Main conclusions
Insufficient involvement in business decision making
A fifth of Latvian employers (20%) entrust the personnel management department with duties related to human resources management exclusively, without involving them in business decision-making. In rare cases, i.e., only 8% of employers included HR managers in the board. Within the board meetings compensation, organizational culture, mission, diversity, and talent management - topics that most directly affect the company's human resources and their well-being – are discussed. An experienced HR specialist, familiar with the staff, could be able to represent and offer the most relevant solutions, based on the specific needs of the employees of the particular company, whilst also considering the business plans. However, the potential of this resource is not fully utilized.
The role of personnel management specialists in Latvian companies does not reflect the real importance of human resources in the company and in business development
Insufficient budget
In 83% of cases, Latvian employers have separated and allocated a budget for the needs of human resources management; however, approximately 53% of the surveyed employers admit that they feel a lack of funds for HR, especially in the trade sector, where even 80% of employers reported insufficient funding. The highest reported allocated personnel management budget reaches 5% of the turnover.
Almost half of the companies allocate less than 1% of the company's turnover to personnel management
Low use of technology
Among the surveyed employers, only 41% use technological tools in HR processes
In Latvia, low use of technology in HR management processes can also be observed. Only 41% of surveyed employers use at least one technological tool to ease personnel management processes. Since on average only 0.85 full-time personnel specialists are employed in Latvia for every 100 employees, the introduction of modern technologies can be decisive to facilitate and optimize processes - starting with recruiting, onboarding, and ending with releasing.
Often, insufficient budget, outdated systems, lack of data analytics skills, and modern technological solutions, prevent HR specialists from effectively dealing with the most pressing challenges among employers - stimulating employee engagement and motivation, attracting new and retaining existing employees. For reading more and discovering how to improve these and other aspects affecting HR management processes in the company, download the full research (available in Latvian language only).
