Top 5 Challenges HR Departments Face

HR departments are under a lot of pressure. The workplace is changing – it’s becoming more global, diverse and flexible. Long gone are the days of a homogenous workplace with only a single type of contract and worker. Nowadays HR departments will have to deal with all sorts of responsibilities and holding on to top talent can be tough.

The change has not stopped or stalled either. Businesses continue to evolve with technology adding its flavour to the mix – the best practices and processes are developing constantly. As a result, the use of things like small business HR software is increasing and HR departments have to adapt to new technologies if they want to survive.

An effective HR department is a must-have for the modern business. So, what are the main challenges HR departments face and how to effectively deal with the issues? Here is a look at five of the top challenges and tips on overcoming the issues.

1. Balancing new responsibilities with traditional duties

While the workplace is changing, it doesn’t mean the old duties of a HR department have disappeared. The problem is specifically the fact that HR departments have to deal with the traditional, such as:

  • Recruitment
  • Workplace safety
  • Labour law compliance
  • Training and employee engagement

But there are added responsibilities to keep in mind now as well. These include things such as:

  • Benefit strategies
  • Health insurance compliance
  • Employee budgets

Managing both sets of these responsibilities can be time-consuming and difficult. The solution in most instances is either to engage with a third-party provider or to implement a better software strategy to automate certain tasks. For example, using a benefit partner can help reduce the time and money spent on managing employee benefits – outsourcing can help.

2. Implementing proper leadership and training programs

According to a study, businesses are failing in implementing appropriate leadership development programs. This is a problem because leadership training is essential for keeping employees productive and happy. Problems in management will lead to disgruntled employees and a drop in productivity. For HR departments, the pressure is on to implement proper training while also ensuring the department itself has proper training procedures to ensure high-level work.

The most cost-effective solution to leadership and training is focusing on recruitment. The hiring process should always emphasise leadership and focus on finding employees with a good understanding of the importance of leadership. Businesses need to hire people who add to current leadership structures without a huge training program.

3. Retaining the top talent

HR departments will have to solve the problem of retaining employees. The competition for top talent is fierce and small companies are especially vulnerable to losing the fight. This is because big companies often have more options for improving benefit programs and offering higher salaries. Small businesses might not have the structures and resources to compete with retirement plans and insurance options.

Small business HR departments must be smart with their resources. Interestingly, research shows it’s not all about money for employees. A proper onboarding plan will help keep employees happy and it could lead to around 58% of employees staying with the company. Small business HR software can help establish a proper onboarding strategy.

4. Improving transparency and decision-making

HR departments are also under pressure in improving transparency. Decisions cannot be made without the employee having proper access to information. At the same time, HR departments are collecting an increasing amount of data from health records to performance records. This data can be beneficial but it can also lead to biased decision-making – in fact, there is a huge problem of non-diversity at many workplaces due to unconscious and conscious bias.

The solution is to ensure employees have full access to their own information. Small business HR software has plenty of solutions for this and many of these software solutions actually allow employees to manage and edit their own information. In terms of reducing bias, HR departments should also consider using software that hides certain information, such as identify, when it comes to some data points.

5. Keeping informed about latest market changes

Finally, HR departments must face the challenge of constantly changing markets. The industry is changing not only thanks to technology but also due to society changing. Local, national and international governments are constantly improving and tweaking laws and regulations to ensure they match the world around them. This constant change and tweaking can be challenging for many small HR departments.

It’s definitely beneficial to keep in touch with changing legislation to ensure full compliance. Hiring a broker to inform the business about changes can be a good idea. Businesses also want to keep HR tools and their small business HR software updated. By using tools that automatically ensure compliance with things like local payroll regulations, the HR department reduces pressure on its part to do continuous research.

The HR department is under a lot of pressure whether the business is small or large. However, there are clever ways to solve these problems and to ensure the department is able to boost business operations.