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Featured blog post banner of Top 10 Challenges Faced By HRs In 2022 and How To Overcome Them

Top 10 Challenges Faced By HRs In 2023 and How To Overcome Them

The modern working environment is changing at an unprecedented faster pace. HR leaders encounter many challenges as organizations get impacted by the disruptive change of priorities among employees due to the adoption of new business models.

According to the Today and Tomorrow survey conducted by PricewaterhouseCoopers for the World Federation of Personnel Management Associations (WFPMA), 48% of the surveyed HR professionals feel a need for change in management policies.

Also, most respondents agree that nurturing ‘human skills’ is the second most crucial challenge after ‘building trust.’ Furthermore, 91% of respondents agree that employees see being part of an organization trusted by society as critical to their future.

Keeping these developments in mind, in this article, we will explore the challenges faced by HR as new work cultures rise and better work/life balance becomes mandatory.

More than 4.3 million people voluntarily quit their jobs by the end of 2021, as per the US Bureau of Labor Statistics. Employees have gone more discerning about what they want from their jobs, so they are looking for opportunities that better match their talent and offer flexibility. 

Attracting and retaining a good workforce is a significant challenge for HRs in 2023. It is even more difficult for small and medium enterprises since workers seek opportunities that offer better benefits, where more prominent brands often shine. Attracting talent is one part of the challenge, but it also goes beyond recruitment.

Retention of blue-collar workers through various initiatives like offering better increments, health benefits, work-life balance, and opportunities to learn is also essential. HR leaders should build a stronger employer brand to overcome this challenge. They should check social platforms like Glassdoor and Great Place to Work

These platforms can help create a solid and positive employer brand as the information shared about your organization here is privy to prospective employees. Active Corporate Social Responsibility (CSR) activities can help build an emotional platform for prospective employee-employer bonding.

For instance, presenting employees with opportunities to contribute to causes they are passionate about. Companies can arrange for skills-based micro-volunteering opportunities through platforms like Catchafire where employees can contribute with their skills rather than donating money. 

Furthermore, HR managers should create a structured onboarding process that helps recruits get accustomed to the new work environment quickly. 

Integrating technology into the hiring process can significantly enhance efficiency. Online talent acquisition software plays a key role in streamlining candidate interactions, managing resumes, and tracking the progress of applicants through the hiring pipeline.

With the ability to automate routine tasks, such software allows HR teams to focus on strategic aspects of recruitment, ultimately expediting the identification of the right talent.

2. Making Diversity, Equity, and Inclusion (DEI) a strategic goal

According to Gartner, 69% of companies have identified that workforce diversity and inclusion are essential for strategic development in the wake of the hybrid work culture. Yet, only 35% of HR leaders prioritize DEI for the coming years. In 2023, challenges faced by human resource management include DEI-related issues.

HR leaders will have to diversify the workforce to create an inclusionary working environment. To create a diversified workforce, you have to be strategic and person-specific. You can leverage diverse job boards like Recruit Disability which helps locate people with disability looking for work.

In the age of remote work, it’s also possible to lean into DEI principles by hiring internationally. Leveraging remote technology to acquire talent from overseas not only helps you uncover a wider range of potential candidates, but it can also enable you to embrace diverse experiences, perspectives, and ways of thinking.

A recommended move is to highlight diversity on the career page of your organization’s website to let prospective employees know you support DEI.

3. Compensation and Benefits

Amid growing competition to hire talent and the great resignation, employees revisit the compensation and benefits requirements. Companies offer pay increases, more benefits, and going beyond the norms to provide perks like health benefits and flexibility. If HR leaders are not ready with a strategy to match talent expectations, it will be tough to recruit and retain top talent in 2023.

The solution lies in designing a compensation structure that best fits your organization and meets industry standards. One of the significant challenges HR managers face is deciding what benefits matter in 2023; you should do some market research. Workers want more flexibility; it is a substantial benefit to offer.

Another way to ensure a return on investment is to provide variable performance-based components. Such performance-linked rewards will keep employees motivated to perform at their best.

4. Prioritizing employee mental and emotional well-being

In the wake of the pandemic, workers’ mental health and resilience are at the forefront in 2023. Employee well-being is no longer just about physical well-being but has mental and emotional well-being as essential aspects. As the hybrid work environment blurs the line between work and personal life, companies will be required to invest heavily in improving employee well-being to remain resilient and confident.

There is a need to make arrangements for a positive and healthier work environment for field staff. They should not feel the stress of too drastic changes in work culture due to the adoption of new technologies.

Employee well-being has evolved beyond physical well-being to include the development of a holistic well-being culture. Future Workplace has identified the top seven pillars of holistic employee well-being:

  • Physical well-being
  • Career well-being
  • Financial well-being
  • Social well-being
  • Community well-being
  • Emotional well-being
  • Purpose-driven well-being

HR managers should focus on these pillars and create a strategy to address all seven.

5. Equipping future leaders

In a survey, the leadership consulting firm DDI surveyed 368 CEOs and 2,102 HR professionals to understand how ready their leaders are to take more responsibility in the future. Surprisingly, the respondents rated only 38% of their mid-level leaders as “very good,” or “excellent” rest were not satisfactory in the role.

In 2023, one of the biggest challenges faced by HRM is the global talent shortage. The onus is on the HR leaders to nurture talent within the organization for long-term success.

HR leaders must work on strategies that upskill mid-level managers to prepare them as future leaders for better promotional opportunities. The focus must be on nurturing empathy-driven managers who consciously address the needs of their subordinates.

6. Not being able to automate routine tasks

HR responsibilities are shifting in the hybrid work culture. The HR managers should be focusing more on the strategic areas that lead to business development rather than wasting time on repetitive administrative tasks. Interestingly, according to McKinsey, we have the technologies available to automate 56% of human resource functions.

Automating routine administrative tasks can help you focus on aspects that directly impact employee engagement and retention. While technology cannot replace teamwork, communication, or collaboration, it can help human resource specialists focus on understanding people, which is crucial in developing work relationships.

An example of how automation can help HR is by using software-based time tracking and attendance management. Recording employee time and attendance can be automated with solutions like Truein which is a face recognition attendance system that automates the entire process and integrates with most payroll solutions.

Implementing such systems help HR leaders make payroll more effective and increase productivity while minimizing human errors.

7. Being well-versed with people analytics

People analytics will give organizations a lead in the competition. In 2023, deploying analytics, virtual work technology, and using more comprehensive learning platforms is essential. HR managers can no longer make decisions based on their intuition; rather, the success lies with data-driven decision-making.

For a long time, organizations have relied on gut feeling, intuition, and prior experience policies. HR should take up the challenge to introduce people analytics in the Workplace to make more confident decisions. HR managers can move beyond administrators and become value generators by implementing people analytics.

To maximize the value you get from people analytics investment, make sure you establish a culture of constant listening. Transparent listening help over challenges faced by HR in team building.

8. Positive change management

Over 54% of HR leaders Gartner surveyed on their 2023 goals reported change anxiety. The survey found that little day-to-day adjustments like adjusting to the new hybrid work environment, new teammates, a new boss, or tiny process shifts caused 2.5 times more exhaustion in employees than any significant revolutionary changes.

Given that change is inevitable in the fast-paced, ever-changing corporate world, change management is one of the biggest challenges facing human resource management in the 21st century. These changes can be structural, economic, geographical, managerial, procedural, and, most commonly, technological. Inability to foresee, plan or predict these changes can lead to lower productivity, unpreparedness, and high attrition.

Businesses that survive unforeseen disruptions like the COVID-19 epidemic are the ones that proactively embrace changes rather than reacting to external causes. Since the pandemic, organizations have adopted an “adapt or perish” mentality, but actual sustainable survival is only possible when companies embrace change as part of their culture.

The best practice to manage change positively is to predict it and prepare the workers to adapt to these changes. Not every employee will react positively to sudden change, which is why communicating the changes early on is better so that employees can make adjustments at their own pace.

9. Upgrading the recruitment and onboarding tools

As hiring the best talent becomes fiercer, HR managers have to adopt new technological tools for recruiting like AI and Machine Learning to refine the recruitment process. AI is making it easier for HR to hire talent remotely by assisting with remote recruitment, interviewing, and onboarding.

Most companies are already using artificial intelligence to screen resumes through Applicant Tracking Systems. The requirement for a human viewpoint will always be there as AI can speed up the hiring process, but issues like discrimination and unequal hiring practices still need human intervention.

10. Continuous learning and succession planning

In the end, HR is responsible for providing an environment that stimulates the growth and success of employees. But when the work culture is becoming more and more hybrid, it is challenging to promote upskilling and continuous learning. HRM is responsible for fostering an environment of learning to match the rising ambitions of employees.

It is essential because 94% of employees agree that they will voluntarily stay with a company longer if it invests in their learning and upskilling.

Therefore, HR managers must identify training relevant to the current trends. Also, they need to adopt a practical rather than theoretical approach to upskill employees.

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In 2023, the challenges faced by HR leaders will be complicated, and so organizations need employee integration, cooperation, and transparent communication to grow in a hybrid work environment. HR managers must manage the challenges we have listed here to help their organizations succeed through a diverse and productive workforce.

Human Resource Management remains a crucial aspect necessary to building a unique workplace culture in the current scenario. Proper management of these challenges will eliminate employee uncertainties, providing the organization with a competitive advantage.

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