Strategic Planning for 2025: What Business Leaders Need to Know

Strategic planning is critical in today’s uncertain business landscape. But many organizations start that process with a flawed assumption that harms their ability to innovate: sorting departments into profit centers and cost centers. Seen through that lens, it’s easy to justify investing in the parts of the organization that seem to bring in money while cutting everything else to the bone.  

Reality is much more complex. A division may not directly bring in revenue, but it might reduce costs or accelerate revenue opportunities elsewhere in the business. Without investment in those areas, businesses stagnate and struggle to handle disruption. The “profit center versus cost center” narrative endures because it is simple and easy to understand. To beat it, leaders need a better story.

“HR typically goes up to the CFO and says, ‘Hey, we need to invest in this new initiative, or hire these new people,’ or whatever it might be. And the CFO says, ‘No, we’re not going to do that.’ And HR is very quick at saying, ‘Oh, OK, sorry, my bad,’ instead of putting together a really solid ROI analysis,” said Jared Olsen, vice president of people experience at Lehi, Utah-based software company JobNimbus.

This dynamic is familiar to business leaders from many departments, not just HR. Strategic planning often looks at departments in silos, focusing on departmental objectives and processes, rather than company-wide growth, which makes it difficult to demonstrate alignment between the department and the organization’s strategic goals. “We’re not often involved in the strategic conversations,” said Olsen, advocating for leaders to take a proactive approach to strategic planning. “I think we need [to], a little bit, blow up best practices and say, ‘What does the business need?’ ”

To secure strategic investments for their departments in 2025, leaders must learn to tell a clear, data-driven story about how those investments will drive organizational growth.

Storytelling with Data: Connecting Talent Strategy with Business Objectives 

When assessing workforce capabilities and resources for 2025, it’s crucial to look at talent investments through a strategic lens. SHRM finds that organizations are over three times more likely to be highly effective at shaping a strong organizational culture when HR’s strategic road map is aligned to the organization’s business strategy. Whether in HR, finance, or operations, alignment of departmental initiatives with business objectives is critical to ensuring ROI and having the data to support workforce planning decisions.  

“You need to be able to go to your CEO and say, ‘If you want us to hit the ambitious revenue target we’ve set for next year, our talent strategy needs to strategically support the vision,’ ” said Erica Young, director of HR solutions consulting at SHRM.

However, leaders need more than data to secure budget approval—they need to weave data into a compelling story that aligns with the company’s growth objectives. Paint a clear picture of how investments will shape the future success of your organization. If leadership can’t envision it, they won’t invest in it.  

“Investment requests need to be tied to a business case, and that business case needs to involve an analysis of internal and external data inputs,” Young said. “Within the business case, it’s helpful to connect the purpose of the organization—the vision, mission, and values—with the strategy, like growing revenue by a certain percentage. Then, that strategy should be backed up with a plan of execution, detailing who is involved and how and when it will be carried out."

The “4 P’s” of Strategic Planning

SHRM has identified four essential elements of strategic planning—people, productivity, profitability, and prosperity—that need to be part of any strategic investment request. Focusing on the “four P’s” enables leaders to craft data-driven stories and demonstrate how their strategies drive both departmental and organizational growth.

People: Growing businesses need a human-centric strategy. Connect strategic business goals directly to your people strategy by assessing skills gaps, planning for future talent needs, and fostering a culture that supports development and retention. The right people-focused approach will ensure you have the talent necessary to meet both current and future demands.

Productivity: The right talent strategy drives higher performance through talent optimization—aligning employee roles, skills, and development opportunities with organizational goals. Prioritize the development of your team to ensure that each investment in talent leads to measurable performance gains.

Profitability: Optimized productivity leads to profitability and better business results. A targeted focus on retention, engagement, and the right talent mix not only reduces costs, but also strengthens revenue potential. By connecting people strategy with business outcomes, leaders can demonstrate how their plans directly contribute to the organization’s financial health.

Prosperity: Profitable businesses are more resilient, contributing to a strong economy and better jobs. Leaders who monitor market trends and anticipate future workforce needs position their organizations for long-term prosperity. By leading with foresight and adaptability, leaders ensure their strategies support resilience and growth.

This framework is focused on HR investments, but a similar approach can help leaders in any department explain how their proposed investments relate to the business’s strategy.

Bringing Data to Life

Storytelling without data is insubstantial. Data without storytelling is unpersuasive. Leaders must use trustworthy data to tell a convincing story that connects what their department does to the larger business strategy so other leaders can see the big picture. You need to be able to say, “Here’s what the return is going to be by us investing in this, or hiring this person, and focusing on talent density,” said Olsen, reflecting on the data-driven approach his team at JobNimbus takes to talent strategy.  

Leaders often have a handle on the first two of the four P’s: people and productivity. More than half (51%) of executives say upskilling and reskilling investments would produce the biggest increase in productivity in their organizations, according to Mercer’s 2024 Global Talent Trends Study. They understand the value of finding top-tier talent and creating collaborative teams where employees can do their best work. However, just 19% of HR executives expected to be able to increase their department headcount in 2024, according to the 2023-24 SHRM State of the Workplace Report.

Talent investment gaps happen because business leaders need a keener understanding of how talent factors into the profitability and prosperity of their organizations. The cost to hire a new employee can be three to four times the employee’s salary. When organizations undervalue the impact of efforts to improve retention, decrease time-to-hire, or improve time-to-productivity for new hires, they can end up incurring significant talent costs that could have been avoided with prudent talent investment.

“HR Leaders should be able to approach senior executives and demonstrate, based on external market trends and internal talent data, how an investment is going to impact the organization. They should be able to connect talent strategy to business objectives by quantifying talent behavior and aligning it to ROI,” said Young.  

Reframing HR as a Strategic Partner

At JobNimbus, HR takes a strategic approach to align talent investments with business goals for sustained growth. The HR team, led by Olsen, leverages data analytics and SHRM’s storytelling approach to secure investments and meet company goals. “It starts with us being able to talk more to the business, and less about saying, ‘Oh, I don’t think we can do this because of this latest employment law,’ ” he said.

Olsen explains how HR departments like his are traditionally excluded from strategic conversations, such as those around net revenue retention strategies, or how to optimize for earnings before interest, taxes, depreciation, and amortization (EBITDA). However, his department has been able to reframe the role of HR in workforce planning. Rather than executing talent strategies in reaction to external forces, Olsen’s team takes a proactive and strategic position, aligning talent management with economic conditions, emerging trends, and business needs. “Being able to hit on all those key things is a muscle I don’t think we often flex in the world of HR,” he noted.

To secure investment in talent strategy, Olsen emphasized the importance of having data that demonstrates ROI on past talent investments and knowing the numbers down to exact headcount. He posed a question for leaders: “Do you have a dedicated analyst on your team? The data scientist who’s really understanding what’s happening within your [organization] from a people perspective?”

By grounding discussions in data, JobNimbus’ HR team can articulate the ROI of employee productivity and development decisions in clear, measurable terms. For example, the team assesses talent density, analyzing whether hiring one high-performing individual at a higher salary is more beneficial than hiring multiple employees at a lower cost. “What if we blow up the pay band and hire one person at twice the cost of two people?” Olsen asked. By reframing talent through the lens of productivity and profitability, the team ensures each hire aligns with long-term business gains.

Another key metric at JobNimbus is employee lifetime value (ELTV). This metric “is emerging, and no one’s talking about it,” said Olsen. “It’s so important.” He explains that if organizations calculate ELTV for every position in a company, they can determine how talent strategy directly affects prosperity. At JobNimbus, ELTV allows HR to continuously build on talent bases, enhancing productivity and profitability through well-calculated people investments.

JobNimbus’ data-driven approach not only contributes to profitability, but also fosters a culture of accountability and innovation. By redefining HR as a strategic business partner, the team enhances its perception within the organization. “As we can think more strategically as a profession on how to drive real business results,” said Olsen, “that will change the perception of what our profession can do for other people.”

Takeaways: 3 Steps to Effective Strategic Planning  

McKinsey & Company finds CEOs are 36% less likely to involve HR in strategic decision-making when they perceive a gap in HR’s ability to provide informed expertise and market insights—a phenomenon that leaders across departments are often too familiar with in today’s evolving landscape.

Expanding knowledge of data insights and broader business objectives—such as operations and finance—is critical for leaders to take a more strategic role in driving business results.

Here are three considerations when approaching strategic planning for 2025:

1. Diagnose: Identify your department’s direct impact on the business. Ask yourself: Where are we today? What should we be measuring, and how does it align to whatever business objective we need to achieve?

2. Develop: Refine a data-driven storyline linking current results to past investments. Effectively demonstrating ROI on your strategic decisions through a compelling story is key for optimal investment. 

3. Evolve: Articulate how future investments are essential to achieving the strategic goals your organization is already committed to. Leverage external data demonstrating possible disruption to your business—such as economic shifts, technological advancements, and adaptations in policy—to alter your approach.  

While the market will continue to shift and strategy will evolve, making a strong business case for investments will always be crucial. To support the ongoing alignment of HR initiatives and business objectives, SHRM’s road map helps organizations optimize resources and refine strategies to generate optimal success.