Latvia’s Human Resources Department Falls Short in Compliance Role

Underutilization of HR Departments in Business Decision-Making

A recent study has revealed that Latvia’s human resources departments are not being fully utilized in business decision-making, with potentially serious consequences for compliance. The survey found that one-fifth of Latvian employers (20%) rely solely on their personnel management department for HR-related duties, without involving them in key business decisions.

Key Findings

• 8% of companies include HR managers in board meetings
• HR departments are not being utilized to provide valuable insights and solutions based on staff needs and business plans
• The study’s findings suggest that the role of human resources specialists in Latvian companies is not reflective of their importance to business development.

Budgeting for HR Management

The survey revealed that a significant proportion of employers struggle with budgeting for HR management. In 83% of cases, separate budgets were allocated for HR needs, but:

• 53% of surveyed employers admitted to lacking sufficient funds
• The highest reported allocation was just 5% of turnover
• Almost half of companies allocate less than 1% of their turnover to personnel management

Low Investment in HR Functions

Low use of technology in HR processes is also prevalent, with only:

• 41% of employers using at least one technological tool to ease personnel management processes

Consequences of Underinvestment

The study’s authors warn that outdated systems, lack of data analytics skills, and modern technological solutions prevent HR specialists from effectively addressing pressing challenges such as:

• Stimulating employee engagement and motivation
• Attracting new talent
• Retaining existing employees