gas sector, especially smaller ones. They’re competing with some global players who are able to buy the talent they need, creating fierce market conditions.

She says smaller employers are now starting to see the folly of the buy talent mentality and are building people programs that employees are asking for, which aren’t solely based on compensation but rather a total value proposition that encompasses personal growth, career development and work environment.

There are a few steps that companies need to take before aligning their people and business strategies. First, there has to be a clear vision of what needs to be achieved or a problem that needs to be solved. And there have to be leaders aligned around that vision or committed to solving the problem.

Next, the benefits of the change should be stressed and communicated to employees. Everyone should have a clear understanding of what the goals are, why they're important and what steps need to be taken to meet them.

Then the people programs, performance management systems training and employee development should be aligned with the business strategy. Once completed, outcomes need to be measured.

With a number of oil and gas assets up for sale in Alberta, another challenge for companies is a merger or acquisition where it is necessary to integrate two likely very different corporate cultures.

“The key to a successful merger or acquisition from a people perspective is for the organization to be able to address the people issues as soon as possible,” says Wilson.

Employees need to be inspired and re-engaged to rebuild their trust and commitment to the organization. It’s particularly harder for employees of the company that’s acquired.

In a merger or acquisition, the power dynamics of an organization are going to shift. There is always one organization that dominates the other, even in a so-called merger of equals.

“That shifting power dynamic and uncertainty about job loss really destabilizes organizations,” she explains. “The longer that goes on without a resolution, the worse it is for employees and the combined company.”