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Study: HR Leaders Identify Finding and Hiring Quality Employees as Top Challenge in 2019

Third annual Paychex Pulse of HR Survey reveals organizations must prioritize attracting the right candidates and optimizing their productivity once hired

The 2019 Paychex Pulse of HR Survey, released, found talent and technology are the two primary factors impacting HR leaders this year. The third annual report from Paychex, Inc., a leading provider of integrated human capital management solutions for payroll, HR, benefits, and insurance services, showed an increased emphasis on improving employee efficiency and experience, as well as driving HR success with technology.

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. However, more HR leaders 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).

“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.”

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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 say it’s 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,” noted 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. 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.

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Technology and Analytics Driving HR Success

Eighty-seven percent of survey respondents agree 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 research, leveraging technology tools also lends a hiring edge, as 81 percent of respondents say 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,” remarked one survey respondent. “Before, everything was manual. Now, we have all our work online.”

Meeting Employees’ Evolving Needs

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 offer (a) 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.

“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.

In addition to the impacts of technology and talent challenges on HR teams, the Paychex Pulse of HR Survey also revealed insights on HR’s role in addressing social issues in the workplace, meeting the needs of remote and contract workers, and fostering employee engagement. The complete research report is available on Paychex WORX.

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