8 Major Challenges & Critical Opportunities for HR Leaders

The Society for Human Resource Management (SHRM) is the most well-known professional association in the HR field with more than 275,000 members across the US. As the largest HR organization, SHRM is uniquely situated to provide insight into the opportunities and challenges HR executives are discussing most, and their Survey Research Center regularly conducts original research on workplace trends. One of the surveys that SHRM releases is Future HR Challenges and Talent Management Tactics. This study asks respondents to identify what they believe will be the biggest issues involving HR over the next 10 years.

1. Employee Retention – Holding on to talented staff members was the top priority for many HR managers. 59% listed this among their chief concerns, an increase of 8% from 2010’s figures. Maximizing satisfaction and engagement are critical to retaining key personnel. According to a separate survey of 6,000 HR professionals completed by SHRM in partnership with Globoforce, a vast majority (80%+) of companies are using recognition and rewards programs to show appreciation for their employees, and these organizations consistently report lower employee turnover rates.
2. Leadership Development – Investment in future leaders was nearly as big of a concern as employee retention with 52% of respondents mentioning this on their list of challenges (a significant jump from the 29% who cited this in 2010). This makes sense because often leadership development goes hand in hand with employee retention. A company’s top performers will undoubtedly rise to be its leaders one day, so supporting and betting on their success is best for everyone involved.
3. Corporate Culture – Building the right culture remained at #3, but the number of survey participants who pointed to this as one of their major priorities decreased from 44% to 36%. However, it’s important to note that many professionals see corporate culture as being inextricably linked with engaging and keeping highly talented employees. A team operates at its best when all members are on the same page and focused on the same goal. Developing a culture that generates this level of collaboration and commitment is a great way to ensure ongoing success.
4. Hiring & Recruiting – It seems finding talent has taken the back burner to retaining key players. Two entries focused on attracting workers with “remaining competitive in the talent marketplace” (34%) edging out “finding employees with specialized skills” (33%). What these two responses reveal is that, while not the number one concern, HR leaders are still very focused on expanding their rosters of employees and adding capable workers with particular areas of expertise. Broken down even further, SHRM’s survey showed what tactics employers are using to bring this talent into the fold including flexible work arrangements (40%), higher total rewards packages (26%), advancement opportunities (26%), and innovative tools/technology (17%).
5. HR Effectiveness – “Creating smooth and efficient HR processes that ensure a good employee experience” came in at 20% (a slight bump from 2010’s rate of 17%). A lot of the elements in this area comprise the key administrative functions of an HR department such as recruiting, orientation/onboarding, staff training, benefits and compensation, investigations and grievances, and annual assessments. Establishing an HR department that runs like clockwork is key to taking the next step toward becoming a true strategic partner to senior leadership. Once these core responsibilities have been solidified, the other four challenges on this list can become the HR executive’s primary focus.

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Three Bonus Challenges: Every two years, the World Federation of People Management Associations (WFPMA), in partnership with The Boston Consulting Group (BCG), conducts a thorough survey called “Creating People Advantage.” The results for 2012 were just as interesting and informative as SHRM’s research into the challenges HR leaders see on the horizon. The 4,000+ HR executives from more than 100 countries surveyed by WFPMA and BCG mentioned a few of the same concerns as the SHRM group, but it’s worth mentioning some of the others that weren’t covered by SHRM.

6. Performance Management – Improving the ability to assess employee performance will always be a crucial function of HR. More than 80% of respondents classified their performance management system as being partially or fully standardized, however, they still listed this element as a secondary concern overall, which creates the perception that many HR departments have systems in place that they feel could be improved upon. Similarly, BCG and WFPMA found that a transparent assessment process was a critical component of high-performing companies with these entities employing clear norms that drive performance 2.6x more often and implementing global standards 2.2x more often. Systems that are overly complicated hamper employee engagement, and high-performing companies are shown to rely on technology to gauge results and contributions while avoiding the bureaucracy that can hinder the performance management process.
7. Change Management – 53% of survey participants in North America described their companies as undergoing “transformation,” making change management a key role in many HR departments. Furthermore, only 15% stated that their organizations had a standardized change management process, an alarmingly low number considering the authors of the study make the point that “global standardization is considered the most effective approach.”
8. Strategic Workforce Planning & Employer Branding – Although these topics are separate ideas, they were linked over and over again throughout the results of this survey. When reviewed alongside low-performing companies, high achievers were found more likely to implement long-term forecasting (3.3x), have an established process for refining the employer brand (2.8x), provide transparency for capacity gaps (2.4x), regard social media as a valuable recruiting channel (1.4x), and consider the company’s website as a recruiting tool (1.3x).