A List of 20 Challenges That HR Departments Face Each Day

HR Department Challenges

Nearly every company that has more than a small handful of employees needs a human resources department. HR departments face challenges every day, many of which are routine, but they still require proper care and handling for the good of the business. Whether they’re challenges born out of ongoing change, challenges brought up by the growth of the business, or challenges of a different nature, handling them well is of the utmost importance.

Part of being able to properly handle a challenge is understanding it. As they say, forewarned is forearmed, so preparing for these challenges ahead of time is a powerful move. To assist the industry, we’ve put together a list of the most common challenges an HR team is likely to face within their organization.

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1. Attracting the Best Candidates

Figuring out how to make your business attractive enough to draw in the best possible candidates is a primary challenge for any HR department.

Attracting The Best Candidates

Everything from employer brand management to job posting composition to your benefits package plays a role.

“The HR game has become much more complex, requiring more strategy, creativity, and applied psychology than ever before.” – Talent Sorter

The key is understanding what your prospective candidates want, and figuring out how to position your company and your benefits in alignment with those wants. High-level candidates are always in demand, so you need to entice them with perks and benefits that make them want to join and stay with your business.

2. Proactively Adapting to Change

Change is the only constant. Businesses grow, often unexpectedly, in response to surges in interest and the convergence of hundreds of market factors. Businesses shrink, often unexpectedly, due to unforeseen pressures. Dealing with change is a key part of the role of an HR manager, operating as the strategic resource planner of the company.

Adapting to Change

Being able to adapt to change yourself is important, but more important is ensuring that the business can weather the change as well. Equip employees with tools to help manage change, keep the executive team in the loop about the future and direction of the company, and maintain clear and open communication as much as possible.

3. Developing Future Potential

The employees of today are the managers of tomorrow. We’re slowly exiting a period of corporate history wherein the traditional career trajectory stalled out, which led to a new culture of employees jumping ship for their promotions because internal growth was impossible.

Future Potential

Providing support for internal growth and learning is much more beneficial for a company because you can foster employee loyalty, develop grassroots knowledge, and maintain business continuity through generations of leadership teams.

Identifying and fostering the growth of nascent leaders is a critical component of the ongoing duties of an HR manager.

4. Fostering Continuous Learning

Stagnation is the ruination of any business venture. Even the most novel and in-demand product loses interest and sales if there’s never any innovation. Internally, a business only thrives when its employees can grow. Everyone should, as much as possible, be encouraged to learn, branch out, and expand their knowledge.

Continuous Learning

A key aspect of this is encouraging a culture of feedback. Employees, from the newest intern to the highest executive, should be willing to take feedback and adjust their perspectives as they grow. Teaching managers how to give good feedback, then, is essential.

5. Encouraging Diversity in Teams

Diversity is a key mandate for HR teams in the modern era. Globalization means that the world as we know it is getting smaller, while simultaneously expanding the scope of what your customers and your employees know, experience, enjoy, and suffer from each day.

Team Diversity

Diversity of experience and background within your teams is essential to a successful long-term venture. Diversity begins before hiring, with brand building, employee training, hiring bias training, and more.

“Among more than 128 different practices we studied, the talent practices which predict the highest performing companies are all focused on building an inclusive workplace.” – Bersin by Deloitte research.

6. Bolstering Health and Safety

The oppressive crunch of modern business practices and poor national healthcare has led to a crisis in general employment. Numerous studies have been performed showing that allowing more flexible health practices, sick days, and health-related benefits has a dramatic effect on boosting productivity, health, and morale. There’s a common impression that HR representatives exist solely to deny claims and force employees to come to work while sick, but the truth is, the best companies look out for their employees.

Health and Safety

HR can assist with health and safety through encouraging safety protocols, expanding health coverage, ensuring adequate staffing and an equitable division of labor, and even with empathetic training to assist employees with less physical health issues.

7. Leveraging Distribution in Workforce

As the Covid pandemic has increasingly shown us all, a distributed workforce can function just fine.

Leveraging Distribution

The fear that employees will slack off or lose productivity when left to their own devices is largely unfounded. Yes, using a distributed infrastructure is a shift for many companies, and not all of them can use a distributed staff, but those who can, might benefit from doing so.

In particular, leveraging a distributed team allows a company to gain a broader and more diverse staff, with much larger candidate pools than what is available locally.

8. Maintaining Legal Compliance

In enterprise-grade corporations, legal and compliance are their departments and may be served by outside auditors as well.

Legal Compliance

For small and mid-sized businesses, the responsibility often falls to the HR team. HR then must be familiar with federal laws, state laws, city regulations, local guidelines, industry regulations, OSHA regulations, and more. All of these need to be enacted and enforced, with proper reporting, auditing, and monitoring.

“Compliance issues make up a large chunk of most of the HR function and can impact everything from recruiting to outplacement. Compliance laws and guidelines can vary based on state legislation, industry, federal rule changes, and sweeping societal changes like the #MeToo movement. They can impact all parts of a business.” – Think HR

9. Reducing Unnecessary Turnover

Turnover is a massive expense for any business. The cost to hire a new employee when an old one leaves can be much higher than just their salary; it involves all of the job marketing, all of the hours spent on filtering candidate pools and conducting interviews, the cost of equipment, training, and much more. Thus, one of the best contributions an HR manager can bring to the table is reducing turnover rates in any way possible.

Unnecessary Turnover

A key element of reducing turnover is understanding why it happens. Exit interviews are, in particular, of critical importance. Understanding why people leave helps you address issues that led them to that decision, to reduce future turnover.

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10. Retaining Employees

While some turnover is inevitable, some can be avoided through generous retention policies.

Retaining Employees

Loss of skilled employees means not just a loss of a worker and the cost of their replacement, but the loss of institutional knowledge, the loss of morale if a beloved employee is leaving, and more.

“For retaining employees, human resource team plays an important role. The HR department is responsible for making efforts like training of employees, issuing bonus and other incentives, improving employee retention strategies and improving the workplace environment.” – Effortless HR

11. Minimizing the Impact of Turnover

Again, some turnover is inevitable, and while you want to reduce it as much as you can, you also need to spend time focusing on reducing the effects of that turnover when it happens.

Minimizing Turnover Impact

Some of this requires making modifications to your hiring process and maintaining active candidate pools of interested candidates. Some of this falls on workplace management, with proper attention to issues in the workplace and their resolution. Some of this simply requires enacting effective communication channels between employees and management, setting realistic goals and expectations, providing feedback, and enforcing transparency.

12. Reasonably Enhancing Productivity

There has been a constant push over the last several decades to boost the productivity of employees at all levels. The use of modern computational tools, algorithms, software, and hardware all push towards reducing the number of employees on staff, and making the ones that remain do much more work.

Enhancing Productivity

We’ve reached a breaking point where any further efforts to enhance productivity push employees past the point of burnout. Thus, part of the duties of an HR team is to mitigate these effects. Push back against management that tries to squeeze employees beyond their means. Review and reject the use of tools that put more burden on employees than their benefits. More productivity is good, but not at the expense of more turnover.

13. Insulate Against Uncertainty

The Covid pandemic has shown many companies just how uncertain the future can be. While another global pandemic is unlikely in our lifetimes, there are always unforeseen and unexpected events outside of our control that can, nevertheless, dramatically affect a business. Part of the duty of the HR department is watching patterns in the markets and the world, and taking proactive steps to insulate against that uncertainty.

Insulating Against Uncertainty

What can be done? Consider which factors are completely outside of your control, and which can be mitigated or protected. Develop a variety of short, medium, and long-term plans for various scenarios, including disasters. Implement strategies now that pay off later, as an investment into your company’s future.

14. Work Directly with Finance

Smaller companies might not have a dedicated financial manager or CFO.

Working With Finance

Larger companies will. In either case, the role of HR is to interface with the finance department (or to play the role of that department as well) and ensure that money is allocated where it needs to be. Primarily, you may want to focus on funding employee benefits plans, ensuring customers don’t rack up credit, manage taxes as necessary, and monitor overheads.

15. Monitor Organizational Performance

Overall performance is a key indicator of business success, but it can’t simply be measured in broad terms of profits, expenses, and sales numbers.

Organizational Performance

Performance means many different things to different departments. The role of HR here is to monitor performance for departments, for teams, and even for individual employees. Monitoring must be done sensibly, however, to avoid oppressive focus on KPIs over company goals, as well as employee burnout.

“While monitoring can improve employee productivity, simplify payroll, improve record-keeping and reduce legal liability, it can also sow seeds of distrust and fear among workers who aren’t so keen on having their every move tracked.” – SHRM

16. Understanding Generational Changes

There have been massive paradigm shifts in the coming generations. Millennials already showed how they can vary dramatically from their parents, but the coming of Gen Z and the generations that follow will continue this trend.

Generational Changes

What served to motivate employees in the past may no longer do so; these new generations are more immersed in modern technology, have a greater willingness to venture off on their own, and are seeking employment with a meaningful impact on the world around them. They no longer wish to be a simple cog in a machine that leaves them unfulfilled. Understanding this, and how it impacts everything from hiring to business practices to customer relations, is a huge part of modern HR.

17. Investing in Changing Technology

Some businesses are struggling to move away from paper, fax machines, and simple spreadsheets. Meanwhile, future-minded companies are investing in machine learning, cloud-based applications, wearable tech, and other forms of technology that are changing the way the workplace functions and the way the world works.

Invest in Changing Tech

HR needs to keep on top of changing technology and figure out how that technology can be used to benefit the business.

18. Providing a Fulfilling Experience for Employees

More and more, employees are focusing their efforts on companies that make a tangible change for the better in the world around them.

Fulfilling Experience

Employees wish to make an impact themselves or be part of a greater apparatus that does so on their behalf. Providing a fulfilling experience to these employees helps ensure their productivity and loyalty to the company. This means institutional transparency, as well as individual signs of fulfillment for each employee.

19. Handling Sexual Harassment

An unfortunate reality is that gender discrimination and sexual harassment are rampant in many companies. This harassment and discrimination suppresses talent and motivation for entire subsets of employees and reduces the overall diversity of a company and its teams.

Sexual Harassment

The role of HR is at once to defend the company and to defend employees; properly handling harassment claims requires rooting out the truth and taking steps to remove problem elements, even if that means cutting loose an otherwise productive executive.

20. Doing a Bit of Everything

Every item above is worthy of a full-time role within a large enough company, and as such, an HR department requires adequate staffing, training, resources, and technology necessary to manage it all.

Doing a Bit of Everything

HR doesn’t merely look outwards into the rest of the company. It needs to look inwards, towards the organization, its technology, and its structure. Introspection is just as important for HR as its role within the rest of the company. A craftsman must maintain their tools, after all.

Are there any challenges your organization faces that we left out? Do you have any questions for us? Let us know in the comments section down below! We respond to every constructive comment we receive and would love to hear from you.

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