Post-COVID, business leaders often tango with a unique set of stressors, such as navigating an evolving landscape marked by economic uncertainty, changing consumer behaviors and supply chain disruptions. The imperative to adapt to remote work models, ensure employee well-being and implement digital transformations certainly adds layers of complexity to this.
Leaders bear the weight of strategic decision-making amid unpredictable market shifts, while also addressing the mental health and productivity challenges faced by their teams. So, to provide more insights on the challenges business leaders and HR teams face, Paychex and Bredin released the Priorities of Business Leaders survey annually for the past few years.
The 2024 Priorities of Business Leaders survey found that the top business challenges respondents identified are rising interest rates, overall inflation and threat of an economic slowdown.
As interest rates increase, businesses often face higher borrowing costs, impacting their bottom line and potentially hindering investment and expansion plans. This economic indicator directly influences financial decisions and requires leaders to strategize effectively to mitigate its adverse effects on their organizations.
Inflationary pressures can lead to increased costs for goods and services, affecting profit margins and necessitating careful cost management strategies. Business leaders must navigate this economic environment by evaluating pricing structures, supply chain efficiencies and operational processes to maintain competitiveness while addressing the financial implications of inflation.
Additionally, economic downturns can lead to reduced consumer spending, decreased demand for products and services and heightened market volatility. Business leaders are compelled to develop contingency plans, diversify revenue streams and implement measures to enhance organizational resilience in anticipation of potential economic headwinds. This challenge requires a delicate balance between cautious fiscal management and strategic initiatives to position companies for sustained success in uncertain economic conditions.
The survey findings highlight that risk management, leadership development and attracting talent are the top HR challenges.
HR professionals are tasked with implementing robust risk management strategies to mitigate potential liabilities, enhance workplace safety, and navigate the intricacies of insurance and compensation programs. The legal landscape and the need for proactive measures to address workplace accidents or injuries add layers of complexity to HR's risk management responsibilities.
Building and nurturing effective leadership within an organization is crucial for its long-term success. HR leaders are tasked with designing and implementing programs that identify and develop talent, cultivate leadership skills, and ensure a pipeline of capable leaders to guide the organization through various challenges. This multifaceted challenge involves assessing current leadership capabilities, designing targeted training and mentorship programs, and fostering a culture of continuous learning to address the dynamic demands of leadership roles in a rapidly changing business environment.
Furthermore, as organizations embrace digital transformation and remote work models, HR professionals must adapt leadership development initiatives to the evolving needs of a dispersed workforce.
“It’s clear that the expectations of business and HR leaders continue to grow,” said Jeff Williams, Vice President of Enterprise and HR Solutions at Paychex. “In addition to competing in a tight labor market, macroeconomic pressures like rising healthcare and other benefit costs are forcing many to rethink HR and benefits strategies.”
So, how do business leaders and HR professionals overcome these challenges? Especially when the survey also shows that 64% of companies said they spend over 570 hours a year and at least 11 hours per week on HR administration, and annual spending for the largest business is as high as $350,000 on HR tasks such as processing payroll, administering benefits and tracking time.
Well, they are turning to AI. In fact, nearly all leaders expect to use AI in 2024. Leaders expect to use AI to automate workflows, grow sales, manage business intelligence analytics, support customer service, strengthen IT operations and screen resumes.
The prospect of automating workflows is particularly appealing, as AI can streamline repetitive and time-consuming tasks, thereby increasing operational efficiency and allowing employees to focus on more value-added activities. From sales to customer service, AI is seen as a tool to augment human capabilities, providing data-driven insights that can inform decision-making, personalize customer interactions and optimize sales processes.
Integrating AI into business intelligence analytics allows leaders to extract meaningful insights from vast datasets swiftly. This empowers them to make informed, data-driven decisions, identify trends and adapt strategies in response to dynamic market conditions.
The intention to use AI in IT operations underscores the role of technology in maintaining a robust and secure digital infrastructure. AI can contribute to the proactive monitoring of systems, identifying potential issues before they escalate, and automating routine maintenance tasks. This not only enhances operational resilience but also allows IT teams to allocate their expertise to more complex challenges.
The use of AI in screening resumes aligns with the growing importance of talent acquisition and workforce optimization. Automated resume screening processes can help identify top candidates more efficiently. This reduces time-to-hire and enables HR teams to focus on strategic aspects of talent management.
“Our study also found that organizations are spending more than a quarter of the average 40-hour work week on administrative HR tasks, costing them significant amounts of time and money,” said Williams. “To offset these costs, almost all respondents said they will lean on emerging technology like AI to lighten the load on them, their employees, and the bottom line.”
The survey by Paychex yielded responses from business and HR leaders in U.S.-based companies employing five to 500 employees. The survey was conducted online by Bredin Inc. from August 1-29, 2023.
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