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7 Main HR Challenges and How to Address Them

Main HR Challenges
Categories: Productivity
10 minute read

HR revolves around shaping the workforce in a way that keeps a company humming. In short, managing people and the challenges they come with.  

But, as any HR professional is well aware, it’s not as simple as it sounds. HR departments have to focus on maximizing cost savings and pursuing and implementing optimization processes while also working on boosting business value. 

They serve as the driving force behind both employee engagement and the company's operational success. And that combination can create a unique set of HR challenges.

Most Common HR Challenges

1. Tracking Time & Attendance

Tracking time and attendance can be a significant challenge for HR departments. This is especially true for medium to large companies and businesses with remote or flexible work arrangements.  

The crux of the problem lies in the general inefficiencies of outdated systems for tracking time and attendance. These inefficiencies can lead to a lot of issues, such as: 

  • Employees forgetting to clock in or out;
  • Companies not staying compliant with labor laws;
  • Managing employees who work in a hybrid or remote capacity without turning to micromanagement;
  • Inaccurate payrolls;
  • Employees reporting inaccurate time records (either on purpose or by accident). 

HR professionals will potentially face these and many other challenges as a result of using obsolete systems for tracking time and attendance. What’s the fix? Let’s take a look:

How to Fix Time and Attendance Issues

In order to fix time and attendance problems, you need to take a more systemic approach. That can involve: 

  • Revisions to various company policies;
  • Implementation of new technologies, such as time and attendance software;
  • Additional employee training and education;
  • Proactive management steps;
  • Creation or implementation of new communication systems;
  • Promotion of a more positive work culture. 

For example, if you choose to use software to manage time and attendance, you can ensure the data you gather from it is 100% accurate. 

This further means that your payroll will always be error-free, that employees’ time records are correct, and that you are in compliance with various labor laws and regulations (e.g., European Court of Justice ruling about mandatory tracking of employee work hours).

2. Quiet Quitting

One of the biggest HR challenges, exacerbated by a widespread switch to remote or hybrid work, is quiet quitting. And according to a recent article from Forbes, around 50% of US workers are doing it. 

This phenomenon is exemplified in employees performing only the bare minimum of their work obligations so as not to get fired. 

They have no passion for their jobs, they are completely dissatisfied with their employer or company, and are only staying in their roles because of the changes or instability in the job market (e.g., lack of opportunities for their specific role). 

Now, quiet quitting is definitely a challenge for HR departments because it is not that easy to identify. This is especially true for medium and large businesses as they employ large numbers of people, making quiet quitters much more difficult to spot. 

But, it becomes an even bigger challenge for hybrid or fully-remote companies. Why?  

Well, apart from looking at the employee's work history and results to identify if they are indeed quiet quitting, HR professionals also have to talk and interact with those employees. And anyone would agree that there’s much less interaction between colleagues in both hybrid and remote work (when compared to regular office work).

How to Deal With Quiet Quitting

Whether the company is remote or operates in a regular office setting, the answer will be the same — listen to employees and hear their frustrations. Also, you could try to: 

  • Foster open communication — promote a company culture where employees or team members feel comfortable discussing their concerns.
  • Conduct exit interviews — They might be pro forma, but, if done properly, can allow HR professionals to gather valuable feedback and insights about the areas that may require improvement.
  • Keep an eye out for signs of dissatisfaction — These can be anything from decreased productivity to increased absenteeism or other changes in an employee's behavior.
  • Promptly address issues – In the case of an issue or a conflict, try and address it as soon as possible (and as fairly as possible). Letting unresolved problems fester, so to speak, can lead to quiet quitting.

3. Attracting High-Quality Talent

Attracting top-tier talent is one of those HR challenges that every company has to deal with, especially in the increasingly competitive nature of the modern market. 

Changes in demographics and increased demand for top talent, coupled with an overall scarcity of satisfactory candidates, puts every HR professional into an unending search for the best of the best. 

With the demand for highly-skilled employees on the rise, HR teams are scrambling to attract talent with appropriate work experience, which creates one of the biggest issues of workforce management.

How to Attract Quality Talent

To be competitive in the market, you have to go above and beyond and offer candidates and current employees a more significant job experience that, apart from salary, offers both meaning and a sense of purpose. You could also try to: 

  • Offer competitive salaries;
  • Have better employee benefits than your competition;
  • Define your brand vision and use it to attract candidates whose values align with your company's vision (diversity and inclusion, equal opportunity employer, etc.)
  • Promote a sense of belonging by offering rewards and recognition for good work, encouraging open communication, and creating career advancement opportunities.

4. Employee Engagement

Keeping employee engagement levels high is another one of the most common HR challenges that many professionals working in the field are experiencing. Having employees fully engaged is not only vital for their individual productivity but also because it can affect the company’s operational success.  

When employees are engaged with their work and find it rewarding, they will be more productive and will be less likely to leave their positions, leading to an overall decrease in turnover.  

However, when employees are disengaged from their work, are not happy in their current roles, and feel detached from the company's vision, they can create major problems within their teams and beyond. 

Not only will they become underperformers, but there's a high likelihood of them actually disturbing your high performers, which can lead to a myriad of issues with team cohesion and performance. 

And, what’s the best way to handle this HR challenge? Let’s review.

How to Improve Employee Engagement

Employee engagement is created on a foundation of mutual trust, honest communication, and commitment. Employees need to know that their opinions are heard and valued. They should be treated as integral to a company's mission, and a big reason for its success. 

When all of that is true, the chances of them becoming fully engaged will increase exponentially. To achieve that, you could: 

  • Ensure that managers are well-trained and possess effective leadership and communication skills;
  • Promote a culture of mutual respect, trust, and, above all, fairness in the workplace.
  • Provide training and mentorship programs, and work on creating a career development plan for the company’s personnel that strives to align employee goals with those of the company.
  • Recognize and reward employees for their contributions to your company.

5. Employee Well-Being

Keeping an eye on employee well-being and following the safety standards set by regulators and company protocols are both prominent HR challenges.  

The consequences of not adhering to the latter are more obvious and can put your company at risk of being sued. This can lead to costly lawsuits that include paying for settlements, lawyers, court costs, etc. 

But, the cost of not addressing the former (i.e. employee well-being|), can also be great. Whether it’s burnout, decreased job satisfaction or performance, or increased stress, all of them can lead to lowered operational success for the company, which can directly affect the bottom line.  

So, how to address this issue?

How to Improve Employee Well-Being?

Here are some things that you can try:

  • Leadership should show their commitment to employee well-being by setting an example and making their own well-being a priority;
  • Establish well-being and wellness programs aimed at addressing both physical and mental health (stress management workshops, fitness passes, yoga courses, etc.);
  • Offer flexible work arrangements, such as remote or hybrid work;
  • Monitor workloads and ensure they are distributed equally, to prevent stress and burnout.

6. Measuring HR Effectiveness

This is one challenge that causes HR professionals the most stress, as their employment can depend on it. And it’s all for a good reason, as a lot of companies are not exactly sure how to measure the HR department's productivity and their use of company resources. 

So, it will be up to HR workers to, once again, step in and deal with the problem. The only question is how?

How to Measure HR Efficacy?

To measure the efficacy of HR departments, you should first set clear metrics that will depend on what exactly you want to measure. For example, if you’re interested in analyzing the recruitment process, you should track metrics like the quality and cost of hire.  

Here are some additional employee metrics to consider: 

  • Engagement rate;
  • Turnover;
  • Absenteeism;
  • Expenses for training;
  • Retention rate;
  • ●Revenue per employee.

7. Compensation and Benefits

Compensation and employee benefits are crucial for both attracting and keeping talent. They play a huge role in maintaining employee motivation, satisfaction, and engagement levels. 

Now, the HR challenge here becomes managing budgets (i.e., payrolls), especially if they are not sufficient to cover everything that employees feel they are entitled to.

How to Deal With Compensation and Benefits?

Adequate compensation doesn't always have to be about increasing salary. HR personnel should find other ways to motivate employees, such as: 

  • Offering recognition instead of monetary rewards (e.g., better-sounding job titles);
  • Offering training and career development opportunities (sending employees to work seminars, creating training and mentorship programs);
  • Setting up a wellness program (gym memberships, yoga classes, free spa days for high performers);
  • Offering flexible work hours, remote or hybrid options;
  • Organizing fun team building activities;
  • Allowing employees to participate in certain parts of the decision-making processes. 

As long as there are people, there will always be challenges for HR departments. And the way HR professionals deal with those problems can potentially determine the entire future of a company. 

So, remember to approach each of those challenges systematically and with an open mind, and you’ll be on your way to ensuring your company is prosperous for many years to come.

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