People & Leadership

6 top HR challenges in 2021: How HR and People leaders can prepare

Big changes occurred in 2020 for the world of work. Here are six HR challenges for 2021 according to the experts and how to get ahead.

HR leaders have confronted more challenges than ever in 2020 and “face a challenging year ahead, as the economic realities of the COVID pandemic continue to bite”, says Katie Jacobs, senior stakeholder lead at CIPD.

While 2021 may not be plain sailing, HR are now prepared and ready to deal with anything, if they can continue along a path of agility and resilience.

So, what better way to stay resilient than by understanding the challenges that may be yet to come?

Here are six top challenge predictions from HR and People experts, with thoughts on how to be prepared.

1. Coping with shifting social and business restrictions

Suzanne Lucas, owner of Evil HR Lady, hopes the biggest challenge in 2021 will be “navigating a return to normal and encouraging our workforce to get vaccinated”.

However, with the constant changes happening as a result of coronavirus (COVID-19), she thinks it’s more likely that “HR will be focused on a fluctuating workforce, balancing leaves of absence, and figuring out new government regulations”.

It means HR and People teams will need to be even more adept at understanding and managing the effect of new guidance, on both business operations and employees’ personal lives.

2. Re-introducing planned HR initiatives, despite economic uncertainty

WFA Covid-19 Response Tracker found that 89% of large multinationals have deferred campaigns, and the same has been true for HR and People teams.

Nicole Caracci, Head of People and Talent at Athletic Greens, says: “Many of the 2020 strategic projects which HR departments had planned, and meticulously prepared for, quickly went on hold as decision makers ‘waited it out’ in hopes of receiving some clarity.”

Will this be any different in the future?

“Unfortunately, as we head into a new year, that sought-after clarity is still very much absent,” says Caracci, “yet it seems that many businesses have pushed full-speed-ahead on restarting activity in an effort to make up for lost time.”

She explains that for HR and People leaders, this means “providing positive encouragement and inspiration to our workforce”, despite not knowing how things will play out.

3. Fulfilling diversity and inclusion responsibilities

Shannon Smedstad, Employer Brand Consultant at Exaqueo, acknowledges that the HR challenges for 2021 will be increasingly industry-specific.

However, she points to 2020’s social unrest with Black Lives Matter and campaigns for LGBTQIA+ rights as a priority for next year and beyond.

She says: “Regardless of industry, helping organizations authentically address social unrest, diversity, inclusion, and equity, I hope, is at the top of all HR leaders’ priorities.”

Katie Jacobs agrees. She says: “Organisations will continue (rightly) to feel the pressure of moving from words to action on ethnic diversity, related to the strength of feeling of the global Black Lives Matter movement.

“This requires developing a robust anti-racism strategy and resourcing it appropriately.”

4. Spotting and tackling remote employee mental health concerns

Furlough and lockdown have been two major triggers for anxiety and depression this year, with many people struggling to cope with isolation and financial difficulties.

“Covid is still here and will likely be around for much of 2021 – the uncertainty that it brings is having a huge impact on employees’ mental health,” explains Harriet Shurville, Chief People Officer at IRIS.

“With people working from home, it is harder to spot the signs that people need help and for people to feel connected.”

The challenge for HR and People leaders will be to make sure that “mental health is talked about often and normalised, and that employees know that there is support available to them”.

5. Balancing business operations with future strategic thinking

Almost every business globally will have been affected by coronavirus in some way, and in 2021 resilience will continue to be key as organisations pivot and adapt to new ways of working and changed consumer behaviours.

For HR leaders, Katie Jacobs thinks it will be essential to face the economic realities of a global pandemic with an empathetic, people-centric approach.

She says: “They will need to balance the operational need to remain financially sustainable with the strategic need to look ahead and think creatively about the future model of the organisation.”

Jacobs explains that HR can do this by “implementing hybrid working styles, rethinking the purpose of the office, upskilling managers to be able to operate in a remote-first world and maintaining wellbeing and productivity”.

6. Retaining and sourcing new talent

We often hear ‘duty of care’ in relation to HR and People teams, and with the pandemic continuing to affect the way the world works, Shannon Smedstad asserts that HR support will be crucial to the way employees view their employer – particularly in regard to whether or not they feel cared for.

She says: “The guidance HR provides, and the decisions they make, in the upcoming months will have an immediate effect on retention and hiring, and a lasting impact on the organisation’s employer brand.”

Janet Potts, Head of HR at Weavers Way Co-op, also identifies a gender-based HR challenge with “the current rapid pace of women dropping out of the workforce”.

She adds: “As a majority female company, we’re anticipating recruiting and retention challenges in 2021 as changes with schooling, homecare, and childcare persist.”

HR leaders have a key role in both leading and influencing diversity and inclusion in the workplace.

From supporting the CEO and senior management team, to adapting company culture to make everyone feel welcome and included, HR and People teams will need to add to the ways they tackle bias and discrimination, to attract and retain top talent.

HR continue to rise to the challenges they face

Despite being incredibly challenging in ways that no one could ever have predicted, 2020 has been a year of progress for HR – catapulting HR priorities into the fore and giving HR their long-deserved seat at the table.

It means HR should be in an advantageous position to execute in 2021 and beyond, with the scope to remain strong, adapt and conquer any challenges that may come their way.