The workplace experienced a profound transformation over the past few years due to the lingering effects of the global pandemic. This shift in work culture also impacted the Human Resources department.
From the widespread adoption of remote work and flexible schedules to the heightened focus on employee well-being and mental health, the scope of HR responsibilities has expanded significantly. In a Paychex survey of 1,000 HR professionals, 98% of respondents said that the pandemic transformed the HR role within their organizations.
While this shift presents new challenges in HR, it also offers opportunities to develop stronger, more adaptive organizations. By introducing change management techniques, organizations can employ strategies to proactively address these challenges in HR and position themselves for long-term success.
The following article discusses the ten most common problems in HR and strategies to resolve these issues.
The Most Common Issues Facing HR
The following list represents some of the largest challenges in HR. From attracting and retaining top talent to ensuring employee engagement and staying compliant with legal frameworks, these issues should be considered in any organization’s HR problem-solving strategy.
Attracting Top Talent
The value of attracting high-performing employees cannot be understated. High-performing employees are four times more productive than the average employee, with one study showing that the top one percent of employees are responsible for 10 percent of a firm’s productivity.
Retaining high-quality employees is equally critical and often proves to be a challenge.
Retaining key members of an organization fosters stability and contributes to team cohesion as relationships deepen among staff. Conversely, a constant revolving door of employees can negatively impact an organization’s morale.
Recent years have seen a concerning decline in employee engagement globally, with the issue increasing since the onset of the pandemic. According to Gallup, in 2022, just 23% of the world’s employees reported being engaged at work, which has cost organizations about $8.8 trillion in lost productivity, equivalent to 9% of the global Gross Domestic Product (GDP).
Compliance & Legal Issues
With over 180 federal laws governing areas ranging from minimum wage to paid leave and new state laws being introduced annually, HR managers face a challenge in keeping their organizations compliant. For organizations with over 25 employees, falling out of compliance can be financially devastating, with noncompliance incidents carrying an average cost of approximately $14.82 million.
HR departments routinely deal with personal data such as employee records, financial information, health records, and more. Ensuring the privacy and security of this data is not just a legal obligation but also a matter of trust and reputation.
Perhaps most significantly, mishandling or employee data breaches can lead to significant legal and financial consequences. According to the IBM Cost of a Data Breach Report 2023, the global average cost of a data breach in 2023 totaled $4.45 million, 15% higher than in 2020.
The Causes of Issues Facing HR
Looking at the list above, the common problems in HR break down into three major categories:
While there are many complex contributing factors, many of the issues in HR stem from the changes in our world over the past few years.
Between April and September 2021, a record 24 million American employees left their jobs, signaling the era of the Great Resignation. Workers now have more choices than they did pre-pandemic due to a record-low employment rate and the largest talent shortage of the past fifteen years. With companies competing aggressively for the best candidates, job seekers are in a place to compare the best offers available.
The significant technological changes over the past few years have created opportunities and headaches for HR departments. New digital tools are regularly introduced to enable automation, communication, and other important functions. But as technology increases, so do the potential pitfalls such as data breaches.
Increasing regulation has also emerged as a cause for some of the thorniest challenges in HR. The pandemic resulted in new protections for workers regarding issues like paid time off and worker classification, further muddling the regulatory landscape.
Strategies for HR Problem Solving
The following section introduces various strategies to address the most common problems in HR. By employing these HR strategies, organizations can stand out to high-quality job seekers, deepen relationships among their staff, stay in legal compliance, and head off any unexpected changes impacting the workplace.
Strengthen Data Security
With the increasing regulations and the global focus on data protection, HR managers must stay current with laws like the General Data Protection Regulation (GDPR) and the Health Insurance Portability and Accountability Act (HIPAA) to safeguard employees’ personal information.
In an era of growing cybersecurity threats, HR managers can strengthen their organization’s data security by:
- Using firewalls, data encryption, and two-step authentication
- Utilizing an enterprise-level password manager
- Training staff on safe internet practices, such as recognizing phishing scams
- Managing third-party access
- Backing up data regularly
- Instructing staff to create strong passwords and change passwords every 30 days
- Regularly testing security
Offer Mental Health Training
The upheaval of the pandemic brought conversations about employee mental health to the forefront. As a result, more organizations offer mental health training and counseling to create a more inclusive and empathetic workplace culture, reduce stigma, and encourage open discussions about mental health.
Mental health training equips employees with the knowledge and tools to recognize signs of distress in themselves and their colleagues, along with encouraging early intervention and support. Moreover, mental health training can improve productivity, lower absenteeism, and increase job satisfaction.
Allow Flexible Work Arrangements
Adjusting to remote and hybrid work arrangements became one of the most startling changes in recent years. Over 12% of full-time employees work remotely as of 2023, and 28.2% work a hybrid model, where employees split remote and in-office duties.
Additionally, more organizations offer flexible schedules outside the typical 9 to 5 to accommodate employee’s schedules and provide a healthy work-life balance.
With flexible work arrangements becoming the norm, job seekers increasingly expect these perks. If possible, HR managers should explore remote, hybrid, and other flexible work schedules to attract quality candidates and serve as retention strategies for their current workforce.
When establishing remote work policies, HR managers should consider whether employees have the necessary tools and support to carry out their duties effectively and decide how to maintain clear communication channels.
Offer Valuable Benefits
Strong benefit packages remain one of the strongest retention strategies for HR managers. In a Metlife survey, 73% of employees said they would stay longer with an employer if offered more benefits.
According to Metlife, the top five most important benefits included:
- Health Insurance
- Paid Leave
- 401(k) or Other Retirement Account
- Dental Insurance
- Vision Insurance
However, HR managers will need to tailor a benefits package to the needs of their workforce. Other less traditional forms of benefits include flexible spending accounts, financial wellness programs, and health savings accounts.
Promote Diversity and Inclusion
Promoting diversity and inclusion in the workplace helps broaden perspectives within an organization by creating an environment where all team members feel valued.
These are not just initiatives but long-term cultural shifts that demand continuous attention and adaptability. As a result, diversity and inclusion goals should be realistic and measurable, enabling organizations to track progress and see where they need to improve.
Create or Update the Employee Handbook
An employee handbook serves as a centralized document that communicates an organization’s policies, procedures, and expectations. The handbook can reinforce the company’s culture and values, helping employees understand what makes the organization unique and what’s expected of them in terms of behavior and performance.
A handbook with clear policies and procedures can help reduce risk by ensuring compliance with labor laws, health and safety regulations, and other legal requirements. It can also help settle employee disputes by serving as an ongoing reference for an organization’s policies.
When creating an employee handbook, HR managers should be sure to at least include the following information:
- The organization’s history and mission
- Policies such as dress code, working hours, conduct, and other expectations
- Compensation and benefits
- A list of holidays and paid time off
- Compliance with federal, state, and local laws
Focus on Company Culture
According to a study by MIT Sloan Management Review, a toxic culture was the top predictor for employees wanting to leave their jobs, with culture being more than ten times more important than compensation. The survey shows that one of the most powerful retention strategies involves cultivating a positive, supportive company culture.
HR managers can help implement a healthy company culture from onboarding throughout an employee’s tenure by encouraging collaboration, scheduling meetups among the team, and providing avenues for career growth within the organization.
Engage Passive Applicants
Passive job applicants represent those who are not actively seeking a new job but might be open to new opportunities. These applicants make up 70% of the workforce and can often be of higher quality than active job seekers.
HR managers can engage passive applicants by:
- Creating a strong online presence to establish an organization as an employer of choice
- Using social media platforms such as LinkedIn to connect with candidates
- Highlighting opportunities for growth and advancement
- Providing valuable content such as white papers and blog posts
- Engaging through online forums, industry associations, and industry-specific communities
How To Implement Change Management
Change does not happen on its own but requires HR strategies that help guide and sustain change over time within an organization. Change management is a strategic process that involves careful planning, communication, and support to help employees adapt to new organizational changes.
Implementing change management does not happen overnight, as it requires sustained attention and flexibility to address the most common problems in HR.
Here is a list of the key steps to effectively implement a change management strategy:
- Create clear objectives: Employees and management should address how and why an organization is implementing the changes.
- Establish a change management team: Assign key roles in an organization to lead the execution of the change management strategy.
- Develop a communications plan: Decide how the changes will be communicated with staff, outlining when and how the changes will be implemented.
- Provide training and support: Meet with staff to communicate the changes, listen to any employee concerns, and provide training and resources that support the ongoing change management protocol.
- Implement the change: Depending on the organization, changes can be introduced gradually or all at once. HR managers should ensure that all systems and processes are in place to support the changes.
- Monitor progress: Continuously monitor the progress of the changes to see what works and what doesn’t work by using measurable key performance indicators (KPIs).
- Adjust as necessary: HR managers should be ready to adjust if aspects of the plan do not work and find more appropriate solutions.
- Sustain the change: A change management plan isn’t over once it’s implemented but requires consistent monitoring, adjusting, and implementation over time.
Organizations can implement an effective change management strategy that lasts well into the future by analyzing the various challenges in HR and devising targeted solutions.
Addressing the most difficult challenges in HR takes time, focus, and consistency. But, by embracing a holistic change management strategy, HR managers can attract and retain high-quality employees, stay compliant with the law, and create a positive culture that boosts an organization’s reputation and bottom line.
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