2018 Paychex Pulse of HR Survey: Top HR Challenges

Organizations continue to recognize employees as their most valuable resource. For the second year in a row of the Paychex Pulse of HR Survey, "strategic partner" was the top choice of "primary role" cited by HR leaders at small and medium-sized businesses. This aligns with what CEOs want from HR; performance leaders who understand the industry's different perspectives and are capable of creating plans that respect individuality. Yet in this ever-increasing complex role, HR managers still have their share of formidable HR challenges.

Within these challenges, let's explore what's consistent, what's new, what dropped off, and what it means to you.

Top 5 HR challenges

The five most-cited HR challenges in the 2018 Paychex Pulse of HR Survey were:

1. Keeping up with regulations (38 percent)
2. Tracking employees' time (38 percent)
3. Complying with regulations (35 percent)
4. Offering competitive benefits (33 percent)
5. Retaining talent (31 percent)

In 2017, the top five were:

1. Keeping up with regulations (33 percent)
2. Retaining talent (28 percent)
3. Complying with regulations (25 percent)
4. Training and development (25 percent)
5. Attracting talent (24 percent)

For 2018, recruitment, retention, and compliance continue to headline concerns. However, tracking employees' time and offering competitive benefits moved into the top slots while attracting talent and training and development dropped off.

Keeping up with regulations and compliance

These days, HR grapples with keeping pace with the sheer speed and volume of change. Together, keeping up with regulations and complying with them accounted for nearly 75 percent of HR leaders' greatest challenges. From staying on top of changing payroll laws to managing health care benefits, HR leaders are swamped with the tremendous responsibility of maintaining compliance and avoiding costly penalties, fines, and lawsuits. Meanwhile, just as regulations and compliance continue to grow more complicated, CEOs are clamoring for HR to be simplified.

In its ongoing commitment to help businesses with their HR efforts, Paychex identified the top 10 regulatory issues facing small businesses in 2018. Instead of stretching your resources, outsourcing HR compliance services can help HR leaders move beyond these overwhelming administrative functions.

Tracking employees' time

With regulations and compliance posing major challenges to HR leaders, it's fitting that tracking employees' time has come into sharp focus. Shannon Anderson, senior HR generalist at Paychex, explains that in her experience, the 2016 FLSA regulation change proposal that did not pass led employers to become more cognizant of why tracking employee time is so critical.

"A challenge has presented itself, especially with remote workers who split time between the office (whether working remotely or on-site) and out in the field seeing clients. Employees can clock in from anywhere via a phone app or computer and check emails. That constitutes work time and employers are on a mission to make sure those hours are being accounted for by employees," Anderson says.

As an additional layer of complexity, employers may not necessarily be aware of the hidden costs of time theft and how to stop it.

Finally, outdated, paper-dependent methods can frustrate both employers and employees. Calculation times, increased chance of human error, and wait-time for payment can all contribute to overall workplace dissatisfaction. HR leaders can save time and improve tracking with payroll technologies such as online timekeeping, iris recognition technology, or a time clock that integrates with your HR software.

Offering competitive employee benefits

The challenges associated with offering and administering employee benefits edged out retaining talent in the 2018 survey, yet both are closely related.

"It is the competitive benefits that really help to retain talent," Anderson says. "I've seen a lot of employees turn down offers because a 401(k) or flexible spending account (FSA) is not offered for pre-tax benefits."

A professional, reliable HR services provider can help you assess various considerations when adding onto your benefits package. If it's been some time since you've assessed your benefits package, now may be a good time to conduct a benefits audit to make sure you are offering the most competitive benefits you can provide that will please your employees and attract and retain talent. Learn more about what auditing benefits offerings could look like.

Retaining talent

While retaining talent moved down the list of top challenges, attracting talent was pushed off entirely. An employer wants to know how to keep a productive, engaged employee. Competitive benefits are a large part of that successful equation, but more than benefits are needed to keep top talent happy and satisfied.

You don't always need a large budget to create an inspiring office culture. Creative employee retention ideas and non-traditional benefits are often valuable to employees. Of course, you cannot retain what you do not have. Attracting top talent has been a perennial concern for HR leaders, but there are ways to find good employees.

Having a seat at the table means HR is becoming more adept at handling traditional administrative challenges. By boosting efficiency and providing data-driven insights, HR technology and services have helped HR leaders become strategic partners alongside executive level leadership.

Don't miss what else is current and relevant with HR leaders by checking out other findings from the 2018 Paychex Pulse of HR Survey.