Anyone who’s worked in human resources knows that there are a host of HR issues that need to be managed, juggled, and solved on a regular basis. HR teams are busy, and the problems they face are diverse.
While it’s likely little comfort for HR pros dealing with these challenges right now, it may give you a bit of comfort knowing that these issues are prevalent across industries and companies of all sizes. Everyone’s in the same boat, and there’s a wealth of information available to help you solve virtually any HR issue you face.
This article will focus on 10 of the most prominent HR issues companies face today. It will share the scope of the issue, and offer some solutions for how to come out on top.
First, let’s back up and recap what an HR department—or HR management—actually does.
What does HR management involve?
HR managers may be responsible for a wide range of activities related to hiring and managing employees at a company.
Responsibilities found under the HR umbrella might include:
- Job design (job descriptions, recruitment ads, strategic prioritization)
- Workforce planning
- Training and development of existing employees
- Performance management
- Compensation and benefits management
- Navigating legal requirements
- Health and safety
In the largest organizations, these responsibilities are usually split across an HR organization. Smaller companies, however, often don't have that luxury, and one or two people may have to juggle these priorities.
This lack of resources or manpower is at the core of many HR problems companies face. There are many jobs to be done - all of which are important - but it may not be possible to do all of them with the limited resources available.
The rest of this article will focus on the most prevalent HR issues, and offer possible solutions.
Common HR issues (and their solutions)
This section will highlight the HR issues that are top of mind for companies in 2024 (and likely beyond). These challenges were identified by Recruitee’s internal experts, as well as industry research to get an idea of what is keeping HR pros awake at night.
1. Recruiting the right people quickly
Recruiting the right people is and always will be a priority for HR departments. But the speed at which that needs to be done is only accelerating. This is especially true in times of extreme talent shortage amongst highly in-demand skills sets.
In fact, according to the Manupower Group’s 2024 Global Talent Shortage study, 75% of employers are reporting difficulty in filling roles. They agree, by extension, that this makes having an efficient (and effective) recruitment process more critical than ever.
This HR issue is particularly acute in industries like healthcare, IT, and consumer goods, where talent shortage is most pronounced, according to the Manupower study. But not being able to fill these roles isn’t the only challenge. The pressure to fill them quickly can also lead to rused hiring decisions, which may not result in the best fit for the organization.
Challenges
- High competition for top talent: Companies are increasingly competing with other companies for an ever narrowing pool of skilled candidates.
- Time-consuming recruitment processes: Lengthy hiring processes can result in losing top candidates to faster-moving competitors. And rushed hiring processes can result in costly bad hires.
- Maintaining quality while speeding up hiring: Balancing the need for quick hires with the requirement to find candidates who are a good long-term fit for the company.
Solutions
- Use the right recruitment technology. Implement AI-driven recruitment tools to streamline the hiring process and identify the best candidates more efficiently.
- Optimize the hiring process. Review and refine the recruitment processes to eliminate unnecessary steps and reduce time-to-hire.
- Enhance employer branding. Develop a strong employer brand to attract top talent proactively, making the company a more desirable place to work.
- Leverage recruitment analytics. Use data and recruitment analytics to track and improve recruitment performance, identifying bottlenecks and areas for improvement.
2. Diversity, equity and inclusion
Organizations are under continued pressure and scrutiny from employees and prospective candidates to demonstrate their commitment to creating a diverse and inclusive workplace. A Glassdoor study recently found that 76% of job seekers and employees consider a diverse workforce to be an importance factor when evaluating job offers.
DEI has a direct impact on both existing employees and candidates, making it a top issue not just for HR, but for senior management as well.
Challenges
- Managing bias in hiring. Recruitment teams need to be able to identify, manage, and overcome hiring biases that may affect selection and promotion decisions.
- A lack of diverse candidates. Companies without an active DEI initiative in place may find it hard to attract a diverse pool of candidates due to their existing networks and sourcing strategies.
- Ineffective DEI initiatives. Immature, pathwork, or ineffective DEI initiatives likely do not go deep enough to address the root causes of inequity at the company, and therefore fail to bring about meaningful change.
Solutions
- Implement bias training. HR should conduct—either themselves or via third party consultants—regular training sessions to help employees and hiring managers recognize and mitigate bias during hiring.
- Expand sourcing channels. Use diverse job boards, active outreach, and community partnerships to reach a broader range of candidates.
- Set measurable DEI goals. Establish clear and achievable DEI goals, and hold leadership accountable for progress. Track and report on this progress publicly to demonstrate to prospective employees that you are actively working on improving diversity metrics.
- Promote an inclusive culture. Foster an environment where all employees feel valued and included. Encourage diverse perspectives and ideas, and implement support systems and employee resource groups (ERGs) for under-represented demographics.
3. Remote and hybrid workplace management
Managing remote and hybrid workplaces has become an acute HR issue since the pandemic started in 2020. In the United States, 22% of the workforce is expected to be fully remote by 2025, with many more opting for hybrid working models.
This poses numerous issues for HR, ranging from personnel management to logistics to recruitment considerations. Many companies adapted quickly during the pandemic, but that pivot now needs to be a permanent one for many organizations.
To compensate, the HR department needs to adapt to meet the growing demands and complexities of distributed teams. This includes working cross-departmentally to introduce the right tooling and people management processes to maintain team cohesion, monitor performance, and ensure effective communication.
Note: This is not solely an HR issue. IT, senior management, and direct supervisors all have an active role to play in effectively managing remote and hybrid workplaces.
Challenges
- Maintaining team cohesion: Keeping remote and hybrid teams connected and engaged with engaging team building activities and collaboration tools.
- Monitoring performance: Ensuring that remote employees remain productive and accountable.
- Effective communication: Overcoming the barriers of physical distance to maintain clear and consistent communication.
Solutions
- Implement robust communication tools: Use platforms like Slack, Microsoft Teams, or Zoom to facilitate seamless communication. Implement tools like Miro to facilitate collaborative sessions. Use shared knowledge bases and coffee chat software to facilitate information sharing.
- Establish clear policies and guidelines: Develop comprehensive remote work policies that outline expectations, work hours, and communication protocols.
- Invest in employee engagement initiatives: Organize virtual team-building activities and regular check-ins to foster a sense of community.
4. Low employee engagement
Low employee engagement is an ever-present HR issue for many organizations. Despite the clear link between engagement, performance, and organizational success, only 31% of employees report that they’re actively engaged. That spells big trouble for organizations who rely on high performance from their employees (i.e. all organizations).
Low engagement, as we know, can lead to decreased productivity, higher turnover rates, and negative impact on the company’s bottom line. This is a longstanding issue amongst HR teams, and one that needs continued attention.
Challenges
- Disengagement at various levels. There may exist significant differences in engagement levels between senior management and frontline employees, creating a disconnect between productivity and output throughout the company.
- Lack of recognition and communication: Inadequate recognition for high performers and poor communication of business goals can lead to disengaged employees. When employees tune out, they are at a higher risk of attrition.
- Insufficient alignment of individual and organizational goals: Employees not understanding how their roles contribute to overall business strategy, creating disillusionment amongst rank and file employees. This can tank productivity, motivation, and performance.
Solutions
- Implement recognition programs: Develop formal recognition programs that reward high performers and celebrate achievements.
- Enhance communication: Ensure clear and consistent communication of business goals and strategies at all levels of the organization.
- Align goals: Create a goal alignment system that ties individual performance to corporate objectives, ensuring everyone understands their role in the company's success.
5. Retaining top employees
Employee retention is a close sibling to engagement, and another ongoing HR issue for most organizations. Employee retention, as we know, is a critical challenge and priority for HR departments.
High turnover rates can lead to significant financial costs, with the average cost of replacing a salaried employee ranging from six to nine months of their salary. Stopping attrition and retaining employees at a higher rate is a top priority for practically all companies. This is essential to maintaining productivity, morale, and organizational knowledge.
Challenges
- High turnover costs. Replacing employees can be expensive, with costs including recruitment, training, and lost productivity.
- Employee disengagement. Disengaged employees are more likely to leave, impacting overall team morale and performance.
- Lack of career development opportunities. Employees may leave if they don't see a clear path for advancement within the organization.
Solutions
- Offer competitive compensation and benefits. Ensure that salaries and benefits are competitive to retain top talent.
- Implement recognition programs. Recognize and reward employees for their contributions to keep them engaged and motivated.
- Provide career development opportunities. Create clear career paths and offer professional development programs to help employees grow within the company.
6. Burn out and high sick leave
Burnout and high rates of employee absenteeism have become a significant HR problem since the pandemic began. Burnout, driven by excessive workloads and stress, has become an increasingly common issue, leading to higher absenteeism.
This not only impacts employee wellbeing, it also has cascading impacts on productivity and financial performance. Burnout, therefore, is both a people and a business problem that needs to be addressed.
Challenges
- Excessive workloads and stress. Employees experiencing high stress levels and burnout are more likely to take sick leave.
- Poor mental health support.Inadequate support for mental health issues can exacerbate burnout and absenteeism.
- Impact on productivity and morale. High sick leave rates can lower overall team productivity and morale.
Solutions
- Promote work-life balance. Encourage flexible working hours and remote work options to help employees manage their workloads better.
- Enhance mental health support. Implement comprehensive mental health programs and provide access to counseling services.
- Foster a supportive work environment. Create a culture that values employee well-being, including regular check-ins and stress management workshops.
- Encourage open communication. Make open and honest communication the default across the organization, regardless of seniority. Put tools and channels in places for employees to share their feedback on workloads, stress, mental health issues, and burnout, and provide the appropriate support to address that feedback.
7. Balancing senior leadership wants vs employee needs
HR departments are constantly in a struggle to balance the wants and demands of senior leadership, and the needs of their employees. Effective HR management must align organizational goals with employee satisfaction to both achieve the company’s strategic mandate, and maintain employee happiness and productivity.
According to a report by Achievers, only 27% of employees feel that leadership is adequately trained to lead through changes, indicating a significant gap between leadership capabilities and employee expectations. This is a middle ground that HR teams will continuously be stuck in, with the mandate to balance and appease both parties.
Challenges
- Misalignment of priorities. Senior leadership often focuses on strategic goals, while employees prioritize day-to-day satisfaction and work-life balance.
- Communication gaps. Ineffective communication between leadership and employees can lead to misunderstandings and reduced morale.
- Resistance to change. Employees may resist changes proposed by leadership if they feel their needs and concerns are not being addressed.
Solutions
- Foster open communication. Implement regular feedback loops and town hall meetings to ensure transparency and two-way communication between leadership and employees.
- Train leaders. Provide leadership training programs to help senior leaders understand and address employee needs effectively.
- Involve employees in decision-making. Encourage a participative management style where employees have a say in decisions that affect their work and well-being.
8. Limited HR budget
Budget is a major factor for all departments. But managing HR functions on a limited budget is a particularly major challenge, given the direct impact that this team has on employees across the organization.
As companies face financial constraints, higher interest rates, and strong economic headwinds, management naturally tightens their belts. HR is not immune to these effects. As budgets are together, HR departments often struggle to allocate resources effectively while maintaining essential HR services and initiatives.
This financial limitation can impact everything from recruitment to employee development, and overall HR department effectiveness. It can also lead to HR restricting certain morale-boost initiatives like perks, compensation, and skills development—all of which can impact employee engagement and output.
Challenges
- Resource allocation. Balancing the budget between various HR functions such as recruitment, training, and employee benefits.
- Limits on initiatives and perks. Financial constraints can restrict the implementation of new initiatives and employee perks.
- Compensation and skills development. Limited budgets can hinder competitive compensation packages and opportunities for employee skills development.
Solutions
- Find efficiencies. For example, use HR software and automation tools to streamline processes and reduce administrative costs.
- Focus on high-impact areas. Prioritize HR initiatives that offer the highest return on investment, such as employee engagement programs and training.
- Seek external partnerships. Collaborate with external providers for training, benefits, and other HR services to optimize costs.
9. Change management
Effective change management is crucial for all organizations, especially in the face of significant transformations driven by technological advancements like AI, market and economic shifts, and global events that disrupt business and usual. Change is constant in a modern organization, and so are its impacts on employees.
HR must play an active role in managing change to ensure that employees pivot and adapt effectively. For many organizations, however, this remains a challenge. According to a report from Willis Towers Watson, a staggering 70% of change initiatives fail in some capacity, with poor leadership being the primary culprit.
Because of that high failure rate, employee perception of change isn’t great. Only 43% of surveyed employees say their organization is good at managing change, and only 25% say that it’s a strength amongst their senior leaders.
Clearly, there is room of improvement across the organization. As the department that directly interacts with employees most often, HR must take an active role in change management, acting as the conduit between workers and senior managers.
Challenges
- Employee resistance. Mistrust in the organization and fear of the unknown lead to high resistance to change.
- Communication barriers. Ineffective communication of change initiatives can cause confusion and anxiety among employees.
- Change fatigue. Constant changes can overwhelm employees, leading to stress and decreased productivity.
Solutions
- Engage employees in the process. Involve employees in creating and implementing change strategies to increase buy-in and reduce resistance.
- Enhance communication. Clearly articulate the reasons for change and how it benefits both the organization and the employees.
- Support mental health. Provide resources and support to help employees manage stress and adapt to changes, such as counseling and stress management workshops.
10. Reductions in workforce (aka layoffs)
Reductions in workforce (RIF)—commonly known as layoffs—have had an enormous impact on virtually every sector of the economy since the start of 2020. Businesses hit hard by COVID-19 had to first layoff parts of their staff. And once the tech bubble burst starting in 2022, mass layoffs in this industry took the baton. To say this is a major HR issue would be an understatement.
Layoffs affect everyone—from the people losing their jobs to the team members who have to break the news to their colleagues. For HR, the issues are amplified. They’re often directly involved in the RIF planning process, are often the frontlines of speaking to impacted employees, and have increasingly been victims of layoffs themselves.
There’s no easy way to deal with mass layoffs—especially if they come in multiple rounds. But it’s best to be eyes wide open about this prevalent HR issue, and take the appropriate steps to help ease a difficult situation.
Challenges
- Employee morale and trust. Layoffs can lead to decreased morale and trust among remaining employees.
- Legal and compliance issues. Ensuring layoffs are conducted in compliance with labor laws and regulations.
- Rebuilding the workforce. Managing the loss of skills and experience while trying to rebuild a productive team.
Solutions
- Transparent communication. Maintain open and honest communication with employees about the reasons for layoffs and future plans.
- Support for affected employees. Provide outplacement services and career counseling to help laid-off employees transition to new jobs.
- Focus on retention and engagement. Implement strategies to boost morale and retain remaining employees, such as recognition programs and professional development opportunities.
The HR department is often one of the busiest in most companies. That becomes even more apparent in smaller companies with fewer employees dedicated to these mission-critical tasks. This is a very multifaceted role that brings with it many unique problems and challenges.
Like with most business challenges, focusing on strong communication, technology, processes, and goal tracking can help you overcome these common HR problems in companies.
