The HR function has become a source of strategic guidance for decisions in every part of the business. But the elevated role also comes with new challenges—learn how to solve them below.
Maria Valero
Editorial Strategist, HR
Workday
Human resources has always been the backbone of workforce management and employee support. The HR function of the future is taking that a step further, positioning themselves as strategic partners to the business.
As organizations work to evolve, new human resource management challenges emerge: meeting today’s demands while still maintaining the productivity and efficiency that define good HR. Fortunately, with the right technology and management strategies, HR leaders can guide their teams through this transition and keep their companies moving forward.
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The value of modern HR is in helping shape an organization’s workforce now and in the future.
HR teams face a number of challenges that don't happen in isolation. While they balance tension between traditional HR work and new responsibilities, external factors like market shifts, regulatory pressures, higher competition for talent, and technology disruption require HR leaders to think broadly and act decisively.
These are five of the top challenges modern HR teams face today and proven strategies for overcoming them in the future:
Modern HR professionals are data interpreters, change facilitators, and advisors, connecting people strategies with business outcomes.
Finding and keeping the right talent is an ongoing effort for HR. SHRM reports 7 in 10 employers are having difficulty filling full-time positions. At the same time, the latest Workday Global Workforce report found 75% of industries are experiencing an increasing volume of voluntary high-potential turnover.
HR leaders must rethink talent and recruitment strategies to better compete for top talent and retain their best employees. Transformation begins with recognizing the shifting relationship between candidates and employers. Today’s job seekers not only expect competitive pay and benefits but also meaningful work and a strong connection to an organization’s strategy, mission and values from the start.
That means employee retention and employee engagement efforts should start as soon as candidates enter the job pipeline, not just after they’re hired or onboarded.
Skills are one of the most timely concerns HR leaders are dealing with both in their own function and across the business. According to the Workday Global State of Skills report, the majority of business leaders are worried about skills shortages in the next three years, and only 32% believe their organizations currently have the skills they’ll need in the future.
With widening gaps between what employees can do now and what businesses will need in the future, HR leaders have to act quickly to ready their workforces for what's next.
Luckily, the solution is already within reach: internal mobility. Employees want to stay with organizations who invest in their professional development and career growth, and for employers, the payoff is better performance. Workday research found that internal hires were 80% more likely to be rated as top performers in new roles than external hires, further demonstrating the value of looking at your current workforce before turning to external candidates.
As companies expand globally and laws evolve rapidly, HR teams must manage an increasingly complicated compliance landscape. Failing to keep pace can lead to financial penalties, reputational harm, and even legal action. This pressure makes compliance one of HR’s most persistent and high-stakes challenges.
Gartner research identifies data governance implementation and clear, visibly compliance assessment initiatives as key to managing these risks and flagging potential issues before they become problematic. Yet only 37% of leaders reported they have confidence in their ability to assess compliance effectiveness.
The right technology plays a crucial role in solving this problem by giving leaders the data visibility they need to understand and evaluate compliance programs. A centralized HRIS system, for example, can provide real-time updates and reporting capabilities. An HRIS can also connect to a cloud-based ERP system to link HR and workforce planning directly with other core functions, like finance and operations.
Digital transformation is reshaping every phase of the employee lifecycle from recruitment to performance tracking to ongoing retention and career advancement. And while new tools offer enormous potential, many HR teams struggle to integrate them effectively.
Artificial intelligence (AI)—the most transformative business technology in decades—is proving a tough sell for HR. Nearly half (47%) of HR leaders reported to Workday that they don’t fully trust AI, the highest of any function surveyed. Yet the majority of AI pioneers in the HR function say AI is delivering measurable business value at their organization.
While some AI-related concerns have merit, letting them hold teams back from adoption risks leaving HR fragmented and outdated. The more pressing issue is investing in the internal skills and technology tools to implement and adopt AI effectively. With these foundations in place, AI in HR can significantly cut down on repetitive work and give HR professionals more time to focus on strategy and people.
Nearly half of HR leaders still don’t fully trust AI—but AI pioneers say it’s delivering measurable value.
Organizations that fail to plan for future workforce needs often find themselves reacting to crises instead of leading through change. Misalignment between business strategy and staffing priorities can create costly gaps and slow growth. Strategic workforce planning directly addresses this risk.
Most HR leaders recognize the criticality of better and more holistic planning, but Gartner reports that today only 15% are engaged in it at a truly strategic level. Making it an HR priority and planning effectively in collaboration with other stakeholders across the company will be a strategic differentiator in the future, both for optimizing budgets and resource allocation and for retaining top talent that drives performance.
By forecasting demand, analyzing skills inventories, and running scenario planning exercises, HR leaders can align their company's people strategy with long-term business goals.
Collaborative strategic workforce planning will be a competitive differentiator for organizations in the future.
The challenges facing HR are complex, but they are also opportunities to shape stronger and more resilient workforces. With the right mix of strategy, technology, and foresight, HR leaders can turn obstacles into advantages that position their companies for long-term success.
Looking forward, the role of HR will only continue to expand. Rather than serving as a support function, it must be recognized as a strategic driver that connects talent strategy with business outcomes. Organizations that empower HR in this way will be better equipped to navigate disruption and create workplaces where people and performance thrive.
Feeling the strain of rapid market changes on your talent strategy? Develop a plan to define goals, evaluate possible vendors, and unlock workforce potential with the right skills technology in this Workday Buyer's Guide.
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