It can seem like the responsibilities of human resources (HR) teams grow by the day. They must manage the entire employee life cycle, from attracting the best candidates to conducting exit interviews, all while building an attractive corporate culture and ensuring employee compensation and benefits are competitive.
More recent hurdles include managing a remote/hybrid workforce, tackling new technology (read: artificial intelligence) and the ongoing talent shortage. So how can HR leaders tackle these challenges?
What Are the Most Challenging Issues Facing Human Resources Today?
The volume and nature of the challenges HR professionals face continue to increase and change. As businesses put more of a premium on overall employee happiness and creating a better employee experience for their hybrid workforce, much of the work falls on HR. Major challenges range from recruiting and hiring strong candidates to developing leaders and building an effective corporate culture as an increasing number of employees continue to work remotely. Focusing on employees’ health and well-being and fostering an inclusive, diverse and equitable workplace are also key priorities.
The Top 18 HR Challenges of Today
HR professionals can employ their experience, skills and technology to address most of the following challenges to drive greater employee engagement, development, satisfaction and improved performance.
Culture
Multiple studies show that employees believe company culture matters more to their job satisfaction than higher salaries. According to MIT Sloan, for example, a toxic corporate culture is more than 10 times more powerful than compensation in predicting a company’s attrition rate. In fact, of all topics assessed that predicted turnover, including job instability and a poor response to COVID-19, ranked 16th.
Speaking of the pandemic, the shift to remote and hybrid workforces has brought about new culture challenges. They include employees’ feeling isolated and/or detached from the organization, reduced collaboration and even resentment from those whose jobs require them to be in the office. In the end, business can suffer.
However, there are many ways HR can foster a positive organizational culture, no matter where their employees are located. A few ideas include encouraging two-way communication between employees and management, making sure employees understand how their work contributes to the business’s objectives, having executives reach out to individuals for exemplary work, hosting companywide volunteer days and offering fitness center stipends.
Compliance
Regulatory compliance has always been critical for HR, but it has become more complex. As more employees work remotely, maintaining data security regulations has taken on greater urgency. HR teams will need to work closely with internal IT and security teams or outside experts to complete a risk management assessment and ensure company data is still private and secure with remote access.
Additionally, ensuring compliance with overtime and other labor regulations can be more difficult when employees are not in the office. The Employment Law Guide from the Department of Labor can answer common questions and help you remain compliant. Employers whose workers have remained on the job or will be returning to the workplace need to also ensure in-office safety following natural disasters and public health crises.
HR needs to understand the regulations and send out regular communication to employees with the latest information. They may also want to conduct training sessions and develop materials to foster a culture of compliance.
Artificial Intelligence (AI)
AI is making its way through all corners of organizations and industries, automating a multitude of core business processes so that employees can focus on more strategic, interesting and innovative work that drives real business value. The AI challenge for HR leaders lies in resistance. The good news, according to Paychex data, is that 98% of U.S. business and HR leaders are expected to use AI in 2024. For HR teams, AI can help reduce their administrative burden, for which they spend more than 25% of the average work week, Paychex reports. Among their high-level priorities: improving employee career planning and skill-building (54%), evolving benefits to attract and keep high-quality employees (53%) and improving employee recruiting and retention (50%).
Leadership Development
To paraphrase football coach Vince Lombardi, for whom the Super Bowl trophy is named, some leaders are born, while others are made through hard work. To be sure, ongoing effective leadership development can have a profound, positive impact on every aspect of company performance, driving productivity, revenue and profitability; customer and employee engagement, satisfaction, acquisition and retention; executive alignment; brand reputation; and more.
That said, 77% of American adults believe corporate America is experiencing a “leadership crisis,” according to a November 2023 survey by U.S. News and The Harris Poll. And in anything but a ringing endorsement for their own organizations, 56% said their managers are “worse” now than they were before the pandemic.
Much can be done to improve the situation, including more widespread implementation of leadership development programs that reflect a modern skill set, such as the ability to lead a remote workforce. Encouraging leaders to share responsibilities with other leaders who have complementary skill sets — what Gartner terms “complementary leadership” — is another tactic.
Work-Life Balance
The pandemic brought far greater emphasis to employees’ work-life balance, and that won’t go away anytime soon. Just over two-thirds of companies now provide flexible work schedules.
Revising your policies can help employees better manage work and their daily lives. They can include a focus on productivity rather than hours clocked and regular reviews of workloads to ensure they remain reasonable. In addition, encouraging employees to actually use their vacation time helps counter any unspoken perceptions that working long hours is expected or rewarded.
Health and Wellness
The importance of employees’ health and well-being cannot be overstated, from both a human perspective and that of the business, which might experience bottom-line repercussions due to workers not performing at their best. However, less than one-quarter of workers strongly believe their companies care, according to Gallup.
Many of the tactics that help employees balance their work and personal lives can, not surprisingly, foster physical and mental well-being as well. They include flexible working hours and the ability to work remotely, at least part of the time. For employees working on-site, offering standing desks, holding “walking meetings” and providing healthy snacks can boost wellness at a relatively low cost.
Cross-Generational Team Building
Today’s workforce often encompasses multiple generations. The upside? Organizations gain a broader range of ideas for solving problems. However, different age groups can vary in their approaches to technology, how they interact with others and their work-life balance. These differences can lead to ineffective communication and collaboration.
HR can take several steps to prevent generational miscues. One is to avoid stereotyping. Not every older employee resists technology and not every millennial is demanding of their employer. Another is using a range of communication tools, such as, email, text, and phone calls, to reach employees through they’re preferred channels.
Finally, teams should be structured to include employees from various age groups to foster and encourage diversity in thinking and task execution.
Change Management
Change is not only hard, but it’s also exhausting, especially for workers who have been through multiple disruptions. The numbers bear that out: In 2022, only 38% of employees were willing to support organizational change, down from 74% in 2016, according to Gartner.
Traditional top-down change management is part of the problem, Gartner said. Another common reason is outdated work design. To address this, jobs need to be designed to fit the way in which work actually happens. Cumbersome approval processes also need to be streamlined to adapt to a company’s current needs. Technology plays a central role here and can make your employees’ jobs much easier.
By working with other departments, HR can foster a culture that helps employees embrace change. Among other actions, this requires including employees in decision-making and communicating the rationale behind changes.
Training and Development
The number of skills required for any job continues to increase. HR can work with others in their organization to identify skills gaps and help employees develop the skills needed for current and future roles.
One trend is upskilling, or improving current employees’ skill sets, so they can assume different roles. Upskilling enables organizations to meet evolving needs while also keeping current employees engaged; the proliferation of quality online courses allows for cost-effective training. Encouragingly, 71% of workers surveyed by Amazon and Gallup said they are very or extremely interested in upgrading their skills through training. A separate survey from KPMG pinpointed AI as an area where training efforts could be better.
Compensation
Despite a tight labor market and pay freezes among some well-known companies, employee compensation is on the rise, as reports from The Conference Board, Willis Towers Watson (WTW) and Robert Half show. In some ways that’s no surprise, as companies seek to attract and retain workers amid inflated prices, the Great Resignation and employees’ continued willingness to leave their employers for better-paying jobs. The challenges for HR teams and businesses overall will be one of cost management, transparency and fair pay, according to WTW
In the absence of salary increases, HR professionals can find other ways to motivate workers, such as accommodating requests for flexibility and remote work, offering training and providing development opportunities. Also, expect a continued focus on initiatives to close gaps in compensation among employees of different genders or races, as well as greater use of variable pay tied to performance.
Benefits
Consumers aren’t the only ones dealing with rising healthcare costs. In the U.S., employer healthcare costs are predicted to increase 8.5% in 2024, according to Aon, a professional services firm. Still, organizations must continue to do all they can to ensure the perks they offer — including healthcare, dental and life insurance, retirement plans, maternity/paternity leave, short-term disability insurance and more — are competitive. At that same time, however, they must manage their own costs.
Other tools that fall into the benefits bucket at companies of all sizes (and can help reduce overall healthcare costs) include corporate wellness and employee-assistant programs, telemedicine, chronic condition and prescription drug management, and health savings accounts.
Recruitment
As companies eye continued growth, an effective recruiting strategy is imperative. One step is meeting potential candidates where they are. This requires recruiting using multiple social media and job posting sites and holding remote interviews via video conferencing applications.
HR teams also need to present a consistent and compelling message. A range of communication tools, including a quality human resource management system (HRMS), scan help. An HRMS can automatically post your open positions to job boards, manage resumes and track applicants.
Talent Acquisition
Whereas recruitment involves actively filling open positions, talent acquisition is an ongoing, proactive strategy that plans for future staffing requirements. Perhaps the biggest challenge in HR leaders’ ability to do so is the ongoing global talent shortage, which Korn Ferry estimates will top 85 million people by 2030 and leave as much as $8.5 trillion in unrealized annual revenue. This helps underscore why building and staying in touch with a qualified talent pool that could one day fill open positions is important. As noted above, HR software that stores candidate data and can predict staffing needs is also imperative.
Retention
Staffers are spending less time at companies than ever before. At any time, nearly three-quarters of employees are open to new opportunities, 29% are actively looking to change jobs within the next six to 12 months and 20% occasionally browse around in case a position catches their eye, according to Indeed’s “2024 Workforce Insights Report.”
To improve employee retention, most organizations need to boost employee engagement. The top drivers are typically opportunities for learning and development, a clear link between employees’ work and the company’s strategic objectives and recognition for exceptional work. All of these can be accomplished at a modest cost.
Data Security
A whopping 95% of organizations experienced at least one data breach in 2023, at an average — and record-breaking — cost of $4.45 million per incident, according to IBM’s “2023 Cost of a Data Breach Report.” Segmented by head count, organizations with 5,000 or fewer employees were the ones to bear the increased costs. And the most costly compromises were that of employees and customers’ personally identifiable information.
To reduce the risks and costs of cyberattacks, organizations need to identify the operations and assets most vulnerable to attacks, and focus on making them more secure. The HR team might also work with IT to develop clear data security standards and rules, and could lead a training about how these standards affect employees and the importance of them.
An HRMS or human capital management (HCM) solution can boost cybersecurity by limiting access to those in certain roles and requiring two-factor authentication.
Diversity, Equity and Inclusion (DEI)
Three-quarters of 1,200 HR decision-makers said their companies will place more emphasis on diversity hiring in 2024, according to Jobvite’s “2023 Employ Recruiter Nation Report.” Top areas of concentration include race/ethnicity (47%), gender (44%), age (36%) and LGBTQ+ (26%).
Organizations understand that diversity and inclusion aren’t simply feel-good initiatives; they help boost organizational performance. Companies in the top quartile for racial and ethnic diversity are 39% more likely to financially outperform their bottom-quartile industry peers, according to consulting firm McKinsey. Diverse firms more closely represent the changing population. And a mix of diverse employees can draw from a wider range of experiences, leading to more informed decision-making.
To boost diversity and inclusion, organizations should communicate to current employees the importance and benefits of any diversity initiatives and focus on diversity in the recruiting process, among other steps.
Employee Experience
A positive employee experience—which refers to the employee’s perspective of his or her interactions with the organization—can drive engagement. Higher engagement can boost productivity, sales, and other performance metrics.
Organizations can improve the employee experience by soliciting and listening to feedback and investing in employees’ career development. A strong culture goes a long way toward improving the employee experience, as well.
Conflict Resolution
Chalk it up to human nature, but where there are people there is conflict. Disagreements at work run the gamut, whether about business-related issues like strategic priorities and project goals or no-longer-taboo external topics, such as political and geopolitical unrest. Personality clashes are also a reality. Fifty-seven percent of managers say they’re responsible for managing workplace conflicts — a challenge that requires specialized training, according to Gartner, which also suggests coaching new managers and recognizing/rewarding managers for resolving conflicts effectively.
Onboarding
Organizations with more mature onboarding processes see improved new hire engagement and retention, among other benefits.
A few steps can help employees feel welcome and prepared, even when they onboard virtually. One is simply welcoming them with a personalized message. Another is ensuring they have the proper equipment and technology to perform their jobs effectively. Finally, company swag, such as a company sweatshirt or name-brand water bottle, can help new employees feel like they’re part of the team, even when they’re working remotely. HR software can also help you organize and improve the employee onboarding process.
Managing Remote Workers
In 2023, approximately 20% of the U.S. workforce maintained a hybrid or fully remote schedule, according to the Census Bureau. While reports conflict on whether employees who work offsite are more or less productive than when they’re in the office, there’s no dispute that managing remote workers brings challenges — including tracking their productivity. In addition, the lack of face-to-face interaction can lead to misunderstandings, employees may spend more time hunting for tools or information that were previously easily accessible, and company culture (referenced earlier) could suffer.
HR teams can take several steps to help manage remote workers. These include scheduling regular check-ins with employees and using multiple communication methods, such as email, instant messaging, phone and video, for meetings. Additionally, leaders who communicate a belief that the organization and its employees will get through difficult times together can help calm fears and instill confidence.
Measuring HR Effectiveness
HR professionals especially need to ensure they’re adding value to the organization, and one way they can do that is by tracking key workforce trends and KPIs.
A starting point is monitoring HR metrics, like absenteeism, recruiting conversion rate, employee turnover and employee satisfaction. HR departments need to establish the KPIs that are best suited to their business, gather those metrics and compare them against industry benchmarks and the company’s past performance.
Overcoming HR Challenges With Software
As human resource professionals strive to meet the challenges confronting them, technology can support their efforts. Human resources software can help engage candidates and employees, safeguard data and systems and develop leaders. It can also streamline employee onboarding and help monitor and excel employee performance management. Ultimately, software can mitigate many of the issues HR leaders face and give them a more powerful voice within the business.
By leveraging their experience, skills, and technology, HR professionals can meet the challenges that linger ahead. In doing so, they can drive greater employee engagement, development, satisfaction, and improved performance.
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HR Challenges FAQs
What are the biggest challenges for HR roles in 2025?
HR leaders and teams face numerous challenges. Among the biggest in 2025 are the ongoing talent shortage; managing increasing costs, including worker salaries and healthcare insurance; staff retention; and managing a remote workforce.
What is an example of a difficult situation in HR?
Some of the more common situations include managing workplace conflicts amongst employees and harassment claims and handling voluntary and involuntary terminations or layoffs, but HR professionals also need to deal with broader challenges such as helping to establish the company culture and limit toxic workplaces and implementing or maintaining diversity, equity, and inclusion (DEI) programs.
How to handle HR issues at work?
Though it depends upon the actual situation, there are some best practices for handling HR issues amongst employees, such as: carefully listening to the employee and documenting their issue thoroughly, guarantee and ensure confidentiality, gather third-party evidence and the experience of other people involved, and communicate the action that you take.
