2023 STATE OF HR SURVEY

PRESENTED BY BUSINESS MANAGEMENT DAILY

2022 was a year of many challenges, and 2023 promises to provide many more. Some expected, and others still unknown. However, HR professionals know it's necessary to plan for disruptions, change, and unexpected challenges. We gathered the input of 168 HR professionals from businesses of different sizes and industries, and asked for insight into what challenges they faced, what they expect for 2023, and how they overcame some of the biggest challenges they faced in 2022. 

Don't miss the opportunity to get valuable insight from your peers on what challenges they've faced, and what's top of mind as they dive into the year.

 Hiring & Recruiting

Our question:

Finding the right match for a position can be challenging. When it comes to talent acquisition, what're the biggest challenges you face? (Select 2)

Getting Quality Applicants: 80.36%
Interviewing & Assessing Candidate Quality: 32.14%
Finding Diverse Candidates: 25.00%
Streamlining the Hiring Process: 22.02%
Sealing the Deal After an Offer is Made: 16.67%
Reducing Bias in the Recruiting Process: 11.90%
Other: 11.90%

Insight from the comments

For some companies, whether it’s due to location, rules and regulations, or other causes, it’s hard to get applicants in the first place. 

So far, the biggest obstacle is just getting applicants period.
I work in a rural area that is difficult to attract talent. We continue to make compliance with the COVID vaccine an expectation for employment, although religious accommodations are granted. This mandate has made it much more difficult to attract people to our organization.
Substantially fewer candidates are applying for our positions, post-Pandemic. Just one-third of the pre-Pandemic amounts of candidates. Work-Life Balance seems to be their main emphasis nowadays, so they avoid shift-work jobs.
The major challenge is identifying the right talent pools from which quality candidates can be sourced. Another challenge I face is the development of an Employee Value Proposition that really resonates with the candidates I seek to attract.

The problem isn’t just getting candidates to apply, it’s getting candidates who have the right skills and qualifications for the job. Lots of applicants simply don’t have the minimum skills needed.

Candidate quality has been a constant challenge, verification is not always reliable.
Particularly within the last 4 years, it has been extremely difficult to find qualified candidates in the public accounting industry. We've advertised in our local newspapers, our website, all social media platforms, and also hired a recruiter. Unfortunately, the candidates that do apply either 1) are not qualified; 2) request only wanting to work from home; or 3) before making a decision to accept a position, ask about our paid leave.
After placing an ad on the job search sites, we get candidates that don't meet any of the requirements we are looking for. This makes the hiring process more difficult. I even enter deal-breaker questions that need to be answered before applying for the position. The amount I spend reading through 20 to 30 resumes a day is time-consuming. Or if I find the right candidate, they're not willing to negotiate. We offer excellent employee benefits, but candidates worry more about the monetary offer.
We are a veterinary hospital so it is nearly impossible to find qualified applicants to even interview. We give detailed specifics in the job description and list all qualifications that the applicant must possess. However, people with absolutely none of the required qualifications apply or lie about their skills, which we discover in the interview process. Even going through companies like Indeed or Zip Recruiter doesn't weed out the unqualified applicants despite the filters we set in place.

Competitive pay and benefits can be a big challenge, especially in government and non-profit settings.

As a not-for-profit, our wage scale tends to be lower than the area average. We also expect a lot from our staff. These things together lead to high turnover and sometimes people either decline the offer or accept it and never arrive for orientation. We have great benefits, but benefits don't pay the rent.
Trouble competing with salaries larger companies can provide.
Getting corporate to agree to adequate salary for the hires.
We are a non-profit and compete with the private sector in compensation. We do offer great benefits though so usually when we hire, we have no problems with retention IF the employee is OK with the pay.

In some cases, applicants may accept the job, then disappear and not show up for shifts, or quit shortly after. 

Our biggest issue is hiring the right people. So many times we make an offer and then we're ghosted or they quit after a short period of time.
Getting applicants to follow through with accepting a position. Some never show back up for orientation & training. Others finish orientation & training, but never show up for their schedule.

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 Employee Retention

Our question:

Keeping good employees around is vital to an organization’s success. After all, hiring is time-consuming, expensive, and in the meantime, productivity is lost. While you can’t read employees’ minds, what do you see as your main struggles with improving employee retention? (Select 2)

Keeping Compensation & Benefits Competitive: 51.79%
Keeping Employees Interested and Engaged in Their Work: 29.17%
Preventing Employee Burnout: 27.98%
Providing Opportunities for Advancement: 24.40%
Investing in Training & Development for Employees: 23.21%
Creating a Healthier Work-Life Balance: 14.29%
Creating an Inclusive Environment: 8.33%
Other: 11.90%

Insight from the comments

Low pay and limited resources to improve compensation make it difficult to keep skilled employees when other companies are offering more.

Mostly lack of resources during these difficult times.
A key issue is competitive wages. Benefits are good but the private sector often equals or exceeds in this area.
Lack of resources — the organization is donor funded and the budgets do not support such activities. A difficult company culture - some of the senior managers do not see the need to support employees by investing in their training and development. they feel it is the responsibility of the employee to take care of their training needs.
We are so busy we have been working 50 hours per week non-stop because we cannot find more skilled labor. Because we are so busy we are missing deadlines or making errors that cost the company money making it harder to raise wages and benefits for our workers.

At times, the problem is a difference in expectations - employers want a lot out of employees at the same time more employees are thinking about a healthy work-life balance and workplace flexibility. 

Company requires all to be in the office. Very little remote work is allowed, there’s a lack of flexibility.
Employees don't go the extra mile anymore to show loyalty and commitment to the company. They only want to put 40 hrs of work, clock out, go home and repeat the same routine every day. There is no motivation to be a better employee. We make different office activities to keep them engaged, but nothing seems to work.
There are too many other opportunities for them to go elsewhere. If they don't like one company policy or a coworker/manager, they just walk out and go next door.
Often it seems like there is little accountability from the employee, many are struggling to make it from pay check to paycheck, but do not want to work the hours necessary to reach their financial goal or need. This could be a result of losing certain state benefits if they work too much.

In some cases, employees aren’t invested in the company for the long haul, instead, it’s just a stepping stone.

Within our company we have a host of longevity with core employees (10-40 years). After hiring the "right candidate" it seems they just want to gain knowledge and move on. Most applications reviewed by our company see an average employment history of about 3 years.

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 Biggest Obstacles

Our question:

Most HR team members have great ideas and good intentions, but going from idea to action isn’t always as easy as it sounds. What are the biggest obstacles that stand in the way of your success? (Select 2)

Getting Management Buy-in on HR Efforts: 36.90%
Not Enough Funding for HR Initiatives: 27.98%
HR Department is Under-Staffed: 27.98%
Getting Employee Buy-in for new Initiatives: 27.38%
Keeping up with Changing Employment Laws: 25.60%
Proving the Value of HR Initiatives: 23.81%
Not Enough Tools to Support Work Objectives: 20.83%
Other: 9.52%

Insight from the comments

In many organizations, despite their importance, HR departments simply don’t get the seat at the table that others do, making it difficult to get support for initiatives.

It is very difficult to have 6 owners for 1 company. Trying to appease all 6 could have challenges in most instances. Whatever I may suggest or try to implement, must go through all 6 owners for their approval. At times, this could delay the process or simply shut down the idea. For the most part, most employees in this firm adhere to any HR policies and procedures.
C-level makes final decisions regardless of being shown proven business cases for why a different option is better.
Some of the senior managers think that they can work without the HR department. they make most decisions without involving HR.
Getting stakeholder buy-in for initiatives is not an easy feat. Especially when the major thrust is in the aspect of Cost Control.
Budget is always an obstacle. We constantly need to justify why the need for rewards for employees. I believe sometimes management doesn't see the value of any of these extra activities.

A major challenge HR professionals face is staying on top or rules, regulations, and other changes while juggling their regular responsibilities.

Although not new to HR, I'm new at my position, and new to this type of industry. Keeping up with training for myself, learning a new industry, and a new company, while trying to keep up with the day-to-day has been challenging.
Being in healthcare and having staffing issues, all efforts go to hiring and supporting the staff we have currently. The changes in law, regulation, and healthcare in general, on top of COVID, etc have left little time to do much strategic planning and implementation. We were also understaffed for almost 1 full year and trying to catch up. Regulatory reporting ACA, EEO, etc also take time. We have just implemented a system hoping it would help with efficiencies, but currently, that is not the case.

For many HR workers, whether they’re a team of one or part of a larger organization, there simply aren’t enough staff members, tools, and resources to get the job done. 

There are not enough hours in the day to get everything done correctly. Exploring program applications to help with the automation of some areas would be greatly appreciated.
More resources to attract qualified candidates that would not cost so much. there are a lot of companies out there that can help get your business seen, however by the end of it the cost is overwhelming to a small business.
Sometimes it is hard to get management to see the need for needed software upgrades.
I am the manager and therefore the HR director. But I'm also a licensed veterinary nurse. There are not enough people to cover all roles so I work essentially two full-time positions. I can't always devote the proper amount of time and effort to the HR role that it deserves.
Upper management won't loosen their wallets for the front line but they spend lavishly on their Leadership events.

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 HR Challenges

Our question:

The HR department needs to know a lot. You need interpersonal skills, a solid understanding of company policy, knowledge of employment law, the software you use, and much more. It’s hard to keep up with everything. What common HR responsibilities do you have the most challenges with? (Select 2)

Updating Policies & Employee Handbooks: 48.81%
Employee Discipline: 25.00%
Administering FMLA Leave: 24.40%
Record Management: 20.83%
Workplace Investigations: 18.45%
ADA Accommodations: 11.90%
Payroll Processing: 10.71%
Other: 9.52%
Acquiring SHRM/HRCI Credits: 7.74%

Insight from the comments

For many HR workers, time and money are major limitations in staying up to date on current issues, regulations, and policy best practices.

Not enough access to all the tools available to make sure we're compliant and up-to-date; I spend a lot of time researching for the most recent data I'm in need of. I learn better via printed materials, but can't afford to buy $500-$600 reference books and $2500/yr trainings offered by some organizations.
Most recently, the time required to research and do continuing education to stay on top of changes when in a heavy recruiting environment and change management scenario.
I could choose any of the above, because the root cause of our challenges is a lack of time and resources. If I was to say what tends to be the most challenging for me, it's the tasks that involve applying employment law & regulations (almost everything, I know!) when the complexity or uniqueness requires research. Compliance is also challenging and time-consuming.

In some cases, HR initiatives are held up by slow leadership who don’t react in a timely manner. 

Management is much too slow to approve policy recommendations, and financial constraints have really impacted payroll processing.
The root of the issue is the lack of leadership completing tasks in a timely manner and the turnaround time for the Board of Directors to approve changes.

In some cases, balancing state rules and regulations can add an extra degree of challenge. 

With our states paid family leave, there are many more requests that "double up" on paid time off, and filling temporary paid leave for a large number of employees is difficult.

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 Expectations for 2023

Our question:

The last several years have brought unexpected challenges to HR departments all across the US. While no one has a crystal ball to peer into the next year, what do you see as your biggest upcoming challenges in 2023?

Employee Retention: 44.64%
Attracting Talent: 35.12%
Employee Compensation: 24.40%
Employee Engagement: 16.67%
Change Management: 11.31%
Providing Competitive Benefits: 10.71%
Remote & Hybrid Work Arrangements: 10.71%
Workforce Planning: 8.93%
Management Buy-in: 8.93%
Diversity, Equity, and Inclusion: 6.55%
Continued Learning for the HR Team: 5.95%
Updating Company Policies and Handbooks: 5.36%
Measuring the Value off HR Initiatives: 4.76%
Union Growth & Expansion: 4.76%
Lawsuits & Legal Issues: 2.38%
Other: 1.79%

Insight from the comments

Unsurprisingly, many expect to see challenges around recruiting and attracting employees in 2023, with a tighter job market and high competition for highly skilled employees.

We are finding less and less people are going to college to become a CPA and working in the public accounting industry. The candidates we have offered a position to have either declined or ghosted us. The candidates that have declined, I have asked those people why they did not choose us to work for. Their response: "I don't want public accounting to work on multiple client with various industries. I need to work for just 1 company." We are also facing employee compensation to be quite competitive for this industry.
More jobs than job seekers and as a recruiter I have to have an attractive salary and benefits plan. I feel our company may be under market in those areas.

Increasingly, organizations recognize the importance of keeping good employees, especially as the job market becomes more competitive. However, they don’t always have the resources available to do so. 

Our organization has lost a significant number of employees due to the vaccine mandate. It has been very difficult to replace all of these positions.
Additional resources to provide employees with engaging activities, training and opportunities. Understaffed HR departments are focused on basics like hiring and payroll just to get by.

A major problem for many organizations, related to both hiring and employee retention, is keeping compensation and benefits competitive enough to attract and keep talent. 

With the challenges facing the industry because of inflation benefits and compensation are hard to budget for.
Our pay rates are often not competitive. More funding for such would help a lot in terms of attracting and retaining staff.
Government sector compensation has not kept pace with the private sector. Mobile . part-time, and contractor options are not as plentiful in the government sector.
"This is how we have always done it" isn't going to work in this current environment. Pay needs to be competitive with all the other jobs around us.

Many HR professionals have good plans are are read to implement them, but they hit a roadblock when they don’t have a seat at the decision making table. 

I personally need to have access to more data to be able to provide and substantiate business insight. Also, it's hard to get people to buy-in to change.
Management disregard of worker concerns, until such time as they become medical issues, lawsuits, etc…
Autonomy, for one and trust from C-Level Management about my recommendations.
We need an HR professional on our board, so that they can answer the board member questions and streamline the approval process for changes.

The best plans don’t mean much if you don’t have the resources to implement them. Unfortunately, many HR professionals expect to face budget and resource constraints in the year ahead.

Resources for training, development and succession planning. Often times upper management has delusions about staff that appear fantastic to them, that are often sub-par when working with others outside of that area that they do not see, or point blame at the inaccurate parties.
We are currently budget constrained, so if we don't increase employee compensation in the next few months, I anticipate increased turnover challenges. Management has to buy in to the financial needs of our employees in spite of our cash crunch.

 HR Wins in 2022

Our question:

That’s enough about your challenges, let’s talk about your triumphs. What’s one challenge you overcame in 2022? How did you manage to do so?

Insight from the comments

Recruiting wins.

Increased the number of applicants via virtual recruitment platforms. We targeted areas and schools that have a high number of candidates through national outreach.
We updated all of our job descriptions to reflect current responsibilities.
Created all the processes/procedures and streamlined the time it takes to onboard new hires.
Bring back some retired employees. We stayed connected with them after their retirement and when they found it difficult to pay bills due to inflation they were eager to return on a part-time basis, which we were able to accommodate.
Moved toward an online applicant tracking system with lots of work and investment of resources.

Employee retention & engagement. 

Started in HR making small changes to show the employees are appreciated.
Started focusing on employee engagement, through employee surveys.
Moved from an old performance review system to a coaching model!
We improved employee satisfaction by engaging employees in their ideas.
HR stayed focused on employee engagement. We did several events to celebrate the important work they provide.
Employee Retention. HR initiatives in employee training and career advancement along with cross-functional moves.
The biggest challenge is retention. We have instituted training for management, increases in salaries, performance increases, and continuing education for everyone.
I was able to move our team to unlimited PTO. We had been working with flextime in addition to our regular PTO and the team did so well managing it that moving to unlimited PTO was a very easy sell to management!

Resource management. 

We have had the challenge of reducing paper. We identified employees who were reluctant to use computers and worked with them individually to reduce the printout of unauthorized timesheets by 90%.

 Tips & Tricks for Success

Our question:

Share your expertise: What’s one resource, tip, or trick you use to make your job easier? How does it help?

Insight from the comments

Tools & Resources.

Outsource payroll — I don't need to focus on payroll laws, tax reports, and W-4s.
Using a payroll system that incorporates time management, HR, onboarding, hiring, background checks, leadership training, and performance evaluations all in one has been key.
One resource is more bandwidth for faster connection with cloud-based applications.
We utilized a recruiter more in the last year than ever in our history.

Staying up to date. 

I am part of a few HR professional groups and I participate in them fairly regularly in order to keep my sanity.

Communicating with Employees. 

Improve management by walking around and ensuring employees know the face of HR.
Communication. Talk to employees, ask how their workload is going. Make sure every employee knows they can talk to me or an owner should they need additional resources, assistance, or time off.
I never say "no" to an employee's question. There's always a solution or an alternative answer vs. "no."
Most managers share changes minimally with employees. I encourage managers to share changes consistently in order to maintain full and accurate information for these changes.
Management buy-in is important before rolling out new initiatives. Manager training is crucial to getting things done by employees right so we focus on those areas when we roll out new initiatives.

Organization & task management. 

Calendar reminders and checklists to keep me from forgetting to get something done.
I email myself updates and reminders so I don't let things slip.
I write notes, ideas, and conversations down in a notebook so I can refer back to them at a later date.
Turn off email when working on a project. Constant emails just make concentration more difficult.Turn off email when working on a project. Constant emails just make concentration more difficult.

Program & tool recommendations. 

Dragon dictation. It's a magical tool!
Software called goHappy. Allows us to communicate directly with frontline workers instead of whispering down the line using store managers.
state-of-hr-survey

Download your FREE copy of our FREE copy of
our 2023 State of HR Survey!

PRINT TO PDF

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