Top 15 HR

Challenges in
2023
(+Solutions)
PROF JULIET K BUCOY, Ph.D

Disha Gupta
https://whatfix.com/blog/hr-challenges/
• Organizations, in the past, were focused on more significant
challenges like revenue, competition, and economic instability,
with an evident lack of attention on human resources. However,
with changing business models and industries, HR has become
the prime focus as organizations realize the importance of
handling the workforce to influence growth and success.

• With this, the responsibilities of human resources teams, such as

attracting top talent, building a positive work culture, creating
the right job roles and opportunities, ensuring continuous
training and development, fostering strong performance
management, and offering attractive compensation, have also
grown considerably.

• With great responsibilities come great challenges that can impact

effective human resource management. This article outlines the
top 15 HR challenges commonly faced by organizations and
their possible solutions.
What Are HR
Challenges? • Every organization, regardless of industry or size, is likely
to encounter challenges when managing its workforce. As
businesses focus more on improving employee experience
and culture, the volume and nature of the challenges faced
by human resources professionals continue to increase.

• Many HR challenges can emerge with digital disruptions,

workplace cultural shifts, economic changes, political
climate changes, etc. For instance, the year 2020 put
forward an enormous challenge for the HR departments to
create, tackle, and manage efficient remote workforces for
businesses to keep running successfully amidst the
pandemic.
1. Attracting top • Talent acquisition is a top priority for HR given the competitive nature of

talent the current market. Demographic changes, growing demand for talent, and
a shortage of suitable candidates require companies to constantly search
for and hire top talent. However, with the ever-increasing demand for
skilled workers, HR teams struggle to attract candidates with compatible
skills or experience, which poses one of the most significant challenges of
workforce management.

• Solution – Competitive compensation and employee benefits packages are

essential for attracting talent to your organization. To compete, you need
to dig deeper and offer your employees meaningful experiences and a
greater sense of purpose. Your employer brand, based on your most valued
and unique elements, can help convey that purpose and attract people who
are motivated by it.

• To define your employer brand, identify the mission, vision, and values
you want your company culture to be based on. Focus on building your
diversity, equity, and inclusion efforts to foster a greater sense of
belonging for all employees.
 2. Change
management
• Change is never easy, but it’s the nature of the business space. Implementing change and
developing long-term plans that account for that change is one of the most significant human
resource challenges. Organizational change can be structural, economical, geographical,
procedural, managerial, or technological.

• No matter the type of change, HR teams face major issues in terms of reduced employee
morale and satisfaction, self-doubt, and attrition while managing it. The inability to adapt to
change could be due to employee resistance to change, lack of necessary skill and training to
adapt to change, sudden but drastic requirements to change, etc.

• Solution – A good starting point for effective change management is to communicate

frequently and transparently before, during, and after periods of change. Provide significant
warning and notice of upcoming changes and equip employees with the necessary skills and
strategies to respond to and overcome them. Include employees in decision-making and
communicate the rationale behind changes.
 • Keeping up with the pace of digital transformation is a significant challenge
faced by HR because integrating the latest technologies not only brings

3.
powerful business opportunities but also creates challenges and skill gaps for
the current workforce.

Reskilling
• Solution – For an organization to stay competitive, it must have a workforce
with the right skills to be productive, innovative, and ultimately drive more
revenue. Creating a learning and development initiative around employee

and
upskilling and reskilling is a way to ensure your workforce has the skills
needed to thrive and help your organization grow.

upskilling
• Reskilling is a process where employees learn new skills to move into a
different job role within an organization or to meet the new demands of a
current role. On the other hand, upskilling is the process of learning new
skills and acquiring relevant competencies needed for today’s work
environment and the near future.

• Reskilling your employees is a complex task that demands strategic L&D

planning.
 • Create your reskilling plan by mapping out your current needs, skill gaps,
where your business is headed, and what it takes to get there.
• Conduct a skill gap analysis to get a list of skills employees already have, need
to improve, and need to develop.

Here are a • Set clear and tangible goals that will structure your reskilling efforts and gauge
the results.

few steps to • Choose an appropriate training method for your reskilling training program.
• Pro tip – Consider having several employee training methods to encourage

set your
flexibility and offer options that work best for the different learning styles and
skill gaps you’re hoping to address.

reskilling • Leverage employee training software such as corporate LMS, digital adoption
platform, or a knowledge management system to deliver effective reskilling

programs up programs.
• Measure the impact of your training efforts by collecting data from surveys,

for success:
discussions, and post-training assessments.
• Anticipating the right skills for the future, developing effective training
programs, and building a culture of continuous learning and development with
the right EdTech empowers organizations to upskill their workforce
successfully.
 Here are a few steps to help you plan effective
upskilling for your workforce:
• Here are a few steps to help you plan effective upskilling for your workforce:

• Conduct a skills gap analysis to determine whether your workforce’s current skills meet the overall needs of
the company.
• Emphasize the importance of upskilling for the future progression of employees’ careers by building
specific skills into their annual goals and learning objectives.
• Choose an appropriate training method for your upskilling program, such as – eLearning, on-the-job
training, coaching, group activities, video training, cross-training, job shadowing, etc.
• Leverage employee training software to deliver effective upskilling programs.
• Monitor KPIs such as course completion rates, training progression rates, assessment scores, lowering skill
gap analysis, improving proficiency or productivity, etc., to determine training effectiveness and knowledge
or skill acquisition by the end of your upskilling program.
4.
The last decade has seen HR digital transformation scale across organizations as
companies upgrade their legacy processes and systems to new cloud technologies.
These new software applications help automate manual processes, drive innovation,
and enable employee efficiency and productivity. The ability of your workforce to

Building
adopt these new software applications or technology designed to make them more
efficient is called digital dexterity.

digital
dexterity Although digital transformation isn’t the sole responsibility of a specific department–
and neither is digital dexterity– the burden of creating application onboarding,
reskilling, and upskilling training content and courses for building digital dexterity
skills falls on the HR and L&D departments.

Solution – Building digital dexterity is an organization’s insurance policy for

achieving ROI with digital technologies. Without the skill sets to utilize software
applications properly, technology investments will not only fail to find ROI but also
face other severe repercussions such as dirty or inaccurate data, not meeting
compliance laws, failing to meet goals, etc.
 Here are some best practices to improve
digital dexterity in your workplace:
• Create a larger digital adoption strategy that provides a framework for driving adoption
across the digital transformation lifecycle – from application research, implementation, and
end-user training.
• Identify the technologies your company plans to adopt. Then, assess how these technologies
will impact your organization and existing processes and what new skills your employees
need to learn to stay relevant.
• Overcommunicate and gather feedback from employees to understand their diverse needs.
Then, segment employees into cohorts you can target with personalized digital dexterity
development programs suited best for these well-defined groups.
• Take an evolved approach to software onboarding by using a digital adoption platform (DAP)
to enable your employees with in-app guidance and on-demand support – all in the flow of
work.
• Focus on continuous, learner-centric upskilling and reskilling training.
• Apart from training your employees, empower business leaders and function heads to
understand emerging technologies disrupting their industry.
• Foster a culture of change in the workplace.
 5. Managing diversity
• Globalization is affecting every business in every part of the world. This makes
diversity a hot topic in human resources. Diversity comes with its own HR
challenges, such as managing diverse cultures in a local team or addressing the
requirements and experience of employees of different ages, genders,
nationalities, or ethnicities.

• Solution – Start by evaluating the state of DEI (diversity, equity, and inclusion)
in your workplace, and set clear goals for diversity expansion. Assign key
results and clear ownership for each set objective and put resources against each
objective so their owners can deliver the results you need.

• HR teams should also communicate the importance and benefits of diversity

initiatives to employees to boost diversity and inclusion. Team building
activities are also effective for integrating employees of different cultures and
uniting them toward common business objectives.
6. Employee engagement
• Employee engagement is an ongoing concern for HR professionals, as
keeping employees engaged is critical to a business’s success. When
employees find their jobs challenging, engaging, and rewarding, they’re more
likely to stick around and invest themselves in their work.

• On the other hand, disengaged employees who are dissatisfied with their roles
and feel disconnected from their work can cause significant problems in the
workplace. Not only do they underperform, but they also create friction for
high performers.

• Solution – Employee engagement is built through two-way communication

and commitment. When employees feel like their voice is heard, their
opinions are valued, and they’re an essential piece of the company’s growth,
they’re more likely to be engaged.
Here are some actionable steps you can take to
improve employee engagement:

• Create an engaging onboarding experience

• Show recognition and appreciation
• Have effective, open communication
• Prioritize work-life balance
• Create a continuous feedback loop for your employees
• Invest in employee development
• Avoid micromanagement
 An employee leaving to join another organization they feel is a better fit is not a pleasant scenario for
any employer. And the situation is made worse when employees with mission-critical skills decide to

7.
leave. Apart from costing an employer almost double an employee’s salary to replace them, an
employee’s departure brings other challenges, including time and money spent on training new hires,
low work productivity, and negative employee morale.

Employe
e To combat this, HR teams must try to retain the current workforce — or risk losing them

retention
to a highly competitive talent market.

Solution – The first step to improving employee retention is finding out why employees
are leaving in the first place. Exit interviews can provide insights into the reasons for
employees leaving, and using this knowledge can help HR professionals develop plans
to address the factors driving employee turnover.
Some other strategies to boost
employee retention include:

• Offering flexible work schedules for employees to maintain

a healthy work-life balance
• Offering wellness programs
• Providing a clearly laid-out employee development plan for
advancement
• Providing positive feedback frequently to keep employees
motivated
• Having an open and healthy line of communication where
employees do not hesitate to come to you with any ideas or
concerns
• Investing in smart onboarding processes
8. Leadership development
Organizations often overlook the need for
training and grooming of the leadership. It’s
a common misconception that leaders have
reached a stage where they don’t require
ongoing training. And even if they do, it can
be achieved through self-learning.
However, the lack of leadership development
results in employer-employee conflicts,
disagreements in the workplace, an
unhealthy work environment, and employees
leaving due to poor relationships with their
managers. This affects employee morale,
satisfaction, and the organization’s goals;
hence is a significant HR challenge.
Solution – Training and development for leaders should be given as much importance as it holds for other employees. While
technical aspects can be self-learned by the leaders, it’s crucial to conduct leadership development training to encourage
managers and leaders to:

Find new, innovative ways of developing and managing people

Develop new business opportunities

Tackle the broader societal issues they face

Decrease employee turnover and increase engagement

Successful companies also have a succession plan in place when key leaders need to be replaced. Creating a succession plan
helps organizations identify and document critical skills and knowledge to pass on to prepare their next-generation leaders for a
seamless succession within the company.
9. Employee health and well-
being
• Employee health and safety standards are probably one of the more apparent
human resource challenges. These concerts are not only governed by labor law, but
they’re also crucial to general employee well-being.
• The psychological well-being of your employees can deteriorate due to high
demands, limited time, frustration, and burnout.

• Solution – Making efforts to boost the mental health of employees should be a

priority for all employers. Here are a few ways you can help protect and manage
your employees’ health and well-being:
• An open-door policy to discuss anxiety, working hours and unfair expectations.
• Training managers in Emotional Intelligence (EQ) can help them recognize the
benefits of a healthy mental state.
9. Employee health and
well-being
• Training in mindfulness and general stress coping techniques can help
build a resilient workforce.

• Encourage employees to take small breaks away from the computer

throughout the day.

• Make use of the communication tools like Slack, Google Hangouts,

Skype to give employees a space for discussions, be socially active, share
latest news, and talk about their interests.

• Provide access to mental health programs.

 • Finding the right candidate to fill a vacant position in an
organization can be a lengthy and tiresome process. After devoting
countless hours to recruiting the right talent, all that hard work

10.
goes down the drain if a new hire ends up quitting in the next few
months – taking HR back to square one. To combat this, HR teams
must build an engaged workforce committed to staying with the

Employee
company for the long haul.

onboarding
• Solution – As they say, the first impression is the last; the
employee onboarding process plays a major role in building a new
hire’s commitment to the organization. A strong onboarding
process increases employee engagement, invokes a sense of loyalty
in new hires, promotes proper training and adoption of business
processes, and helps improve long-term employee retention rates.
• Create a welcoming environment that helps
new hires familiarize themselves with the
team, company culture, and overall
organizational goals and processes, and
empowers them with the proper knowledge
and processes to be productive quickly.
Creating an onboarding process requires HR
teams and people managers to think through
the experience as a new employee would
and consider what new hires will face at
different points in their new role – ultimately
making their transition into their new role as
easy as possible
11. New-hire training
• As soon as your company finds new talent to fill much-
needed roles, it’s necessary to implement successful new-
hire training programs for every employee recruited. If
the initial training is a disjointed or nonexistent effort,
new employees will struggle to understand and perform
their duties successfully – and you may even find yourself
losing employees faster than you can hire them.

• Solution – Carefully craft a new-hire training program for

your recruits to help them grow their knowledge base and
improve their skills to become more effective quickly.
Here are a
few quick tips Establish what you want them
for training
to learn and how you will
provide that learning (online,
daily meetings, manuals, etc.).
new hires
effectively:
Provide regular feedback to
ensure your new employees
are performing their tasks
appropriately and are on track
to meeting their established
goals.
Consult your current
employees about their training
experience to improve the
experience for the new hires.
Implement employee training
software such as a digital
adoption platform that
integrates with digital tools to
provide automated,
personalized training in the
flow of work.
Set SMART goals to help
employees understand what is
expected of them.
Have a reliable location where
employees can find the
training videos, training
manuals, and answers to their
questions all in one place.
12. Remote workforce
management
• The outbreak of COVID-19 brought many changes in the world, but the most
apparent impact of the pandemic is the accelerated adoption of remote work culture.

• Embracing the remote work culture has become a norm for employers. Providing
their workers flexible work arrangements gives companies the edge to attract top
talent. However, some HR teams still struggle to maintain a productive remote
workforce in their organization.

• Solution – The key to effective remote workforce management is practicing open

communication, keeping employees engaged, monitoring your teams’ productivity,
and avoiding loss of efficiency. All these factors can be achieved with the right tools
and knowledge, and a bit of ingenuity and remote workforce management will be a
breeze.
Here are some of the ways to
enable remote workforce
management

• Productivity tools, line of business applications, communication and collaboration tools,

company laptops, and mobile devices must be made available to your remote workforce.
• Consider opting for a digital adoption platform that promotes learning in the flow of work.
It is the most productive way of managing remote workforce training on enterprise
applications.
• Encourage one-on-one (manager-reportee) check-ins daily and weekly team meetings via
video calls to keep the remote workforce connected to their team.
• Develop a remote work policy to help employees understand what is expected of them as
they work remotely.
• Encourage virtual employee engagement by setting up ways for team members to
communicate socially.
13. Employee
experience
• Employee experience is the aggregation of all interactions and observations an
employee has throughout their journey. This includes experiences within their job role,
work environment, and management. Studies show that companies that invest in
optimizing employee experience see:

• Higher profits overall and higher revenue from new products

• Better customer satisfaction, higher NPS, and easier upsells
• Higher employee satisfaction combined with more productive and bought-in team
members
• Better new hire recruiting and employee retention.
• While connecting employee experience with overall business success may seem
straightforward, ensuring that personnel has consistently favorable experiences
throughout their employee life cycle is no simple task. It requires ongoing monitoring
and management for the HR teams to excel in these efforts.
 Here are the five most significant contributing
factors to a positive employee experience:

• Solution – Here are the five most significant contributing factors to a positive employee
experience:

• Make employees feel empowered to make decisions independently, not be micromanaged,

and contribute to impactful projects.
• Set clear and transparent goals, provide coaching over traditional training, invest in people
managers to develop better management skills, and utilize agile performance management
methods.
• Provide flexible working hours for employees to maintain a healthy work-life balance.
• Invest in high-impact employee development programs to show employees you believe in
them and want them at your company for the long haul.
• Invest in employee experience management software to promote employee engagement,
productivity, and efficiency.
 • Business leaders realize the importance of HR departments
in creating a thriving organization. However, they are often

14. unsure of how to measure its effectiveness. It’s crucial to

understand if the HR function delivers everything in the

Measuring
most effective way possible and uses the resources (time
and money) productively.

HR • Solution – To measure the effectiveness of your HR

function, establish relevant metrics depending on what you

effectivenes want to understand. For instance, track metrics like quality

of hire and cost of hire to uncover the effectiveness of your

s
recruitment process.
Here are some of the
metrics to use to measure
HR effectiveness:
• Employee net promoter score (eNPS)
• Employee engagement rate
• Employee turnover rate
• Employee retention rate
• Employee absenteeism rate
• Revenue per employee
• Training expenses per employee
15. Compensation and
benefits
• Competitive compensation and employee benefits packages are
essential in attracting talent to your organization. It’s a big part of
keeping employees happy, motivated, and satisfied with their job.
HR teams must be cautious when designing employee
compensation and benefits packages.

• Solution – Compensation doesn’t always have to be about salary.

HR professionals can find other ways to motivate workers rather
than a continual rise in the payroll. You can design employee
rewards and recognition programs, accommodate requests for
flexibility and remote work, offer training and development
opportunities, extend vacation time, provide well-being programs
and transport benefits, and more to compensate for your employee’s
hard work. These methods will motivate your employees and
improve employee engagement at the same time.