Talent and Technology Remain Key Challenges for HR Leaders

Finding the right prospects and maximizing their contributions when they come on board must be a central focus for businesses, says a new report from Paychex. Search experts from Randstad U.S. and ZRG Partners weigh in on how technology is changing recruitment.

July 22, 2019 – The newly released Paychex “Pulse of HR Survey” found that talent and technology are the two primary factors impacting HR leaders this year. Organizations must prioritize attracting the right candidates and optimize their productivity once on board, said the report.

A historically tight labor market, fast-changing legislative landscape and an increasing reliance on HR technology all play a role in HR leaders’ evolving job responsibilities. More HR leaders, however, feel they have a voice in company strategy and decisions today (90 percent) than in the previous two years (80 percent in 2018 and 2017), said the survey.

“The strategic contributions HR leaders make are bolstered by innovative technology solutions that not only dramatically reduce time spent on administrative tasks but can also provide valuable insights on their workforce and the business overall,” said Leah Machado, Paychex senior director of HR services. “With more time, information, and resources, HR professionals are better positioned to successfully address the evolving, complex HR needs of both employees and the organization.”

As part of their role, HR leaders are leveraging the following top five tactics in 2019 to help shape business success:

1) Evaluate workplace productivity and efficiency (86 percent).

2) Provide staff training and development programs (83 percent).

3) Facilitate trainings for discrimination and harassment prevention (82 percent).

4) Focusing on company culture to drive results (80 percent).

5) Assessing employee performance more than once per year (80 percent). 

Combating the Tight Labor Market 

For the first time in this survey’s three-year history, attracting talent surpassed regulatory compliance as the top HR concern. More than two-thirds of HR leaders said it is difficult to find and hire quality candidates, up from 59 percent last year. When asked specifically about challenges related to hiring, HR professionals most often cited:

  • Finding qualified candidates (49 percent).
  • Retaining their best employees (49 percent).
  • Finding candidates who fit their company culture (42 percent).

“Improving the quality of new hires is our biggest challenge,” said one survey respondent. “There is fierce competition for employees in our area — most of the good ones are already working.”

As a result of these challenges, HR teams are increasingly willing to train job candidates who may not check all of the boxes for required skills, said the study. Eighty-five percent of HR leaders would be willing to train and upskill an underqualified candidate, and 78 percent said their organizations have already benefited from upskilling underqualified workers.

Technology and Analytics Driving HR Success

Eighty-seven percent of survey respondents agreed that HR technology has strengthened their contribution to corporate success, up from 75 percent in 2018. Part of making strategic contributions is relying on data to make the right recommendations. For the first time since launching the survey in 2017, a full 100 percent of respondents said that they rely on HR analytics in some capacity with the most prevalent being to:

  • Make more informed decisions (90 percent).
  • Defend their decisions to corporate employees (89 percent).
  • Understand how to communicate with employees (89 percent).

According to the Paychex research, leveraging technology tools also lends a hiring edge, as 81 percent of respondents said that their company’s tech investment will allow them to maintain or grow their headcount and increase employee productivity. As such, technology tops the list of HR spending priorities. Among the two-thirds of HR professionals surveyed whose department budgets are increasing, technology investment topped the list of ways they would like to spend the additional funds.

“My single biggest strategic contribution to my company was helping it automate its HR processes,” said one survey respondent. “Before, everything was manual. Now, we have all our work online.”

Meeting Employees’ Evolving Needs 

Paychex found that offering nontraditional benefits and perks is one tactic HR leaders are utilizing to attract and retain top talent today. For the third consecutive year, flexible scheduling ranked first among nontraditional benefits with nearly 40 percent of respondents offering this increasingly in-demand perk. Twenty-five percent of respondents said their companies: a) offer career development programs and (b) reimburse at least some portion of employees’ continuing education costs, which tied for the second most frequently-offered perks in 2019.

What Workers Want May Surprise You
Contrary to what is generally thought, the traditional way of working – meaning, at the office during open hours – is still preferred among respondents of the Randstad Workmonitor report. Globally, 68 percent shared this sentiment, with India (85 percent) at the highest end and the Netherlands (47 percent) at the lowest end. 

“Finding the right people, keeping the culture upbeat, and striking the right balance between productivity and happiness are our team’s greatest priorities,” one survey respondent said.

Top Perks

While, for the third year in a row, flexible scheduling remained the top perk employers were offering, it has company as younger workers continue to drive workplace change. For the first time, this year’s survey polled HR leaders about the use of tuition reimbursement as a nontraditional benefit. One-quarter of respondents said their companies reimburse at least some portion of employees’ continuing education costs. This tied tuition reimbursement with career development programs as the second-most commonly provided benefit. Longer-established companies — those in business for more than 20 years — were twice as likely to offer tuition reimbursement.

Differences emerged among geographic regions. One-third of HR leaders in the South said their companies reimburse tuition expenses, followed by 28 percent of companies in the Midwest. Just 14 percent of HR leaders in the Northeast and West said their companies offer this benefit.

In addition, a small share of companies helped repay employees’ existing student debt. Twelve percent of respondents in this year’s survey reported that their companies provide student loan repayment as a benefit.

Employee Engagement Dips

In 2019, just 53 percent of HR leaders reported that more than half of their employees are engaged. This was down from nearly two-thirds who said this in 2018. Engagement was defined in the survey as “fully absorbed by and enthusiastic about their work, and taking positive action to further their company’s reputation and interests.”

Related: HR Challenges Expand in the New Year

Because the timing of engagement surveys can impact the results, monitoring engagement levels regularly throughout the year may be the best way to account for fluctuations. Many HR teams are already doing this: 73 percent of those surveyed said they measure employee engagement via pulse surveys throughout the year.

The Future of HR Tech

Savvy HR professionals remain on the lookout for new technology and tools that will give them a competitive edge. These tools are beginning to transform recruiting, collaboration, and task management. HR leaders reported finding success with:

  • Recruiting technology to reach high-quality candidates (72 percent).
  • Workplace collaboration tools such as Slack, Chatter and Jive (69 percent).
  • Voice recognition (58 percent).
  • Virtual reality interfaces (57 percent).
  • Chatbots (54 percent).

Recruiting Experts Share Thoughts

“As the workforce management and technology landscape continues to evolve at a rapid pace, HR and talent leaders must understand how they can leverage new tools and capitalize on the power of talent analytics to adapt their strategies and account for these changing trends,” said Rebecca Henderson, chairman, global leadership team of Randstad Sourceright and group president, talent solutions, Randstad U.S.

For Executive Search Firms, Analytics Can be a Game Changer
Big data is rewriting the script for how companies around the world do business. The market for big data and business analytics is expected to grow to $203 billion in the next three years, according to the International Data Corporation. It only makes sense that analytics should become an increasingly vital component of the executive search process.

“Clearly, Big Data and analytics are changing our world and there is no end in sight for the ways it makes our lives easier and more productive,” said Larry Hartmann, CEO of ZRG Partners. “For executive search firms and the clients we serve, the real trick is figuring out how to effectively use the amazing insights and data we gain throughout our processes to drive better hires and quicker fill times. But turning this valuable information into actionable insights without making it overwhelming or cumbersome is the hard part.”

Related: The Global Recruiting Sector is in Growth Mode, But Challenges Loom

Data, analytics and technology are changing how top companies hire at the senior level in a number of ways, said Mr. Hartmann. Transparency, for example, is systemically replacing the “mysterious black box process of executive search,” he said. Finding candidates is important, of course, but so is the process that produces information and insight to understand the best hiring options.

When a client describes a model candidate with 10 specific skills and experiences from 20 specific competitors, for example, the results of that search provide real compensation data for the role, which can be quite useful. Mr. Hartmann said that his firm has converted embedded, search-wide compensation data into graphical compensation analytics that can be broken down in any number of ways.

“As clients assess a slate of candidates, just looking at skills and experiences is not enough,” he said. “Factoring in cost versus benefit with actual compensation data clearly helps to keep projects on point and filled in quicker timeframes. As we at ZRG like to say to our clients, the denominator of ROE is time and anything we can do to expedite a client’s internal processes to complete a critical hire is part of our focus.”

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media

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