The world of work has changed dramatically in recent years. Between the rise of remote work, the gig economy, and an increasingly competitive workforce, today’s human resources teams face a host of challenges. From attracting top-tier talent to creating a positive work culture, HR teams have always had to juggle a lot. You’re up to the task, but it’s always smart to look for advice.
Here, we break down 16 HR challenges and solutions that HR professionals must navigate today, and how you can use them to help support your organization more effectively.
1. Navigating a competitive job market
The job market in 2024 is remarkably competitive. According to Workday’s September 2024 Global Workforce Report, job requisitions grew by 7% while applications shot up by 31%. Demand is vastly outstripping supply. While this can be a positive for HR teams that want a range of applicants to choose from for any open position, you have to remember that applicants aren’t just looking at your company. There were 7.4 million job openings at the end of September 2024. In an incredibly competitive market, it can be difficult to make your company stand out over competitors in your own industry, let alone global competitors in more general fields.
Solution
Time management is a constant HR challenge, so it’s important to use technology as much as possible to make the hiring process more efficient. For instance, an applicant tracking system (ATS) can help you streamline hiring for any position. These systems allow you to input keywords and skills you’d like to see on a resume to automatically sift out resumes that don’t include those keywords.
2. Attracting and retaining top talent
Employee retention is often one of HR professionals’ most important goals. According to Gallup research, 51% of employees were on the lookout for or actively seeking a new job in 2024. It’s a poorly held secret in corporate America that employees typically have to change companies to earn a substantial raise. Internal promotions exist, of course, but research by the Harvard Business Review has shown that new hires frequently get paid more than top performers. This often leads to those top performers finding another job. When top talent leaves, it costs a company money in lost labor, the ramp-up for a new employee, and the difference in productivity between the previous employee and a new one. It’s a big deal.
Solution
Current HR trends and challenges suggest that retaining top talent is becoming less difficult. A LendingTree survey found that just 20% of employees currently think they need to leave to get a raise. One of the big reasons why? Because the same research found that 82% of full-time workers who asked for a raise actually got one. HR teams often don’t have a say in the salary budget for new roles or raises but should encourage decision-makers to make sure that salaries are competitive. Of course, it’s always smart to offer employee benefits that beat competitors, too.
3. Onboarding and training new hires
Onboarding is an important part of the employee experience, but Gallup has found that just 12% of new employees thought their company did a good job onboarding them. Poor onboarding procedures lead to lost productivity and can reduce employee engagement right out of the gate. Who wants to go into an office every day when they have no idea what they’re supposed to be doing?
Solution
Start with a new-hire onboarding checklist. Break down the process into steps to make sure new employees get to meet leaders on different teams, learn company policies and expectations, and feel immersed in the company culture and mission within their first week.
4. Managing diversity, equity, and inclusion (DEI) initiatives
DEI has been under attack all over the country. After years of DEI initiatives, there has been major whiplash in the opposite direction. That’s counterintuitive, considering that a majority of workers say DEI initiatives have had a positive impact on their workplace. Not only that, but research shows that diverse teams make better decisions than homogenous ones 87% of the time. Diversity doesn’t just improve workplace culture, but it has real economic impacts, too.
Solution
DEI isn’t about prioritizing hiring from minority populations at the expense of others. It’s about creating an inclusive, welcome work environment where everybody feels they’re supported to do their best work. As such, the focus should be on programs to educate employees about equity and inclusive practices, encouraging employees to celebrate their differences, and putting diverse voices on the same team to work toward common goals. Consider bringing in outside educators or hosting parties and events to showcase your company’s diversity.
Let’s talk next more about the work environment and keeping individuals engaged while on the job.
Employee engagement and workplace dynamics
5. Ensuring employee engagement and well-being
Gallup’s Employee Engagement Indicator found that just 33% of American employees are engaged at work. That’s a concern because a highly engaged workforce can lead to a 21% increase in profitability. Keeping up employee morale is crucial to business success.
There are many HR trends and challenges today, but engagement is perhaps the most important. Not only due to that profitability statistic, but because it has a trickle-down effect on your entire organization. Engaged, happy employees are less likely to leave the company and are more likely to become an advocate for your business.
Solution
There are many potential solutions to increasing employee engagement and well-being. You can’t always make work “fun,” but you can prioritize wellness initiatives like a mandatory PTO policy, flexible working hours, and offering perks like ping-pong tables or fully stocked kitchens. Beyond policy initiatives, encourage managers to check in with each of their employees regularly and keep lines of communication open.
6. Managing remote, hybrid, and in-office employees
While more businesses are returning to the office, it’s creating complications for HR teams. While some employees prefer to work in the office, others may consider looking for a new job if they’re asked to go into the office. While remote work has greatly expanded the talent pool, it can have negative impacts on workplace culture.
Solution
It’s important to strike a balance between work culture and employee well-being. As such, if in-office work isn’t completely necessary for individuals to do their jobs, offer employees a choice between remote, hybrid, and in-office work. It’s also important to clearly communicate to the team about what the policies are around in-office, hybrid, or remote work setups.
7. Balancing compliance with workforce laws and regulations
Compliance is a constant HR challenge. Different states, cities, and industries have different laws and regulations, while federal ones can also change. Nonetheless, HR compliance is essential.
Solution
Staying up-to-date with compliance issues is an HR team’s responsibility. As an HR leader, it’s crucial to be up to speed on the laws that apply to your business, and ensure your company is remaining compliant. If necessary, enroll in professional education courses to learn what you need to do to make your company compliant with new regulations.
8. Managing compensation and benefits
A 2021 Pew Research Study found that 63% of Americans who left their jobs did so at least in part because of low pay. If somebody tells you they love their job so much they’d do it for free, they’re probably lying. Employees need to live, and with prices for nearly everything continuing to rise, it’s imperative that your company’s compensation and benefits plans reflect this.
Solution
Though HR teams don’t always have a direct say in compensation, some do get to weigh in — especially if they know what competitive salaries are. As such, it’s important to advise decision-makers on the salary ranges for specific roles in your location. Moreover, competitive benefits can go beyond healthcare and dental plans. Encourage leaders to add perks like continuing education, an allowance for books or technology, flex time, and other out-of-the-box benefits.
Moving on, let’s find out more about what’s in store for teams looking to help keep employees learning new skills.
Professional development and skill management
9. Reskilling and upskilling employees
A Boston Consulting Group study found that 68% of employees globally and about half of American employees are willing to retrain for a new role. More importantly, TalentLMS found that 80% of employees want companies to invest in upskilling opportunities this year. Employees want to learn new skills, it just isn’t always easy to do so with the demands of professional lives, personal lives, and the cost to do so. Still, 94% of employees said they would stay with their companies longer if given the opportunity to learn new skills, a huge benefit for employee retention.
Solution
There are many ways to learn these days. A basic option is to provide employees with an allowance to pursue online learning opportunities themselves. You could even offer tuition reimbursement programs for employees who want to earn professional certifications, provided they agree to stay with the company for a set period of time after program completion.
10. Identifying skills gaps in the workforce
One of the most costly impacts of employee turnover can be the skills gaps come as a result. When highly skilled employees leave the company, or when the company creates new products or verticals, you may find that you don’t have the necessary talent. It’s an HR team’s responsibility to identify and fill those gaps.
Solution
Periodically assess your company’s organizational chart to see which teams look short on members. If the business plans to make significant changes by launching new products, expanding into new markets, or investing in different kinds of growth, make sure you begin hiring to fill skill gaps before they emerge.
11. Leadership development challenges
As previously noted, employee retention is a constant HR challenge. As such, it can be very difficult to develop leaders internally. Nonetheless, people who have grown through the organization and know the company and its people well are the best suited to become leaders. Between the allure of other companies and limited opportunities for growth, internal leadership development often fails.
Solution
Employees should understand that there’s a clear path for growth within the organization. That goes beyond vaguely telling them they’ll get a raise and more responsibilities the longer they stay. It’s important to develop a transparent, linear org chart that shows employees exactly how they can climb the internal ladder. Moreover, make it clear to top performers through feedback and performance reviews that they’re on track to earn these promotions.
12. Conducting constructive performance reviews
An important element of any employee engagement program is performance management. A 2019 Gartner study found that 95% of HR professionals were dissatisfied with performance reviews. One of the major reasons why is because they simply weren’t frequent enough to be truly constructive.
Solution
Annual performance reviews have largely become a thing of the past. Performance management should be continuous, proactive, and transparent. Consider a system of continuous performance feedback to help keep employees engaged and focused on where to put their efforts. Performance management technology can be a great addition to an HR infrastructure, as it simplifies communication between employees and managers, and makes it easier to lay out clear expectations and provide frequent feedback.
The remaining items on our list revolve around data and the potential impact on your company’s performance.
Solution
Run anonymous employee satisfaction surveys once a month. Ask team members about their relationships with managers, their value at the company, their interest in their work, and their interest in programs like benefits, continuing education, conferences, and other potential programs. Use this data to actively monitor employee satisfaction, and put together programs to reward employees and incentivize performance.
14. Data-driven decision-making
Data isn’t just for sales and analytics teams. HR professionals can and should use data to inform compensation packages, total rewards programs, employee engagement programs, and more.
Solution
This is another area where technology can come in handy. Well-integrated HR software can help you gather employee satisfaction data, employee pay and raises, performance management data, and much more all in one place. That makes it much easier to create HR programs based on real data from your company’s employees.
15. Change management challenges
One of the greatest HR challenges — not to mention organizational challenges — is managing change. Whether it’s a major business pivot or a change in leadership, making employees feel comfortable and empowered during periods of change is absolutely vital.
Solution
Sometimes, the best thing an HR professional can do is simply be available. Being a resource for employees struggling with change or who need some guidance following new company protocols is an imperative aspect of change management.
16. Adapting to new technologies
There’s no shortage of technology in today’s business world. Although the average tech stack has shrunk in recent years, companies with fewer than 500 employees still use an average of 172 applications. That’s an extraordinary number. You might not even realize you use so many apps until it’s time to add a new one to the workflow.
Solution
Learning a new app or system is harder for some than others. Again, the best thing you can do is be a resource and don’t be afraid to ask for help yourself. When you hear the organization plans to add a new technology, make sure you’re the first to learn it so you can help teach it to others.
Embrace the future of HR management
There are many HR challenges in today’s fast-paced business world. Fortunately, every challenge has several solutions. With this guide, you’ll have the assistance you need to navigate a range of challenges and reach the best business outcomes.
For more solutions to your HR to-dos, check out OnPay’s comprehensive HR tools.
