Interestingly, many employees seem to hold the opinion that the HR team does not do much more than hiring and firing staff. That opinion couldn’t be further from the truth.
There’s a lot of depth and breadth to the functions of the HR unit, ranging from activities like compensation and benefits, employee engagement, overseeing performance management, and so many more.
As with every job role and life endeavour, HR professionals face certain recurring challenges across their many functions. Below, we discuss those challenges and suggest possible solutions.
Top five HR challenges and solutions
1. Hiring and talent retention
According to this 2007 research, the average employee replacement costs are $13,996 per employee. Aside from financial costs, employee turnover costs the company in other ways, such as productivity loss and lowered team morale.
When it comes to recruitment, the major concerns for HR are hiring the right people and talent retention. Other related challenges involve reducing time-to–hire, and time-to-fill metrics, ensuring that job applicants are well engaged, etc.
The issue of hiring top talent and retaining them has become increasingly important, especially for companies with moderate to low resources who cannot match remuneration offers from larger companies.
Since it is more cost-efficient to retain quality talent than spend the time and resources that it will take to recruit, onboard, and train a new employee for the same role, what can HR do to improve retention rates and hire quality?
If attrition rates at your organisation are rising, it’s a good idea for HR to dig in and find out why. This will support a tenable solution. Do new hires leave or get fired because they lack the right skills? Revise your recruitment process to include the senior members of the department you’re hiring for.
Do you come to realise that new hires are not a culture fit for your organisation after they are hired? Then you must find creative ways to test applicants for your organisation’s culture and values as well.
To support long-term employee retention, HR should do their best to cultivate an enjoyable work environment for employees, open up career growth opportunities for staff, and also offer competitive compensation and benefits packages as much as they are able.
While we realise that initiatives like these are more of a marathon than a sprint, effecting them will support your organisation’s employer brand and reputation as a choice establishment to work with; which in turn acts as a solution to all of your recruitment-related challenges.
Read: 10 must-have human resources policies
2. Change management
Change is an undeniable constant in the ever-changing business landscape.
Change could come in different ways. it could be introducing a new managerial approach, new technology, or a geographical, or even economical change to the workplace.
HR professionals experience resistance on the part of employees when it comes to introducing new business policies or new ways of doing things within the organisation.
For example, if a business decides to enforce digital transformation into all of its processes, convincing staff to adopt the new change could become a major challenge for the HR unit.
HR can manage change by efficiently communicating the benefits of the new system over the old, how it can add value to them, etc. This should be done well before, during, and after the transition process.
- Communicate the changes to employees early and prepare them well ahead of time.
- Explain the benefits of the new system/process over the old.
- Where necessary, train affected staff on the new system so they can have a smoother adjustment process.
- Get feedback from your employees on how the transition process was handled and on how they are adjusting to the newly adopted system. This helps the HR team get some valuable insight that will be useful in the future.
3. Compensation and benefits
As we mentioned earlier, larger companies have the resources to offer competitive salaries, benefits, and all sorts of perks to employees.
This makes it increasingly hard for smaller companies to keep up, as they lack the resources to offer similar compensation packages to their employees, leading to a loss of their best talent to companies that can offer more.
Another huge concern for HR when it comes to compensation and benefits is the struggle of having to manually calculate payroll. This pain is applicable to companies in which the payroll is managed by the HR team.
Manual payroll management comes with all sorts of frustrations like having to calculate things like time-off, payroll-related disciplinary measures, etc.
There’s also the difficulty in managing compliance, possible security risk, the possibility of overpaying or underpaying staff, among others.
While smaller organisations might not be able to offer competitively high salaries, they can offer other perks like offering a flexible work system and cultivate a more conducive environment.
With a payroll management system like SeamlessPayroll, your HR unit will be able to manage payroll more effectively, with more time to spare on other important HR tasks.
Moving from manual payroll management to using a software like SeamlessPayroll will help to remove frequent payroll-related errors, ensure that payroll data is secure and available only to those with the right permissions, ensure compliance with regulations, automatically disburse salaries and pay remittances.
Read: 6 strategies to building a strong company culture
4. Performance management
In overseeing performance management across the organisation, HR may encounter recurring challenges such as getting managers to commit to the process, helping employees understand how their KPIs tie into the organisation’s objectives, and ensuring the needed post appraisal actions are carried out.
All of these may stall or halt the performance management process.
The HR unit can surmount these problems and manage performance more effectively by using a performance management software.
This helps HR automate the process, set goals, desired outcomes, and automatically send out notifications for the parties involved in the appraisal process.
5. Data security
The HR department holds Personally Identifiable Information of employees and other sensitive organisational data that should be held as securely as possible.
HR can experience different challenges in managing data security, such as ensuring data is securely handled, that data protection regulations are complied with, and that the data is easily accessible, among others.
The HR unit can manage data security concerns by frequently educating staff about data security, using a cloud-based HRMS to manage HR data, and by collaborating with the IT or Information Security team to ensure staff understand and practise the company’s data security policies.
Additionally, using a cloud-based human resource management system like SeamlessHRMS will help to protect HR-related information, as only recognised admins would be able to access company and HR information.
SeamlessHR is NDPR and GDPR compliant, with an ISO 27001 certification that supports our information management system.
SeamlessHRMS is an all-in-one HR software with modules that helps to automate recurring HR tasks, and remove the challenges involved in managing those HR functions, from ‘hire to retire’.