Four Biggest Challenges HR Faces Today

The role of Human Resources has been steadily changing to keep pace with the accelerated rate of business growth and change in the 21^st century. While some of this change is due to things like government regulations and increasing globalisation, much of it is due to the rapid evolution of technology and more sophisticated business processes.

Since the role of HR is to help companies operate cost effectively, many things that used to be part of HR have to be outsourced to third parties to free up internal resources and avoid getting overwhelmed by strategic issues.

Making Time for Strategic Initiatives

For HR to continue to be effective for 21^st century corporations, it has to continuously reexamine what it does. Highly efficient, dynamic HR departments have to frequently refine their best practices to make the best use of their time.

HR, for instance, has traditionally been responsible for handling wage payment issues. However, this can be extremely time-consuming because of its complexity, especially if a company is hoping to adopt electronic payroll and wage statement methods. In the meantime, HR is tasked with four challenges that it has to keep on top of to keep the lights on. The four strategic initiatives it must spearhead are recruiting the right employees, retaining good ones, developing future leaders, and creating an organizational culture.

The solution to this problem of having too much to do, too little HR staff to do it, and too little time to get it all done is to outsource wage payment to a reliable third party organization so that there is enough time and energy to focus on recruitment, retention, leadership, and culture.

Let’s take a closer look at these four challenges:

The Recruitment Challenge

Out of all the issues HR faces, the biggest is recruitment and retention.

Recruitment is important to attract enough talent to keep the company in business. Old methods of recruitment like promotional mailings and job fairs are becoming increasing ineffective. While they might still work for entry level positions, those who are well-qualified for more demanding technical positions rarely respond to them. Consequently, HR has to use social media and create carefully-worded postings on competitive online job boards.

In addition to finding people, HR also has to offer better incentives to attract people to work for their company. The new generation of employees isn’t just looking for competitive paychecks, but also for work-life balance, flex-hours, telecommuting option, and a chance to get company-sponsored technical training.

Diversity is important for new ideas, ethnic balance, better productivity, and a sense of equality. All these factors are necessary to stimulate cooperative and multi-talented project teams.

All things considered, the biggest challenge for HR working in technology-driven businesses is finding enough technical talent to fill niche positions. It’s often difficult to find candidates with the training and core competencies to do specialized jobs.

The Retention Challenge

Once HR has gone through the hard work of finding the right talent, the next challenge is keeping retention high. This has become increasingly difficult in the past few years, especially for companies that require a highly skilled workforce. It can frequently be difficult to keep top employees from leaving for a competitor who offers more pay and better benefits.

Here are some of the key ways companies work to improve retention:

1. Identifying key employees from the time they join, even if it’s at an entry-level position. These are then encouraged to take the necessary career training they need to get to upper-level management.
2. Offering merit pay increases over time and upping employee perks.
3. Giving employees projects that gradually stretch their responsibilities.
4. Providing employees with lifestyle benefits like telecommuting, flex-time, a gym, or the use of high tech devices.
5. Creating ways to increase engagement and motivation.
6. Offering positive reinforcement to team members.
7. Coaching promising employees to become top performers.

The Leadership Challenge

The workforce is experiencing a unique generational challenge. Experienced baby boomers are retiring and they need to be replaced by able millenniums. Since there are often dramatically different value systems between these two different generations, this is not an easy task. In fact, there is often conflict between the two generations. Baby boomers may see millenniums as lazy and entitled while millenniums often see baby boomers as bureaucratic and technophobic.

HR faces the challenge of developing future leaders by training its millennium employees to take on the roles being vacated by baby boomers. This requires a budget for employee development programs that focus on leadership growth.

The Corporate Culture Challenge

The final challenge HR faces is developing a winning organizational culture. Research has repeatedly shown that a company with a strong organisational culture will improve along all relevant performance metrics, including productivity, attendance, loyalty, and delivering customer satisfaction.

A company with a strong organisational culture will be more successful than one that has no clearly defined culture for the following reasons:

1.  There is a much lower rate of employee turnover and less risk of top talent being recruited by competitors.
2.  By retaining top talent, a company is able to continue to develop innovative products.
3. It is much easier to attract new employees once they discover a company has an attractive corporate culture.
4. Employee engagement tends to be higher because employees derive a sense of identity and pride from helping their organisation flourish.