Top 15 HR Challenges in 2023 (+Solutions)
- October 18, 2022
Organizations, in the past, were focused on more significant challenges like revenue, competition, and economic instability, with an evident lack of attention on human resources. However, with changing business models and industries, HR has become the prime focus as organizations realize the importance of handling the workforce to influence growth and success.
With this, the responsibilities of human resources teams, such as attracting top talent, building a positive work culture, creating the right job roles and opportunities, ensuring continuous training and development, fostering strong performance management, and offering attractive compensation, have also grown considerably.
With great responsibilities come great challenges that can impact effective human resource management. This article outlines the top 15 HR challenges commonly faced by organizations and their possible solutions.
What Are HR Challenges?
Every organization, regardless of industry or size, is likely to encounter challenges when managing its workforce. As businesses focus more on improving employee experience and culture, the volume and nature of the challenges faced by human resources professionals continue to increase.
Many HR challenges can emerge with digital disruptions, workplace cultural shifts, economic changes, political climate changes, etc. For instance, the year 2020 put forward an enormous challenge for the HR departments to create, tackle, and manage efficient remote workforces for businesses to keep running successfully amidst the pandemic.
Top 15 HR Challenges And How To Overcome Them
Here are fifteen of the most pressing challenges impacting HR teams, and contextual solutions to overcome each of them.
1. Attracting top talent
Talent acquisition is a top priority for HR given the competitive nature of the current market. Demographic changes, growing demand for talent, and a shortage of suitable candidates require companies to constantly search for and hire top talent. However, with the ever-increasing demand for skilled workers, HR teams struggle to attract candidates with compatible skills or experience, which poses one of the most significant challenges of workforce management.
Solution – Competitive compensation and employee benefits packages are essential for attracting talent to your organization. To compete, you need to dig deeper and offer your employees meaningful experiences and a greater sense of purpose. Your employer brand, based on your most valued and unique elements, can help convey that purpose and attract people who are motivated by it.
To define your employer brand, identify the mission, vision, and values you want your company culture to be based on. Focus on building your diversity, equity, and inclusion efforts to foster a greater sense of belonging for all employees.
2. Change management
Change is never easy, but it’s the nature of the business space. Implementing change and developing long-term plans that account for that change is one of the most significant human resource challenges. Organizational change can be structural, economical, geographical, procedural, managerial, or technological.
No matter the type of change, HR teams face major issues in terms of reduced employee morale and satisfaction, self-doubt, and attrition while managing it. The inability to adapt to change could be due to employee resistance to change, lack of necessary skill and training to adapt to change, sudden but drastic requirements to change, etc.
Solution – A good starting point for effective change management is to communicate frequently and transparently before, during, and after periods of change. Provide significant warning and notice of upcoming changes and equip employees with the necessary skills and strategies to respond to and overcome them. Include employees in decision-making and communicate the rationale behind changes.
Consider various scenarios that could affect your business model and work processes, and develop alternative plans for addressing these scenarios as they arise to minimize the impact.
Furthermore, adaptability skills enable your business to adjust to changes in the industry, as well as changes within the business itself. They allow you to respond faster to new ideas, responsibilities, expectations, and strategies. As a result, they can be critical to implementing a change management strategy.
Key skills that promote adaptability in the workplace include:
- Communication
- Relationship building
- Problem-solving
- Creative and strategic thinking
- Teamwork
- Organization and productivity
3. Reskilling and upskilling
Keeping up with the pace of digital transformation is a significant challenge faced by HR because integrating the latest technologies not only brings powerful business opportunities but also creates challenges and skill gaps for the current workforce.
Solution – For an organization to stay competitive, it must have a workforce with the right skills to be productive, innovative, and ultimately drive more revenue. Creating a learning and development initiative around employee upskilling and reskilling is a way to ensure your workforce has the skills needed to thrive and help your organization grow.
Reskilling is a process where employees learn new skills to move into a different job role within an organization or to meet the new demands of a current role. On the other hand, upskilling is the process of learning new skills and acquiring relevant competencies needed for today’s work environment and the near future.
Reskilling your employees is a complex task that demands strategic L&D planning. Here are a few steps to set your reskilling programs up for success.
- Create your reskilling plan by mapping out your current needs, skill gaps, where your business is headed, and what it takes to get there.
- Conduct a skill gap analysis to get a list of skills employees already have, need to improve, and need to develop.
- Set clear and tangible goals that will structure your reskilling efforts and gauge the results.
- Choose an appropriate training method for your reskilling training program.
Pro tip – Consider having several employee training methods to encourage flexibility and offer options that work best for the different learning styles and skill gaps you’re hoping to address.
- Leverage employee training software such as corporate LMS, digital adoption platform, or a knowledge management system to deliver effective reskilling programs.
- Measure the impact of your training efforts by collecting data from surveys, discussions, and post-training assessments.
Anticipating the right skills for the future, developing effective training programs, and building a culture of continuous learning and development with the right EdTech empowers organizations to upskill their workforce successfully.
Here are a few steps to help you plan effective upskilling for your workforce:
- Conduct a skills gap analysis to determine whether your workforce’s current skills meet the overall needs of the company.
- Emphasize the importance of upskilling for the future progression of employees’ careers by building specific skills into their annual goals and learning objectives.
- Choose an appropriate training method for your upskilling program, such as – eLearning, on-the-job training, coaching, group activities, video training, cross-training, job shadowing, etc.
- Leverage employee training software to deliver effective upskilling programs.
- Monitor KPIs such as course completion rates, training progression rates, assessment scores, lowering skill gap analysis, improving proficiency or productivity, etc., to determine training effectiveness and knowledge or skill acquisition by the end of your upskilling program.
4. Building digital dexterity
The last decade has seen HR digital transformation scale across organizations as companies upgrade their legacy processes and systems to new cloud technologies. These new software applications help automate manual processes, drive innovation, and enable employee efficiency and productivity. The ability of your workforce to adopt these new software applications or technology designed to make them more efficient is called digital dexterity.
Although digital transformation isn’t the sole responsibility of a specific department– and neither is digital dexterity– the burden of creating application onboarding, reskilling, and upskilling training content and courses for building digital dexterity skills falls on the HR and L&D departments.
Solution – Building digital dexterity is an organization’s insurance policy for achieving ROI with digital technologies. Without the skill sets to utilize software applications properly, technology investments will not only fail to find ROI but also face other severe repercussions such as dirty or inaccurate data, not meeting compliance laws, failing to meet goals, etc.
Here are some best practices to improve digital dexterity in your workplace:
- Create a larger digital adoption strategy that provides a framework for driving adoption across the digital transformation lifecycle – from application research, implementation, and end-user training.
- Identify the technologies your company plans to adopt. Then, assess how these technologies will impact your organization and existing processes and what new skills your employees need to learn to stay relevant.
- Overcommunicate and gather feedback from employees to understand their diverse needs. Then, segment employees into cohorts you can target with personalized digital dexterity development programs suited best for these well-defined groups.
- Take an evolved approach to software onboarding by using a digital adoption platform (DAP) to enable your employees with in-app guidance and on-demand support – all in the flow of work.
- Focus on continuous, learner-centric upskilling and reskilling training.
- Apart from training your employees, empower business leaders and function heads to understand emerging technologies disrupting their industry.
- Foster a culture of change in the workplace.
5. Managing diversity
Globalization is affecting every business in every part of the world. This makes diversity a hot topic in human resources. Diversity comes with its own HR challenges, such as managing diverse cultures in a local team or addressing the requirements and experience of employees of different ages, genders, nationalities, or ethnicities.
Solution – Start by evaluating the state of DEI (diversity, equity, and inclusion) in your workplace, and set clear goals for diversity expansion. Assign key results and clear ownership for each set objective and put resources against each objective so their owners can deliver the results you need.
HR teams should also communicate the importance and benefits of diversity initiatives to employees to boost diversity and inclusion. Team building activities are also effective for integrating employees of different cultures and uniting them toward common business objectives.
6. Employee engagement
Employee engagement is an ongoing concern for HR professionals, as keeping employees engaged is critical to a business’s success. When employees find their jobs challenging, engaging, and rewarding, they’re more likely to stick around and invest themselves in their work.
On the other hand, disengaged employees who are dissatisfied with their roles and feel disconnected from their work can cause significant problems in the workplace. Not only do they underperform, but they also create friction for high performers.
Solution – Employee engagement is built through two-way communication and commitment. When employees feel like their voice is heard, their opinions are valued, and they’re an essential piece of the company’s growth, they’re more likely to be engaged. Here are some actionable steps you can take to improve employee engagement:
- Create an engaging onboarding experience
- Show recognition and appreciation
- Have effective, open communication
- Prioritize work-life balance
- Create a continuous feedback loop for your employees
- Invest in employee development
- Avoid micromanagement
7. Employee retention
An employee leaving to join another organization they feel is a better fit is not a pleasant scenario for any employer. And the situation is made worse when employees with mission-critical skills decide to leave. Apart from costing an employer almost double an employee’s salary to replace them, an employee’s departure brings other challenges, including time and money spent on training new hires, low work productivity, and negative employee morale.
To combat this, HR teams must try to retain the current workforce — or risk losing them to a highly competitive talent market.
Solution – The first step to improving employee retention is finding out why employees are leaving in the first place. Exit interviews can provide insights into the reasons for employees leaving, and using this knowledge can help HR professionals develop plans to address the factors driving employee turnover.
Some other strategies to boost employee retention include:
- Offering flexible work schedules for employees to maintain a healthy work-life balance
- Offering wellness programs
- Providing a clearly laid-out employee development plan for advancement
- Providing positive feedback frequently to keep employees motivated
- Having an open and healthy line of communication where employees do not hesitate to come to you with any ideas or concerns
- Investing in smart onboarding processes
8. Leadership development
Organizations often overlook the need for training and grooming of the leadership. It’s a common misconception that leaders have reached a stage where they don’t require ongoing training. And even if they do, it can be achieved through self-learning.
However, the lack of leadership development results in employer-employee conflicts, disagreements in the workplace, an unhealthy work environment, and employees leaving due to poor relationships with their managers. This affects employee morale, satisfaction, and the organization’s goals; hence is a significant HR challenge.
Solution – Training and development for leaders should be given as much importance as it holds for other employees. While technical aspects can be self-learned by the leaders, it’s crucial to conduct leadership development training to encourage managers and leaders to:
- Find new, innovative ways of developing and managing people
- Develop new business opportunities
- Tackle the broader societal issues they face
- Decrease employee turnover and increase engagement
Successful companies also have a succession plan in place when key leaders need to be replaced. Creating a succession plan helps organizations identify and document critical skills and knowledge to pass on to prepare their next-generation leaders for a seamless succession within the company.
9. Employee health and well-being
Employee health and safety standards are probably one of the more apparent human resource challenges. These concerts are not only governed by labor law, but they’re also crucial to general employee well-being.
The psychological well-being of your employees can deteriorate due to high demands, limited time, frustration, and burnout.
Solution – Making efforts to boost the mental health of employees should be a priority for all employers. Here are a few ways you can help protect and manage your employees’ health and well-being:
An open-door policy to discuss anxiety, working hours and unfair expectations.
Training managers in Emotional Intelligence (EQ) can help them recognize the benefits of a healthy mental state.
Training in mindfulness and general stress coping techniques can help build a resilient workforce.
Encourage employees to take small breaks away from the computer throughout the day.
Make use of the communication tools like Slack, Google Hangouts, Skype to give employees a space for discussions, be socially active, share latest news, and talk about their interests.
Provide access to mental health programs.
10. Employee onboarding
Finding the right candidate to fill a vacant position in an organization can be a lengthy and tiresome process. After devoting countless hours to recruiting the right talent, all that hard work goes down the drain if a new hire ends up quitting in the next few months – taking HR back to square one. To combat this, HR teams must build an engaged workforce committed to staying with the company for the long haul.
Solution – As they say, the first impression is the last; the employee onboarding process plays a major role in building a new hire’s commitment to the organization. A strong onboarding process increases employee engagement, invokes a sense of loyalty in new hires, promotes proper training and adoption of business processes, and helps improve long-term employee retention rates.
Create a welcoming environment that helps new hires familiarize themselves with the team, company culture, and overall organizational goals and processes, and empowers them with the proper knowledge and processes to be productive quickly. Creating an onboarding process requires HR teams and people managers to think through the experience as a new employee would and consider what new hires will face at different points in their new role – ultimately making their transition into their new role as easy as possible
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11. New-hire training
As soon as your company finds new talent to fill much-needed roles, it’s necessary to implement successful new-hire training programs for every employee recruited. If the initial training is a disjointed or nonexistent effort, new employees will struggle to understand and perform their duties successfully – and you may even find yourself losing employees faster than you can hire them.
Solution – Carefully craft a new-hire training program for your recruits to help them grow their knowledge base and improve their skills to become more effective quickly.
Here are a few quick tips for training new hires effectively:
- Establish what you want them to learn and how you will provide that learning (online, daily meetings, manuals, etc.).
- Consult your current employees about their training experience to improve the experience for the new hires.
- Set SMART goals to help employees understand what is expected of them.
- Provide regular feedback to ensure your new employees are performing their tasks appropriately and are on track to meeting their established goals.
- Implement employee training software such as a digital adoption platform that integrates with digital tools to provide automated, personalized training in the flow of work.
- Have a reliable location where employees can find the training videos, training manuals, and answers to their questions all in one place.
12. Remote workforce management
The outbreak of COVID-19 brought many changes in the world, but the most apparent impact of the pandemic is the accelerated adoption of remote work culture.
Embracing the remote work culture has become a norm for employers. Providing their workers flexible work arrangements gives companies the edge to attract top talent. However, some HR teams still struggle to maintain a productive remote workforce in their organization.
Solution – The key to effective remote workforce management is practicing open communication, keeping employees engaged, monitoring your teams’ productivity, and avoiding loss of efficiency. All these factors can be achieved with the right tools and knowledge, and a bit of ingenuity and remote workforce management will be a breeze.
Here are some of the ways to enable remote workforce management.
- Productivity tools, line of business applications, communication and collaboration tools, company laptops, and mobile devices must be made available to your remote workforce.
- Consider opting for a digital adoption platform that promotes learning in the flow of work. It is the most productive way of managing remote workforce training on enterprise applications.
- Encourage one-on-one (manager-reportee) check-ins daily and weekly team meetings via video calls to keep the remote workforce connected to their team.
- Develop a remote work policy to help employees understand what is expected of them as they work remotely.
- Encourage virtual employee engagement by setting up ways for team members to communicate socially.
13. Employee experience
Employee experience is the aggregation of all interactions and observations an employee has throughout their journey. This includes experiences within their job role, work environment, and management. Studies show that companies that invest in optimizing employee experience see:
- Higher profits overall and higher revenue from new products
- Better customer satisfaction, higher NPS, and easier upsells
- Higher employee satisfaction combined with more productive and bought-in team members
- Better new hire recruiting and employee retention.
While connecting employee experience with overall business success may seem straightforward, ensuring that personnel has consistently favorable experiences throughout their employee life cycle is no simple task. It requires ongoing monitoring and management for the HR teams to excel in these efforts.
Solution – Here are the five most significant contributing factors to a positive employee experience:
- Make employees feel empowered to make decisions independently, not be micromanaged, and contribute to impactful projects.
- Set clear and transparent goals, provide coaching over traditional training, invest in people managers to develop better management skills, and utilize agile performance management methods.
- Provide flexible working hours for employees to maintain a healthy work-life balance.
- Invest in high-impact employee development programs to show employees you believe in them and want them at your company for the long haul.
- Invest in employee experience management software to promote employee engagement, productivity, and efficiency.
14. Measuring HR effectiveness
Business leaders realize the importance of HR departments in creating a thriving organization. However, they are often unsure of how to measure its effectiveness. It’s crucial to understand if the HR function delivers everything in the most effective way possible and uses the resources (time and money) productively.
Solution – To measure the effectiveness of your HR function, establish relevant metrics depending on what you want to understand. For instance, track metrics like quality of hire and cost of hire to uncover the effectiveness of your recruitment process.
Here are some of the metrics to use to measure HR effectiveness:
- Employee net promoter score (eNPS)
- Employee engagement rate
- Employee turnover rate
- Employee retention rate
- Employee absenteeism rate
- Revenue per employee
- Training expenses per employee
15. Compensation and benefits
Competitive compensation and employee benefits packages are essential in attracting talent to your organization. It’s a big part of keeping employees happy, motivated, and satisfied with their job. HR teams must be cautious when designing employee compensation and benefits packages.
Solution – Compensation doesn’t always have to be about salary. HR professionals can find other ways to motivate workers rather than a continual rise in the payroll. You can design employee rewards and recognition programs, accommodate requests for flexibility and remote work, offer training and development opportunities, extend vacation time, provide well-being programs and transport benefits, and more to compensate for your employee’s hard work. These methods will motivate your employees and improve employee engagement at the same time.
A digital adoption platform (DAP) is your best bet to overcome major HR challenges, elevate employee experience, increase HR software adoption, improve employee productivity, and unlock the full potential of your workforce.
A DAP like Whatfix enables you to:
- Drive user adoption on any enterprise software or application to get the maximum ROI.
- Provide a personalized onboarding and training experience with customized pop-ups, smart tips, and interactive walkthroughs.
- Deliver an elevated employee experience by reducing support tickets and eliminating employee frustration across enterprise applications.
- Empower employees to find answers to their own questions with a self-help knowledge base.
- Make business transformation easy with in-app pop-ups that highlight and explain new processes and application changes.
Schedule a free demo with us to learn more about how Whatfix DAP supports HR teams!
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