Modern organizations need to be dynamic and agile enough to pivot with the many forces pushing and pulling on them. Those that are forward-looking enough to master that skillset better equip themselves to address many challenges heading their way. With so many of those hurdles stemming from a company’s human capital in some way – talent acquisition, retention, productivity, employee engagement, and countless others – Human Resources plays a critical role in addressing these challenges.

Now that the New Year has passed and companies are looking at the road ahead, we wanted to see what issues HR professionals might encounter in 2020. To that point, we’ve identified five of the biggest challenges for HR this year, ranging from technology-based issues to recruiting and the employee experience. With enough preparation and the right insights leading the way, HR can help a company transform these potential problems into a potent competitive edge.

Talent Acquisition in a Tight Market

According to a recent survey, talent acquisition is the most pressing concern for HR leaders. That notion makes sense given the booming economy and historically low unemployment rates. However, the resulting tight labor market means organizations must devote more attention to their recruiting efforts if they want to stay competitive and attract the top talent needed to propel them forward.

The overarching challenge, however, is retaining the talent that a company already has. Granted, a consistent inflow of key talent is essential for innovation and growth, but recruiting is all for naught if an organization loses more than it gains. The same tight labor market that makes it challenging to attract talent is also driving the average employee’s willingness to test the employment waters, particularly in younger generations of employees. In fact, 60% of millennials are willing to change jobs at any given time.

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So how does an employer not only enhance its talent acquisition but boost employee retention rates as well? Developing an appealing culture and employer brand can quickly improve the employee experience, helping to drive both acquisition and retention rates. To accomplish this, HR must involve the C-suite, using a top-down strategy that creates and fosters an organizational culture and best-in-class employee experience that employees – both potential and current employees – can’t help but gravitate towards.

Creating Personalized Experiences

This particular challenge isn’t necessarily new to the HR industry. However, the biggest hurdle for creating personalized experiences for employees is catering to the unique expectations of younger generations. As we’ve discussed in the past, millennials and Gen Z have a very different perspective on what a workplace should look like, particularly regarding responsibilities and the work-life balance. A recent study even assigned a dollar amount to that notion, where the average millennial employee would give up $7,600 of salary for a better work-life balance.

To attract these younger, critical employee segments into an organization, HR and senior management should design policies and procedures that accommodate their needs and perspectives. While the best approach might differ from industry to industry or even company to company, HR departments need to make sure they have a focused mindset that allows them to tap into these gold mines of young, driven, and innovative talent. In short, when an organization tailors the employee experience to these key employee segments, their people are far more likely to view their company as a great place to work.

Catching Up with Digital Transformation

HR has traditionally lagged behind other critical business segments in technology. And while the industry has undoubtedly made significant headway in catching up, HR still runs behind in the digital transformation that is sweeping across nearly every business sector and segment. Simply put, an HR payroll system and a handful of workstations aren’t enough for a modern organization to create the personalized employee experiences and talent acquisition & retention rates needed to compete effectively.

Thankfully, HR now has a wide variety of impactful tools available, if only more companies were willing to embrace them. As it stands, 70% of HR leaders feel they need to devote more time and resources toward expanding HR’s technology and analytic skills in the next three years. From engagement survey platforms to AI-driven recruiting solutions, the puzzle pieces already exist that, collectively, can form a comprehensive strategy that can digitally transform an organization and its human capital.

However, as is always the case with any new concept or investment, digital transformation requires buy-in from senior leaders for it to take root and flourish. Therefore, HR must approach digital tools from a value-added perspective, showing the C-suite that a digitally transformed HR can become a crucial driver for both the top and bottom lines.

A digitally transformed HR can become a crucial driver for both the top and bottom lines.

For example, investing in an employee engagement survey solution allows HR to identify, analyze, and address pain points within an organization. Using the survey data to inform action plans, HR can show leadership that, if properly implemented and used, there’s a direct correlation between a survey platform and greater productivity, retention rates, and employee satisfaction.

Team Development in a Remote-Working, Mobile-Driven World

A recent study found that 70% of the global workforce already works remotely at least once a week. Suffice it to say, concepts like the gig economy, telecommuting, and contract employees have evolved well past mere trends and are now permanently ingrained in modern employment. But while many companies are testing out remote models, that doesn’t necessarily mean that they’re adequately prepared for it.

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As we move into 2020, one of HR’s biggest challenges is to establish a framework that allows an organization to take advantage of a remote working model. Telecommuting might be an extremely popular perk for the average employee – especially millennials and Gen Z – but it’s difficult to engage and create a cohesive team consisting purely of remote workers.

How do you make sure such a team works towards common goals? Are mobile technology, Slack, and similar tools enough to create and maintain the culture, engagement, and unified vision needed for success? These are the types of questions that HR leaders must answer before jumping headfirst into the remote working pool.

Harnessing the Power of AI Across the HR Function

Lastly, while AI has become a buzzword across nearly every industry and segment at this point, most organizations are still struggling to find the best ways to harness its tremendous potential. Between automation, machine learning, and natural language processing, there are several AI subsets already available to HR leaders that can streamline tasks and free valuable time.

The biggest challenge for HR regarding AI isn’t so much finding available solutions but, instead, establishing an overall strategy for the technology. What are the places and tasks within the organization that stand to benefit the most from AI? And what AI-driven tools will help HR with talent acquisition, communicating with employees, improving engagement, and the many other ways the technology provides benefit? Obviously, these factors also fit within our discussion of digital transformation but, with 80% of enterprises already investing in AI in some capacity, given the growing importance of AI across organizations, HR must be especially diligent in staying particularly informed on the technology and what it has to offer.

HR leaders have a lot on their plates. But by being proactive and anticipating potential challenges on the horizon, they can prepare their team, leaders, and organizations to clear any hurdle as long as they’re organized and deliberate with their planning.