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Top 10 HR issues and how to manage them

08 February 2017

     

Anyone who is responsible for HR within an organisation has a lot on their hands. It’s a challenging function to run and it has its problems. Here – in no particular order – is a run-down of the top 10 HR issues facing HR in the UK and how you can manage them.

1. Attracting talent

When staff leave, or if your company is growing, you need to attract and employ the right talent. Finding the right applicants in the first place is often one of the hardest of all HR tasks. You want staff with the right skills for the role and character traits that match the company culture.

If you need to preserve your advertising budget, then there are free promotional options that you may not have considered. For instance, you can ask your marketing people to add your vacancies to the company website and promote them via social media. You can publicise roles internally – and reward staff if they successfully introduce someone to the company. And you can use free and lower-cost advertising options, such as the government’s Universal Jobmatch or Jobcentre Plus services, online jobs boards and LinkedIn.

For niche or specialist roles, you may still have to use a recruitment agency or advertise in an industry magazine. Both these options cost more, but will reach your target market more effectively.

2. Recruitment processes

When you’re recruiting, keeping on top of the various job specifications and the incoming CVs, and then running the recruitment process itself all needs careful management.

Make sure you set up systems to efficiently track CVs, rejections and interview offers and appointments.  For companies under about 100 employees, a simple spreadsheet system will probably suffice, as long as you keep the information updated so you can tell at a glance at which stage each applicant is in the recruitment process. Here's a simple guide on how you can recruit the right candidate for your small business

3. Retaining talent

Once you’ve spent money and energy employing the right people, you then need to make sure they stay. A good turnover rate is generally accepted as being anything below 15% a year. It does vary according to industry, with retail and hospitality being notoriously high. But regardless of your industry, the lower your turnover rate, the better. High turnover rates mean you have to spend more on recruitment and you experience higher costs associated with management and HR time spent on hiring and interviewing replacement candidates.

Staff retention hinges on careful balancing issues that affect employee retention: remuneration, benefits, workload, working environment, company culture, management style, internal communications, promotional prospects and personal development. Each employee is affected by these in varying degrees, but you can assess what weight each carries by conducting exit interviews. These can determine the factors that lead staff to resign, and if you spot patterns, then you can take measures to address them. 

4. Day to day HR admin

You need to supervise all sorts of admin in your HR role: noting absences, approving annual leave, calculating holiday pay, arranging appraisals, planning and logging personal development plans and individual performance targets, and managing expenses. It’s a full-time job, and one you perhaps take on in addition to other office management tasks. 

The best approach if you’re struggling with this as one of your HR issues is to manage these sorts of tasks using HR software. Some systems even allow employees to manage their own HR themselves, such as booking leave and logging sick days. And there are also great value, cloud-based options that only charge you according to the number of employees you have.

5. Budget constraints

Worries over Brexit combined with economic uncertainty since the 2008-09 recession have meant budgets across the board have been hit. If you have limited funds for recruitment, training and personal development, you may need to get a bit creative. 

Negotiate prices with training organisations or search for freelancers who can come to your premises and train a whole team. Or use the free and low-cost recruitment options discussed above. Failing that, you’ll have to develop some super budgetary and financial management skills to make your budget stretches that bit further.

6. HR knowledge

As the HR person for your company, it is vital you stay well informed about HR issues and legislation. 

As a case in point, new regulations this year are expected that will bring about mandatory gender pay gap reporting for companies with more than 250 employees. While that may not affect your company, laws affecting employment change fairly frequently, so it’s not sufficient for you to rely on knowledge you gained several years ago.

To make sure you keep up with the latest advice and legislation, read and subscribe to HR blogs and magazines, and sign up for newsletters from organisations such as ACAS. You should also make use of the “working, jobs and pensions” section, which is an excellent resource on the government website.

7. Performance management

Performance management is one of the most complex of HR issues. It measures the efficacy of employees and, when directed well, ensures that the business operates effectively.

The best way to ensure effective performance management is to align it with your business strategy. The leadership should set business targets and then cascade those down through the organisation so that each employee has targets that will contribute to the overall success of the business.

8. Payroll

In your role, you act as the liaison with the accounts department to ensure that salary payments are accurate. You’re responsible for adding new employees, making salary changes, and informing about bonuses, pension deductions and sick pay.

If much of your role is taken up with manual changes and instructions, software is another great help here. Many online HR systems will easily export the latest employee changes into your payroll system, so that the process is faster and more automated. 

9. Remuneration and benefits

Over the past few years, new benefits have surfaced in companies. Many companies now offer free fruit and books, and we’ve all seen those amazing offices kitted out with slides, ball pits and massage chairs. Because of this, expectations amongst employees have gradually been shifting. Staff joining you from a start-up tech company or a well-funded new business, for example, might be very used to such benefits. In turn, they look for similar perks and entitlements from their next employer. 

To address this area, you should review your benefits package. You might choose at the same time to examine your pay. Are you paying market rate, or lower? Are there opportunities to align your benefits package with what your competitors offer?

10. Measuring HR effectiveness

It’s imperative that you have systems in place that measure how well you are doing. After all, HR isn’t just an admin function; it is also a strategic tool that contributes to the overall efficiency of the company.

Aim to develop and implement reporting capabilities that give you great data and strong analytics. Creating data-driven HR practices will inform your decision-making process and demonstrate the return on investment that HR expenditure provides. 

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