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 the workforce grows.
Here are 10 of today’s most common human resource challenges:-
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.
Many companies are struggling with how best to structure employee compensation. Small businesses have to compete not only with activities 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. Also, it’s impossible to know whether a candidate will be a good fit until they’ve worked for you for a period.
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.
So here are the common HR Challenges where every HR faced in today's Times