Issues such as cash flow, competition, and revenue growth are top of mind for small business owners and their teams. Along with these challenges comes another area many companies struggle with: human resource management.
Human resource management (HRM) includes:
- Job design and analysis
- Workforce planning
- Training and development
- Performance management
- Compensation and benefits
- Legal issues
HRM can be a challenge for small businesses especially, which typically don’t have an HR department to rely on. They may be limited to one HR person, or this responsibility may still belong to the CEO. Regardless, small business owners need to understand the challenges facing them so they’re prepared to tackle HR issues as their company, and workforce, grows.
Here are 10 of today’s most common human resource challenges towards organizational effectiveness.
1. Compliance with Laws and Regulation
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 demise of your company.
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.
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. Thirty-six percent of companies surveyed in Brandon Hall Group’s State of Leadership Development Study admitted that their leadership development practices are below average.
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.
5. Adapting to Innovation
Technology is constantly changing. Businesses must be quick to adapt, or risk being left in the dust by their competitors. The challenge for small business owners is getting employees to embrace innovation and learn new technology.
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.
7. Understanding Benefits Packages
The Affordable Care Act 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.
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.
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.
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.
Reference List
1.
Villanovau.com. (n.d.). Human Resource Management Challenges.
[online] Available at: https://www.villanovau.com/resources/hr/human-resource-management-challenges/#.WxMNvO6FPIU
[Accessed 2 Jun. 2018].
2.
Schramm, J. (2016). The Big Issues Facing HR. [online] SHRM.
Available at:
https://www.shrm.org/hr-today/news/hr-magazine/0316/pages/the-big-issues-facing-hr.aspx
[Accessed 2 Jun. 2018].
3. Monash Business
School (2016). Issues in HR: The challenges for employing organisations.
[video] Available at: https://www.youtube.com/watch?v=VW5wp3KgEoY [Accessed 2
Jun. 2018].
As a one challenge that HR manger faces it has mentioned that training and development of employees, and it has mentioned finding resources are also a challenge, for that I suggest Train the trainer program where you can give one particular team or managers to get the particular training rather than gathering all staff and let them (trained managers) to train their relevant staff by them selves. so that we can save money, time and use our own resource with a minimum cost. what do you think about this concept?
ReplyDeleteIts convenient. But I think that concept couldn't be applied for every situation. I think it depends on the company, domain and the industry. For example assume its an IT company and intern came to the new project and he requires some training sessions, Due to that situation those trainings couldn't be done by someone who works for an another project or someone who works outside the project. Because that someone does't have the domain knowledge of the mentioned project. That intern might be expert in the technical side and he might have some set of skills but he does't know anything on the domain. So the trainer ought to be someone who knows that domain well and someone inside the project. Thus I think your concept is convenient but not for every occasion.
DeleteRewarding, workplace diversity, employee retention these all are back breaking tasks that the HR has to put up with every day. So as all these activities lead to affect the organization's effectiveness. More importantly the every changing and the challenging innovation and technology factors. My concerning problem is how can companies in developing countries counter when MNCs start to bark in with stable grounds in all these areas.
ReplyDeleteYes RD, it's kind of most trending and prevalent issue that occurred to the companies in developing countries. I think they should be more strategical and bold when they compete or deal with that kind of MNCs. Hope my next article on "Human Resource Management Strategies To Improve Organizational Effectiveness" will answer your question in brief.
DeleteWonderful ideas! However, As I think“HR’s biggest challenge right now is creating processes that meet immediate needs but also align with strategic organizational goals. So, for instance, a common organizational goal is long term employee engagement in a organization.
ReplyDeleteAgreed with your point Lasantha. One of the most challenging issue for the HRM is employee retention, Losing key employees can limit productivity of the organization and damage morale of the team. Thus the long term employee engagement would be one of the most crucial organizational objective.
DeleteVery deeply described .My question is why most of the organizations reluctant to retain key talents and staff turn over is very high.I feel most of the HR Managers do not have in depth idea in this regard.
ReplyDeleteI believe all HR managers must have the knowledge of working environment
(HR Managers need to come through the respective fields and then only they can understand the ground reality.)Other wise we can not expect ''EMPATHY ''
Indeed Pulasthi ! Incompetence of retain key talents within the organization is one of the major drawbacks and the worst mistake made by the HRM. As per my perspective and personal experiences, the reason for that mentioned issue is simply, HR people of few companies seems like arrogant and overconfidence. They think they can replace that key person with someone else without confusion. They don't feel the value of that key employee since they don't have even a petite knowledge on the domain or the product that the company delivers. Thumbs up for the phrase "HR Managers need to come through the respective fields and then only they can understand the ground reality."
DeleteCreating 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.
ReplyDeleteAgreed with your point Lakmini. Diversity training programs are must for the globalized business. Employees are likely to be more efficient in their positions if they are able to communicate effectively with team members with similar and different backgrounds. Diversity training programs provide employees a space to feel valued as individuals. Moreover, these training will offer strategies for building trust and cohesion among team members in the workplace.
Delete