2025 HR Trends: What to Look Out For This Year

Posted on 23 December 2021
(Updated 20 December 2024)
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Over 2025, we anticipate further transformative developments in HR strategy, technology, and the role of HR within organisations.

Trend #1: Prioritising Wellbeing with Actionable Strategies

Wellbeing has transcended being a buzzword, firmly establishing itself as a core HR focus. Following years of increased awareness around mental health, many organisations are now grappling with translating attention into meaningful action.

According to MHFA England, 70% of managers still face organisational barriers to effectively supporting staff wellbeing. These challenges include rigid company policies, heavy workloads, unsupportive workplace cultures, and inadequate training for managers.

In 2025, HR teams will need to shift from symbolic gestures like one-off webinars to embedding holistic wellbeing programs into the fabric of workplace culture. Tight budgets will require HR professionals to maximise the impact of limited resources by harnessing employee feedback and people data to guide initiatives.

The rise of hybrid and remote work continues to create complexities for wellbeing programs. Although working from home can reduce stress for some, it also makes wellbeing issues less visible. HR teams must proactively monitor employee wellbeing through regular feedback, comprehensive wellbeing programs, and tools that support mental and physical health.

From promoting work-life balance to offering counselling services and gym memberships, organisations with robust wellbeing programs will see gains in productivity, morale, and retention. Ensuring these programs are data-driven and inclusive will be a top priority in 2025.

Trend #2: Deepening HR Integration with Business Operations

As businesses adapt to dynamic landscapes, the integration of HR into core business processes will continue to grow. By leveraging people analytics and workforce insights, HR will increasingly play a strategic role in organisational decision-making.

HR Information Systems (HRIS) remain pivotal in providing real-time access to employee data, enabling organisations to identify skill gaps, enhance workforce planning, and align talent strategies with business goals.

Streamlining these processes with integrated HR software is critical for 2025. A single source of truth simplifies data audits and facilitates faster, data-driven decisions. This level of integration empowers HR to not only enhance workforce efficiency but also directly impact the organisation’s bottom line.

Ruth Billen, CFO of Bridewell, highlights this importance:
“A single source of truth is critical. Having a platform that everyone can use enables accurate business decisions based on reliable data.”

Read Bridewell’s case study with xcd to learn how the xcd people platform supported their exponential growth.

Trend #3: Navigating the AI Revolution Responsibly

Generative AI adoption among HR leaders doubled from 19% in mid-2023 to 38% by early 2024, according to Gartner. In 2025, this trend is expected to accelerate as organisations leverage AI to streamline processes like answering routine employee queries, managing talent pipelines, and personalising learning and development.

However, with great power comes great responsibility. AI implementation must be approached cautiously. Concerns about bias in algorithms, data security, and ethical accountability remain critical. While AI can efficiently analyse CVs or recommend training, human oversight is necessary to prevent bias and ensure compliance with data protection laws.

The challenge for 2025 will be integrating AI in ways that enhance HR processes without compromising fairness, security, or employee trust.

Trend #4: Continued focus on Diversity and Inclusion 

A very important HR trend for 2025 was for HR leaders and employers to challenge and target inequalities in the workplace and adopt new methods to make the workplace and employment equal for all of their employees.

A pivotal HR trend for 2025 is to continue the work which many organisations started over the last year in making diversity and inclusion a priority in all aspects of a business or organisation, but to look deeper and beyond surface level assumptions or token gestures.

For example, we recently delved into what behavioural science and experiments tell us about why traditional methods of increasing diversity and building an more inclusive culture aren’t effective, as well as exploring the alternatives that have been shown to make a real difference.

Additionally, menopause was a hot topic in 2023 due to reports of ‘glacial government progress’ and ministers blocking a proposal to make menopause a protected characteristic under the Equality Act. This spurred many organisations to explore how to implement a menopause policy in their workplace, to ensure their people were supported and not stigmatized.

The Fawcett Society also shone brought attention to the challenges parents face in the workplace, as the ‘motherhood penalty’ was found to have driven 250,000 women out of their jobs. Organisations like Pregnant Then Screwed have garnered attention on platforms like LinkedIn due to their campaigns for better maternity and paternity leave so that working parents no longer have to choose between their careers and their families.

Therefore, HR’s focus for 2025 should be looking for opportunities to innovate and update your workplace, in the interest of creating a fair culture, retaining talent, and setting yourself apart from other employers as a workplace that is ahead of the curve in how you value your people.

Trend #5: The Working Model Debate Continues

The debate over working models—remote, hybrid, or in-office—remains unresolved. While some employees thrive in office environments, others value the autonomy of remote work. Many HR professionals are concerned about the link between Return to Office mandates and employee turnover.

Research from late 2023 revealed that Return-to-Office (RTO) mandates often harm employee satisfaction without significantly improving organisational performance. HR teams in 2025 will play a critical role in advocating for balanced approaches that align business needs with employee preferences.

Flexible, data-backed strategies will be key to creating inclusive work environments that support both productivity and employee wellbeing.

 

Trend #6: Self-Service For a Workforce with Agency

As the role of HR shifts into more strategy focused decision-making over administrative assistance in organisations, self-service has become a necessity to manage employee data.

A key HR trend for 2025 is the increase in self-serve HR tech, as HR teams, particularly HR leaders, will not have time to tend to day-to-day administrative processes of HR and payroll as the role of Human Resources changes.

HR software is an invaluable tool to free up time for HR teams as HRIS software platforms can automate administrative processes and provides employees with the capability of being in control of their own data.

Enabling and empowering employees to input their own data not only reduces HR and payroll workloads significantly but increases transparency in operational processes like payroll and performance-related progression. Effective self-service HR software will be an easy-to-use, all-in-one platform which is easily accessible for all employees both remotely and in the office.

The xcd people platform offers a feature-rich, self-service HR software which combines HR and payroll solutions. xcd’s cloud-based platform enables employees to input their information, including personal details, timesheets and employee feedback and more, wherever and whenever from a dedicated mobile app. 

Enabling employees to input their own personal data and permissions has the additional benefit of ensuring organisational compliance with GDPR guidelines.

Trend #7: Configurability

We predict that while the turmoil of post-pandemic life is beginning to settle, the memory of it has left many organisations wary of their lack of flexibility.

A 2025 HR trend will be HR teams looking to make sure their processes and strategy can evolve with unforeseen events, new legislation, and culture advancements.

A key player in this will be an organisations HR technology, where perhaps they remember being unable to report on covid related sickness or make customisations as remote working became necessary.

So if your organisation is planning to switch to a new HR software provider this year, a solution that not only provides functionality for the present, but also the ability to continue doing that in the future through configuration should be top of the list.

With almost limitless configurability, xcd is built to evolve with your organisation and grow with you in the long-term, negating the need for costly vendor changes or upgrades. On a granular level, everyday processes, reports, and dashboards can be tailored according to your organisations changing needs and workplace trends.

“The xcd system has allowed us to build a global system that is accessible to all our employees and managers to manage their requirements all in one place. We’ve been able to configure many different modules to meet our unique requirements.” – Denise Moss, Human Capital Project Manager at Ninety One

Read the full case study with Ninety One.