Top Human Resource (HR) Challenges -2021
The new normal has forced us to shift beliefs, behaviors, and the way we will work in the times to come. The experiences from the pandemic are already changing how we work, including a greater emphasis on remote working, digital collaboration, employee engagement, mental health, and workplace hygiene amongst others.
The year 2020 has hit us very hard disrupting almost all walks of life. In organizations, HR teams have been at the frontline, quickly providing employees with the organization’s response to the pandemic. HR will now need to look ahead and make changes to policies, structures, and practices to align with the new way of working. For HR managers, this is a time to play a defining role in shaping the future of organizations in the years to come.
The immediate challenges and, therefore, priorities in the year 2021 can broadly be segmented into the following areas.
Mental Well-Being
Making sure the mental well-being of the people, these are the most uncertain and unprecedented times. How the HR Managers can play a role in reassuring the employees amongst all this blood bath of job losses, pay cuts, moments of anxiety is going to a real test. All this has to be done while keeping the ground realities in mind as the economic situation continues to be volatile and unpredictable.
Stress, anxiety, and other mental health issues have always been there, and it is no new story. Organizations have always been initiating wellness programs and providing employees with security, health benefits, and flexibility to help them overcome these issues. But the sudden COVID-19 outbreak has brought the employees’ mental problems in the front seat. Uncertainty can paralyze anyone.
The daunting feeling of not knowing what the future holds or what measures to take to sustain organizational operations is a huge challenge. We all are more or less affected by uncertainty. Employees are affected mentally, not knowing what the future holds for them, and the HR teams are struggling to put everything in line. The HR and the business leaders need to collaborate effectively to address this critical agenda on their menu.
Engaging Employees in Remote Working Scenario
A Gartner analysis predicts that 48% of employees are likely to work remotely, at least part-time post-COVID-19. A growing number of industry leaders hold the opinion that the remote working culture is here to stay. Engaging employees in a remote working scenario is another daunting challenge and priority in the year 2021 for HR leaders. HR managers will also need to brainstorm and have innovative ideas to keep the organization culture high-spirited – both for the existing employees and for the new incumbents. While the businesses, revenues, and profitability will be under pressure for some more time, positively engaging employees will be a critical challenge for HR and business leaders.
The challenges of remaining productive and effective under remote working conditions call for constant communication and dialogue and HR leaders need to not only retrain themselves but also prepare the business leaders. As HR teams look to the future, they will realize that a lot many practices will change, redefining their roles and the only mantra is to be proactive and not reactive. A Shift in focus – from efficiency to resilience will have to be managed very carefully.
Reskilling and Multiskilling
The HR leaders have another major task on their table and it’s about reskilling and multiskilling the employees in the changing business scenario. According to an HBR article, in 2019, more than 50% of HR leaders struggled to ensure that employees had the skills necessary to navigate an increasingly digitized workplace. And now with the remote working scenario, new methods will be required to monitor the productivity of employees working remotely revised job descriptions will need to be framed to accommodate part-time, full-time, and remote working definitions. This would necessitate digitalization and higher adoption of technology along with resizing and transforming brick and mortar workplaces into technology-enabled virtual ones.
Apart from equipping the employees with more digital skills, there is also a big need to reskill employees in other core and softer skills. The future is all about multiskilling – pandemic or no pandemic, one has to learn to be able to survive in the era of hyper-competitiveness by bringing in more and more onto the table. Also, the social, softer, and emotional skills will play a critical role in the growth of the employees. These programs will help them manage stress, build a positive outlook, and stay productive under the remote working model. The HR leaders will have to open more avenues for the employees in order to help them acquire new skills and let go of obsolete skills.
Remodel Compensation Strategy
With revenues, growth, and profitability coming under severe pressure not just because of the pandemic, now for quite some time, one daunting challenge for HR in 2021 will be to examine and perhaps remodel the compensation strategy going forward. A company’s compensation strategy is derived from its talent strategy, which in turn is derived from the business strategy. Changing business conditions resulting from COVID-19 may indicate a greater need to conserve cash, shifting the importance of different revenue sources or company goals, or the need to retain key staff.
Historically, firms have adopted a compensation strategy and put it in place for a minimum of 3 years before a review but now, this approach may have to be relooked appropriately in the current business environment. Determining employee compensation as such is a balancing act between fixed-term pay, annual performance-related variable pay and bonuses, fringe benefits, long term incentive plans, stock options, medical benefits, etc., and how they will be managed, their external market standards, and the link between compensation and company results.
The organizations will have to adopt a business strategy that calls for greater cash conservation or the need to retain key staff, suggesting a greater emphasis on a higher proportion of variable pay that has a longer time horizon. This could be a significant shift in any company, but change is often perceived positively if employees can understand the reason for it, such as the impact of the pandemic on a business. Hence a well-crafted communication program will be key to success.
In addition to the above 4 areas, the HR leaders will have the challenge of attracting and retaining talent as always and more so if things brighten up ahead of anticipated times in which case keeping the HR costs will be quite a focus area. Last but equally important is to keep the channels of communication open between various stakeholders.
