15 Common HR Challenges and Solutions for Progressive Workplace

From managing employee relations, payroll, and benefits to talent acquisition, human resource management evolves a wide range of responsibilities. However, HR management has faced a lot of challenges due to the constant changes in the modern workspace.

These HR issues are varied based on the organization’s size, type, workplace practices, employee values, and benefits. Also, there will be some global and potential future challenges for human resource management. And, all of these problems require creative and innovative solutions. 

In this write-up, we’ll explore the 15 most common HR Challenges and solutions related to organization, global, and future trends.

Let’s dive into it!

What is meant by HR challenges?

Human Resource (HR) challenges refer to the complex issues and obstacles faced by organizations in effectively managing their workforce. And the HR challenges are mostly related to the acquisition, development, engagement, and retention of employees. However, these challenges can differ from company to company. HR professionals need to implement effective strategies and adapt to technological advancements in the field. 

For example, consider a rapidly growing technology startup. The company has been successful in attracting top talent but is now facing challenges related to talent retention. Many employees, despite being highly skilled, are leaving the organization for perceived better opportunities elsewhere.

The effective solutions for these HR challenges may involve improving employee engagement, offering attractive career development opportunities, positive organizational culture, and staying competitive in the recruitment market.

Successfully navigating all of these Common human resources management challenges and solutions is crucial for any organization. It will ensure a motivated and skilled workforce to contribute to the overall success and sustainability of the business.

15 Common HR Challenges and Solutions (Organizational, Global & Upcoming)

To address the challenges in human resource management, we’ve classified them into 3 categories: Organizational, global, and upcoming.

In this section, we’ll find out the associated issues with their effective solution for each category. Understanding and working through these challenges will definitely help your company to succeed and stay strong in the modern business world.

HRM Challenges and Solutions for Small Organizations

When it comes to managing human resources, small organizations often encounter various challenges. Due to limited size and resources, small size (1-99 employees) companies struggle. That also makes a crucial impact on the organization’s overall success.

Here are the 3 common human resource management challenges and solutions of small organizations:

1. Limited HR Expertise 

Initially, small companies have lackings in dedicated and expert HR staff. As a result, it will be challenging to handle all human resource-related functions properly. 

Besides, limited expertise in HRM affects the company policies, work culture, as well as retention process. Also, they often face problems with recruitment which fails to efficient talent acquisition. 

✅ Solutions

✔️ Invest in HR training to enhance their knowledge and skills 

✔️ Utilize online resources, industry publications, and webinars 

✔️ Outsource certain HR functions to stay updated on HR best practices 

2. Employee Compensation and Benefits 

Next, we’re going to talk about one of the vital human resource problems and solutions to it. The HRM of small organizations struggles to provide competitive compensation and benefits to the employees because of proper policy and budget shortages. 

Moreover, they have limited resources and training material. As a result, they often fail to provide extensive training and development opportunities to the employees. 

So, maintaining and ensuring employees’ compensation and benefits are also unavoidable challenges of human resource management. Let’s see the solutions for this HR challenge:

✅ Solutions

✔️ Make proper policies that benefit employees and the company

✔️ Utilize affordable HR software to automate payroll system

✔️ Identify cost-effective training materials (online, webinar) and continue the learning opportunities 

3. Compliance with Employment Law

Keeping up with labor laws and ensuring compliance are also challenging for the human resource management of small-size companies. 

Many small organizations neglect the employment law and that may result in legal issues and even demise of the company. 

Here are the effective solutions for the human resource problem:

✅ Solutions

✔️ Proper knowledge of the U.S. Department of Labor’s Employment Law Guide

✔️ Proper regulation of hiring practices, wage payment, workplace safety, etc

✔️ Regular review of the law guide and keeping updated on the HR policies

HR Challenges and Solutions for Mid-size Organizations

Mid-size organizations are emerging as key players in bridging the gaps between small startups and large enterprises.

Though they can overcome the challenges of small organizations, still go through several HRM issues including:

1. Scaling HR Process 

As mid-size companies expand gradually, they often face problems in scaling the overall human resource operations. They include recruiting and onboarding employees swiftly, balancing between quality and quantity, measuring employees’ performance, and so on.

Then how to deal with mid-size companies’ human resource problems? Here are the solutions:

✅ Solutions

✔️ Develop efficient strategies for streamlining the recruitment process

✔️ Automate performance regulation processes 

✔️ Build a robust onboarding system 

Learn more 👉 Top 5 Free HR Onboarding Software: Make Onboarding Easy

2. Leadership Development 

When mid-size companies start to grow, proper enforcement of leadership is a must. However, leadership development is a significant challenge for them. That is also required to ensure the companies’ conflict management and resolution effectively. 

Besides, identifying and nurturing leadership potential within the existing talent pool can be also challenging without a dedicated system in place. 

But no need to worry! We’re presenting the solutions for human resource challenges to establish effective leadership:

✅ Solutions

✔️ Research, design, and establish a leading development program to enhance skills, knowledge, and capabilities 

✔️ Encourage cross-functional programs and collaborate with different teams

✔️ Cultivate a learning-oriented work culture rather than a competition culture 

3. Succession Planning 

When talking about Common human resources problems and solutions, proper succession planning is one of them for mid-size companies as it’s crucial to ensure a smooth transition from mid-size to large enterprises. But, the absence of an efficient succession plan in human resource management can lead to disruptions in the future goals of the company. 

✅ Solutions

✔️ Identify quality employees and cross-train to increase expertise

✔️ Develop a proper succession plan with a clear vision and roadmap 

✔️ Regularly review the growth and update the succession outline if necessary 

How Much Does HR Software Cost: Decoding the Price Tag 🤔

Human Resource Management Problems and Solutions for Large Business

When the organization’s size increases, the challenges associated with human resources also increase. For this reason, larger enterprises have to deal with massive challenges while developing an ideal and effective human resource management. 

Let’s see the major HRM Challenges for Large Businesses: 

1. Managing Diversity and Inclusion

When a company has more than 500 employees, ensuring a diverse and inclusive workplace for all is a great challenge for the HR management department. 

While lots of employees work in various roles from different areas, they must feel that they are equally involved in their workplace. Also, managing organizational culture and communication is a must for a large enterprise. 

In that case,  the human resource manager sometimes fails to establish and manage effectively diversity and inclusion for all. 

Here are the solutions to hr challenges to manage diversity and inclusion:

✅ Solution

✔️ Provide diversity and unconscious bias training to the HR manager as well as employees 

✔️ Ensure inclusion policies to promote equal opportunities for all employees 

✔️ Establish a healthy communication and network among all employees from all areas

2. Payroll Management 

Small and mid-size companies also struggle with proper payroll management. But it’s more challenging for large companies with a huge number of employees. 

The payroll system includes data collecting, processing, automatically calculating, and transferring wages, benefits, and taxes. Besides, human resource managers also need to prepare reports and insights about employee compensation. 

Managing and calculating all of these activities of payroll management accurately every month for each and every employee is one of the most difficult tasks for HR management.

✅ Solution

✔️ Use advanced HR software for payroll to manage all of these automatically 

✔️ Give proper training to the HR managers to manage all payroll-related tasks accurately 

✔️ Keep up to date with payroll legislation and level up payroll communication

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3. Ensure Productivity and Feedback  

Ensuring productivity is a must for any size organization. But, for big organizations, it’s a real human resource problem. Time tracking for each task of a large number of employees, and determining whether they are consistently meeting the deadline or not are the key tasks for any HR department of the company. 

Also, providing constructive feedback is also a duty of human resource management. But, due to the lack of training and resources, sometimes HRM can’t give constructive feedback with consistent communication. That may lead lack of productivity and motivation to work in the workplace. 

To mitigate this problem, here are the possible solutions for challenges of HRM in large companies:

✅ Solutions

✔️ Use HR software to track time and monitor tasks 

✔️ Train every employee, manager, and team lead about the proper feedback process 

✔️ Maintain high levels of employee engagement through active listening, surveys, and suggestion box

Global Human Resource Management Problems and Solutions

Regardless of organization size, there are some significant global HR challenges. These are associated with attracting and retaining top talent worldwide.

Also, they are related to managing remote workplaces, and applying global compliance and regulation for employees or various regions and time zones. 

Let’s explore the global HR challenges and solutions:

Here is the breakdown of HR-related global challenges or HRM problems and solutions:

1. Remote Workforce Management 

Remote or hybrid work culture has increased due to the COVID-19 pandemic. As a result, many organizations started hiring talent within a virtual workplace. HR management has faced issues in terms of communication, employee engagement, collaboration, monitoring, and maintaining work-life balance.

To navigate these challenging circumstances, HR management needs to adopt the following solutions effectively:

✅ Solutions

✔️ Provides remote work training and resources to all employees 

✔️ Establishes proper communication channels, response times, and availability

✔️ Offers virtual team-building activities, online forums, and virtual coffee breaks

Check out 👉 How to Choose the Best HR Software – A Quick Guide

2. Talent Acquisition and Retention

Organizations are facing difficulties in attracting and retaining top talent due to changing demographics, evolving expectations, work-life balance, and many more issues. 

As the world job market is open now, shifting to a better position or company is now a common issue among employees. One more thing, the skill gap is still a great problem in the global job market.

Candidates show so many skills after doing low-quality courses and a lack of practice is mainly responsible for this crisis.

For these reasons, HR management struggles to recruit the best employees and grow their business. Here are the regarding HR challenges solutions:

✅ Solutions

✔️ Develop a strong skill evolution system to recruit the top talents

✔️ Offers competitive compensation and showcases the organization’s unique culture, growth opportunities, and commitment to employee well-being

✔️ Provide the opportunity for ongoing learning and development opportunities

3. Global Compliance and Regulation 

When an organization has both local and global employees, the HR process goes through multiple jurisdictions to apply and maintain global compliance and regulations. 

Organizations need to deal with the different labor laws, regulations, and cultures of their employees from different regions. 

Also, the human resources department has to deal with payroll systems with different currencies. 

Moreover, it’s a great challenge for HRM to ensure equal opportunities, avoid addressing biases, and create a healthy environment where all employees feel valued and respected. 

Let’s find out the solutions for these HR challenges:

✅ Solutions

✔️ Establish a global HR framework with a comprehensive understanding of local labor laws and regulations

✔️ Train HR staff with cross-cultural competency to navigate cultural differences 

✔️ Always keep up to date with the laws and changing regulations to avoid potential conflicts

Future Challenges for Human Resource Management

Along with the organizational and global challenges, each company should be ready for upcoming challenges associated with human resources. However, predicting the exact upcoming issues is difficult but not impossible.

Future human resource challenges are dependent on technological advancement, social-economical changes, and emerging trends. 

Here are 3 potential future challenges for human resource management and the possible precautions to overcome them:

1. Automation and Artificial Intelligence 

Automation or AI tools are not new in HR management, but technology matures. The increasing adoption of artificial intelligence in the workplace helps to accomplish each task from recruitment to payroll management efficiently. 

Also, enhance productivity and speed up the monitoring process. However, the advancement of AI-powered HR software or automation may lead to job displacement. So, HR managers need to keep their skill set up to date to ensure the well-being and engagement of employees. 

Here are the solutions for upcoming HR challenges:

✅ Possible Precautions 

✔️ Emphasize the importance of human skills to complement automated tasks like creativity, critical thinking, and productivity 

✔️ Take automation tools positively and focus on upskilling and reskilling employees and motivating them 

✔️ Provide necessary training and ensure a culture of continuous learning to advanced technology as a tool to enhance productivity 

2. Agile Workforce Planning 

The uncertainty caused by various incidents like global recession, war, or pandemic has made workforce management more challenging. To ensure company growth, agile workforce planning is crucial. 

This is an ongoing approach to managing work and increasing engagement through proper communication and feedback among the employees. Also, Agile workforce planning helps a company to create the right capability to rethink and transform structure to meet the business objective. 

And, for the future challenges for human resource management, companies must adopt agile methods to improve their products or service delivery with the highest flexibility to respond to changes quickly.

✅ Possible Precautions 

✔️ Provide proper training on the Agile method and how it works 

✔️ Keep practicing this ongoing approach to allow quick adjustment in response to changing market conditions 

✔️ Establish cross-functional collaboration among team members, HR, finance, and business unit 

3. Data Privacy and Cyber Security 

Among so many future challenges for human resource management, ensuring data privacy and security is one of them.

The increasing use of technology and data in human resource management raises concerns about data privacy and cyber security. It’s really alarming for any organization and also related to their ethical values. 

To ensure data privacy, HR management needs to ensure the proper security of employee data including their personal and sensitive information. 

✅ Possible Precautions 

✔️ Develop and implement strong data privacy and security policy to comply with legal and ethical standards.

✔️ Use secure, reliable tools and platforms for HRM and must check vulnerabilities before use.

✔️ Collaborate with IT and cyber security department to regularly review and update the data privacy and security policies of the company.

Bottom Line 

In summary, human resource management is a complex and ever-changing field. Here, we’ve summed up the 15 most common HR challenges and solutions in the 21st century. And, it can be found that human resource management faces various challenges in organizational, global, and future perspectives.

In that case, managing diversity and inclusion in the workforce, and adopting a dynamic and technology-based culture, HR can solve these HR problems. These solutions for HR challenges will help to build a strong organization as well as ensure company growth and innovation.