Top 10 Most Common Human Resource Challenges along with Solutions

Top 10 Most Common Human Resource Challenges along with Solutions

Here are 10 of today’s most common human resource challenges along with solutions you can quickly implement in your business.

#1 Compliance with Laws and Regulation

Keeping up with changing employment laws is a struggle for business owners. Many choose to ignore employment laws, believing they don’t apply to their business. But doing so could mean audits, lawsuits, and possibly even the closure of your company.


No matter how large or small your business, it’s important to make sure you’re in compliance with local, state, and federal labor laws. There are regulations on everything from hiring practices, to wage payment, to workplace safety.

#2 Management Changes

As a business grows, its strategies, structure, and internal processes grow with it. Some employees have a hard time coping with these changes. A lot of companies experience decreased productivity and morale during periods of change.


Business owners should focus on communicating the benefits of the change for everyone. Regular staff meetings are a good place to start. When your team understands the why, how, and when of the change, they’ll be more likely to get on board.

#3 Leadership Development

A recent study showed more than a third of companies are doing an average job, at best, at implementing leadership development programs. A third of companies admitted that their leadership development practices are below average.


Leadership development is critical in keeping your management team engaged and motivated and prepares them to take on more responsibilities in the future. Make it part of the culture. Create opportunities for them to use their strengths every day. Accomplishing goals will motivate them and give them a chance to develop their skills.

#4 Workforce Training and Development

Investing in the training and development of lower-level employees is another common HR problem. Some businesses have trouble finding the resources to do so. Employees on the front lines are some of your hardest workers and may not have the time to take a training course.


Training and development doesn’t have to take a lot of time or money. Recruit managers and senior leadership in mentoring their subordinate employees. You could also provide online training courses so people can go at their own pace.

#5 Adapting to Innovation

Technology is constantly changing. Businesses must be quick to adapt, or risk being left behind by their competitors. The challenge for small business owners is getting employees to embrace innovation and constantly learn new technology.


Communication is critical. With any change, make sure your team understands the why, when, and how. Set clear goals for the adoption of initiatives and provide employees with the training they need to get comfortable with it.

#6 Compensation

Many companies are struggling with how best to structure employee compensation. Small businesses have to compete not only with businesses of a similar size, but also with corporations with big payroll budgets. Plus, you have to factor in the cost of benefits, training, taxes, and other expenses, which can range from 1.5 to 3 times the employee’s salary.


Even though salary is important, it isn’t always the most important factor for job candidates. Creating a system to reward employees for excellent performance is one way to make up for a lower salary. In addition, consider offering incentive programs such as profit sharing or bonuses, which can be a win-win for the employee and the company.

#7 Understanding Benefits Packages

Employee Health Insurance has been a pain point for many small businesses in the past few years. Rising healthcare costs mean companies must either pass these costs on to employees or take a hit to their bottom line. Since good benefits packages can be a deciding factor for potential hires, understanding them is key.


For small business with fewer than 50 employees, there are many options for offering healthcare benefits. One option is purchasing a plan through the Small Business Health Options Program (SHOP) marketplace. Doing this gives you the opportunity to take a tax credit, which can help offset some costs.

And don’t forget about benefits such as:
  • Unlimited vacation time
  • Flex time
  • Free snacks
  • Wellness programs
  • Commuter benefits

These benefits are affordable ways to offer extra perks—and they’re extremely popular with today’s workforce!

#8 Recruiting Talented Employees

Attracting talent is a huge investment of time and money. It’s difficult for entrepreneurs to balance between keeping a business running and hiring the right people at the right time. In addition, it’s impossible to know whether a candidate will actually be a good fit until they’ve worked for you for a period of time.


One of the best ways to find the right people for your business is to use a staffing company. They provide temp-to-hire solutions that allow you to try out new employees with little to no risk. You’ll save time, money, and frustration, and maybe even find a future executive or business partner.

#9 Retaining Talented Employees

Competition for talented employees is fierce. Startups and small companies don’t have big budgets for retirement plans, expensive insurance plans, and other costly items that their larger competitors do—at least, not yet. Employee turnover is expensive and can negatively impact business growth.


Onboarding is highly effective for employee. Research shows having a structured onboarding process means employees are 58 percent more likely to stay with a company for three years or more.

#10 Workplace Diversity

Multiple generations. Ethnic and cultural differences. These are just a few of the many factors that make workplace diversity a continual challenge for small businesses. The risk of lawsuits for failing to protect employees from harassment is real.


Creating a culture of teamwork and respect will keep the work environment positive and productive. In addition, implementing a diversity training program is a must. Employers are responsible for setting standards of behavior in the workplace. Standards and a system of accountability should be set up early on.

Some of the major challenges faced by human resource managers are as follows:

1. Recruitment and Selection:

Finding a suitable candidate for the job from a large number of applicants is a basic problem for the human resource manager. They have to make suitable changes from time to time in the selection pro­cedure and see to it that the candidate is up to the mark fulfilling the job requirements. If required, the candidate should be provided with training to get quality results.

2. Emotional and Physical Stability of Employees:

Providing with wages and salaries to employees is not sufficient in today’s world. The human resource manager should maintain proper emotional balance of employees. They should try to understand the attitude, requirements and feelings of employees, and motivate them whenever and wherever required.

3. Balance Between Management and Employees:

The human resource manager has a responsibility to balance the interest of management and employ­ees. Profits, commitment, cooperation, loyalty, and sincerely are the factors expected by management, whereas better salaries and wages, safety and security, healthy working conditions, career development, and participative working are the factors expected by employees from management.

4. Training, Development and Compensation:

A planned execution of training programmes and managerial development programmes is required to be undertaken to sharpen and enhance the skills, and to develop knowledge of employees. Compensation in the form of salary, bonus, allowances, incentives and perquisites is to be paid according to the performance of people. A word or letter of appreciation is also to be given, if some of them have done their jobs beyond expectations to keep their morale up.

5. Performance Appraisal:

This activity should not be considered a routine process by the human resource manager. If employees are not getting proper feedback from them, it may affect their future work. A scientific appraisal tech­nique according to changing needs should be applied and the quality of it should be checked from time to time.

6. Dealing with Trade Union:

Union members are to be handled skillfully as they are usually the people who oppose the company policies and procedures. Demands of the union and interests of the management should be matched properly.

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