Human Resources Challenges Faced by HR Departments

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Modern HR departments are responsible for a variety of different things. Small business owners don’t really concern themselves with HR metrics, instead choosing to focus on cash flow and revenue growth.

However, as your business continues to grow, you will realize that the human capital working in your company, the employees, play a critical role in the success of your company. Without a productive workforce, it is going to be next to impossible for you to make your company profitable.

Human resource management is a broad term that focuses on not just the training and development of your employees, but also job design and analysis, compensation and benefits, and a lot more, such as legal issues. However, modern human resource departments face a great deal of challenges. Here are the biggest ones.

Compliance with Regulation and Local Laws

One of the biggest challenges that HR managers face is compliance with employment laws that affect the business. The United States Department of Labor has published a whole Law Guide, and HR managers must make sure that their company abides by these laws.

If your company does not abide by these laws, it could open up the way to future audits, lawsuits, and litigation that could eventually spell the end of your business. The size of your company doesn’t matter; you have to make sure that your business abides by the regulations in place.

This involves regulations associated with fair hiring practices, making sure that you provide decent wages and ensuring safety in the workplace. If an employee files an anonymous report, it could cause serious problems for your business.

Changes in Management

As your company continues to grow, a lot will change with it. The structure, the strategies, and more importantly, the internal processes within the company are going to change accordingly. Many employees face a lot of problems when it comes to coping with such changes.

As a result of such changes, companies usually go through increased periods of low productivity and morale takes a hit as well. That is one of the reasons why business owners and HR managers need to communicate and highlight the reasons for the change, and what they believe, the benefits are going to be.

Holding regular staff meetings and discussing the pain points and opinions of all employees is a fantastic way to make sure that everything is out on an open platform. You can then discuss each and everything with your employees and make sure that they are on board. It’s a pretty big human resources challenge.

Developing Leaders

According to a study that was recently conducted, almost one-third of the companies were doing a fair job at implementing leadership programs. This means that 75% of the companies were doing a below-average job of producing leaders.

Leadership development is an important component that is going to contribute to the growth of your business. It can help keep your management team motivated and keep it engaged in different things, and more importantly, the average employee will feel that they are ready to move up the ladder.

With time, you will notice management rising up to the occasion and taking on more challenges. Leadership development should be a part of modern business culture, and it’s important that your company pays attention to these things.

Training and Developing the Workforce

One of the biggest challenges facing HR departments is the training and development of the lower-level workforce. These are the employees that get things done, and it’s important that you invest heavily in their training and development so that they are able to rise up to the top.

Many businesses find it difficult to drum up the resources to train their employees. The front line employees are some of the hardest workers in the company, and you need to make sure that they are able to find time to take a training course.

It’s important that the HR managers come up with new and different ways to train the workers and continue their ongoing development, so that one day, they are able to rise to the occasion and eventually sit in upper management.

Innovation Demands

Technology is changing rapidly across the globe, and it is the job of the HR managers to look at different ways on how work is being done and then allow the workforce to adapt quickly. Companies that are slow to change are often left behind in the dust and find it difficult to compete in a rapidly changing environment.

The challenge for HR managers is to work with employees, both old and young, and help them embrace new technology. Without communication, this will not be possible. For instance, if your business is migrating to the cloud, your HR team should set up a portal where employees can send their questions as they adapt to a new technology and become comfortable with it.

Salary Negotiations

Compensation is always a confusing point among workers. A number of companies often struggle to structure compensation in a way that best meets the needs of their employees, and suits the company as well.

Many small businesses have to compete with other businesses in the same industry, as well as corporations with their bottomless pockets. When you factor in the benefits that you will be giving to a prospective employee, you will realize that the cost of benefits themselves can rise to up to three times the salary of the employee.

While salary is an important attractant, you should know that it’s not the only one. Creating a dedicated system that rewards your employees based on their performance is more important. It is critical that you create several incentive programs that are tied to the performance of different employees.


Another important challenge faced by modern HR managers is weeding out strong candidates and recruiting talented employees who are going to help in the growth of the business. Attracting talent is obviously not easy; it requires a considerable amount of money and time as well.

Many businesses find it difficult to create a viable balance between keeping their business afloat and hiring candidates who are well suited for jobs as well. Obviously, it’s not as easy as it looks, and for HR managers, this can mean a lot of work. They are responsible for hiring candidates who are well-suited for different jobs.

Retaining Top Talent

Their work doesn’t stop at recruitment. The HR managers are also responsible for conflict resolution and making sure that they come up with different ways to make sure that they are able to retain top employees. Remember, the competition for top talent is incredibly high, and if you are not able to value the services of a talented employee, they won’t stay for long.

That’s why HR managers have to pay attention to the company’s attrition rate and come up with different strategies to reduce the employee turnover rate as much as possible. These are just a few challenges that they face.


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