The Loop

HR Trends for 2025

Filed under: Benefits

 We may be past COVID threats, but Bird Flu is peeking over the hedge. Some companies are well-adapted to remote and hybrid work models, but others have ordered employees back to work even after negotiating more fluid contracts. Both scenarios create potential headaches for HR personnel. From the increasing need for mental health resources, more compassionate management skills, and the threat of artificial intelligence (AI) taking over jobs, the following are trends HR will be facing throughout 2025.

Resilience

If there is a buzzword to characterize HR in 2025, it is “resilience.” According to a recent report by the McKinsey Health Institute, worker and management resilience is the key to adaptability and engagement in the coming years of growth and innovation. After all, growth and innovation inevitably lead to change, and many people do not respond well to change – even top performers.

However, McKinsey’s research reveals that workers with high levels of resilience are healthier, more engaged, and generate more innovative ideas than less-resilient peers. Taking cues from the past, Darwin’s theory of evolution may prove to be consistent with today’s work environment. In other words, soft skills such as adaptability may become more valuable than education and experience. Only time will tell, but in the meantime the best plan of action may be to strengthen resilience across the entire workforce, so that no one gets left behind.

Developing resilience immediately brings mental health resources to mind, but perhaps not the usual slate of therapy and medication. Mental health tactics for resiliency may include:

  • Cultivating mindfulness through meditation, positive thinking patterns, and self-care
  • Building strong social connections both at home and at work to help weather bad times and enjoy good times
  • Embracing new ways of thinking and working to encourage creativity and innovation
  • Fostering a resilient culture in which all workers feel valued, respected, and empowered
  • Developing personal compassion, tolerance, and forgiveness (everyone makes mistakes)

Bear in mind that using resilience as a barometer of performance does not excuse a toxic work environment. The goal isn’t to make workers tough enough “to take it” when dealing with abuse, harassment, prejudice, or other systemic issues in the work environment. Those problems need to be dealt with head on, not adapted to.

Resilience is an important skill to endure all that life throws at us – illness, financial setbacks, people who let us down, and disappointments at home and at work. It is the ability to perceive uncertainty or change as an opportunity, not a setback, and to think flexibly and creatively when approaching new situations.

Skills-Based Hiring

The confluence of a number of factors has led to a new demographic of resilient workers – Generation Z as well as disillusioned mid-career professionals. The rise of the internet platform for both commerce and influence, the increasingly high costs of attending college, and the disruption of educations due to COVID created a sense of resiliency and innovation in what kind of jobs people want and how they want to live.

In turn, this means that worker skills and capabilities are becoming more valued than  educational background or work history. This has placed a new focus on what workers can do, rather than where they do it or how they learned those skills. The timing for this trend couldn’t be better, as it has expanded the talent pool of skills that have been in short supply. In fact, a recent survey found that the share of employers who focus on skills-based hiring swelled in 2024: 81 percent compared to only 56 percent in 2022.

Personnel Management

While rank and file workers may be skills-based, management roles are changing as well. Resilient teams will need to adapt quickly to rapidly changing technologies, processes, industries, and customer expectations. Team leaders will need to know how to foster this adaptability by building emotional connections, trust, and communication skills to facilitate collaboration even more than individual task management. Much of this new training can be acquired through people analytics that synthesize worker skills, performance, engagement, learning acumen, and adaptability.

Some companies are fostering a more positive management environment by instituting simple changes to accommodate more workers, such as:

  • No more 8 a.m. meetings; meeting-free mornings; or meeting-free Fridays
  • Acceptance of individual workstyles and preferences
  • Encourage and listen to ideas, no matter where they come from
  • More flexible leave options and the ability to work remotely as needed (even in non-remote work environments)
  • Offer both managers and workers training to support the development of soft skills like self-awareness and regulating emotions
  • Organizational support such as clear, streamlined processes and abundant resources
  • More focus on ways to engage task-oriented workers (e.g., shelf stockers, cashiers, factory floor workers)
  • Fewer executive management ranks and more people managers over process managers

Hybrid Work Tempered, But Not Vanishing

Some companies have issued ultimatums for workers to return onsite full-time; others have adapted to a fully or partially remote staffing model. Moving forward, new start-ups that feature intellectual capital will at least consider the value and cost-savings of fully or partially remote staffing, so the model is here to stay and may grow even more in the future.

Data collected during the remote-work years points to a higher work-life balance without sacrificing productivity. However, these advantages are often offset by massive investments in commercial real estate and onsite technology that few large employers are willing to sacrifice. There is also the challenge of keeping a remote workforce engaged in company initiatives and in the pipeline for promotions. Balancing these issues will continue to challenge HR departments in 2025 and beyond.

AI In HR

While artificial intelligence is slowly replacing workers in jobs ranging from customer service and manufacturing to accounting and graphic design, the one area that would seem impervious to AI is HR. But that isn’t the case. AI is rapidly transforming HR functions such as recruitment, performance management, employee engagement, and talent development.

Fortunately, this is an area where AI is useful for handling rote tasks, such as administrative duties, predictive analytics, and feedback analysis. This allows HR professionals to spend more time on high-touch, high-value activities, such as personal interactions, mediating conflicts, investigating complaints, and training. Given the recent political movement to stamp out diversity, equity, and inclusion (DEI) programs, HR departments may be further burdened by the repercussions.

All in all, human resources challenges promise to continue in 2025.

 


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