The 5 Biggest Challenges In HR Management

The 5 Biggest Challenges In HR Management

Look into the biggest challenges facing corporate and Human Resources leaders today and you’ll realise that the more things change, the more they stay the same.

In recent years, the world has faced many challenges such as economic upheaval in the EU, corporate data breaches, Brexit, possible trade wars, the rise of artificial intelligence (AI), and more.

All of these issues could prove unsettling to workforces around the world but they all still tend to fall into some old familiar HR challenges that have been faced by businesses for decades.

These familiar challenges were identified by PricewaterhouseCoopers in a large-scale survey conducted for the World Federation of Personnel Management Associations. They were 1. Change management, 2. Leadership development, 3. HR effectiveness measurement, 4. Organizational effectiveness, 5. (Equal Place) Compensation, and Staffing.

Let’s take a quick look at each of the top five HR challenges:

1. Change Management

It comes as no surprise that Change Management topped the list as the biggest HR challenge facing businesses around the world.

When dealing with complex issues such as Brexit, AI, trade wars, and more, companies that have change management within their operational DNA will be far more likely to succeed.

Being successful at change management involves a number of recurring elements: a strong guiding vision, a committed lead team to steer the process, ongoing communication (to the point of over-communicating), and continual review of processes to ensure streamlined operations.


Communication is key as it allows the business to maintain positive momentum through a period of stress and change. However, communication is more than just a ‘town hall’ meeting and a few follow-up emails, it is an ongoing two-way flow of information and discussion that more resembles collaboration than the usual one-way corporate announcements.

Beyond ongoing communication, successful change managers naturally build improvement reviews into their change programs. The Six Sigma DMAIC steps can be helpful if you are leading a change process. The steps will allow you to identify the current and future states and to then set out a plan to bridge the gap. The steps naturally lead you towards identifying bottlenecks and finding ways to streamline business activities.

2. Leadership Development

Another long-term item on the HR challenge list is leadership development. No business can develop its long-term vision and plan and then put it into action to great success without highly effective leaders.

The corporate scandals of the early 2000s with companies such as Enron and WorldCom collapsing are often held up to be examples of the old proverb in play: ‘The fish rots from the head‘.

In contrast, brands such as Virgin and Starbucks have faced down many challenges both through having charismatic leaders at the top but also by having highly effective leaders throughout the business.



3. HR Effectiveness Measurement

Every business function must demonstrate the return on investment it brings and HR is no different.

The increasing sophistication of HR information systems has made this task easier. These days, software can instantly report on headcount, employee expenses, hiring pipeline numbers, and even employee morale at any given hour of the day.

We predict that this particular HR challenge will slide down the rankings of HR challenges over time but it will still remain for Human Resources leaders to actually produce the desired results.

4. Organisational Effectiveness

With the rapid rise of the B2B SaaS industry, achieving optimal organisational effectiveness should become easier in the coming years.

Of course, that’s the theory. The reality is that an organisation’s performance is still heavily determined by the top two challenges we looked at earlier: Change Management and Leadership.

The wide range of B2B software makes it easier to have real-time data on all areas from business planning, HR, sales, operating costs, right through to customer satisfaction.

Identifying the improvement opportunities and then taking advantage of those opportunities comes down to the leadership and culture of innovation within the business.

5. (Equal Place) Compensation & Staffing

Closely linked, Compensation and Staffing were the final top HR challenges and they too are changing rapidly in this brave new SaaS world.

Live performance results, real-time access to pay benchmarking data, and fully trackable talent pipeline numbers are all examples of what is possible for HR leaders as they face these key challenges.

Top 5 HR Challenges – The Final Takeaway

If you’re working hard to improve the performance of your business whilst facing any of the biggest HR challenges, here’s our recommendation: do whatever you can to strengthen your company in the areas of Change management and Leadership. This will enable your organisation to then leverage the rise of powerful new SaaS technologies that will significantly boost your company’s performance.