Every organization is being impacted by disruptive breakthroughs, radical thinking, and new business models. As a result, businesses worldwide realize that they need a clear and relevant purpose for the coming year if they want to attract and keep employees.
Managing and retaining employees is one of the most crucial HR decisions in today’s highly competitive market. As the workforce is evolving, so are employee expectations, with demands for better people experiences and heightened job satisfaction. These aspects have outlined themselves as the most pressing HR challenges that leaders and businesses must now look out for in 2025.
Recommended Read: The One-place Guide to HR Challenges and Solutions
HR Challenges In 2025
1. Prioritizing employee wellbeing and mental health
Mental health and resilience will no longer be merely buzzwords in 2025. As the barrier between work and personal life blurs, HR leaders, emphasize employee well-being and mental health. Companies will be required to invest significant sums of money in improving employee well-being and ensuring that they remain resilient and confident in the face of new challenges and opportunities.
Employee well-being has evolved beyond physical well-being to include the development of a holistic well-being culture. Studies from Forbes have identified the top seven pillars of holistic employee well-being:
- Physical well-being
- Career well-being
- Financial well-being
- Social well-being
- Community well-being
- Emotional well-being
- Purpose-driven well-being
2. Making accountability a core part of your workplace culture
In the workplace, accountability means that people are accountable for their decisions, actions, and results. It rises in lockstep with increased staff productivity and dedication. As a result, a high-performing workforce is produced.
The first step toward increasing workplace accountability is to overhaul your culture so that accountability is a natural part of it.
- Create standards for how you’ll track employee productivity to ensure that they understand they’ll be held accountable for their work.
- Set weekly goals and deliverables to keep employees motivated to do assignments on a consistent basis.
- Above all, be sure you’re following your own set of rules.
Minda Zetlin, an author, speaker, and columnist at Inc., gave some excellent advice:
“Perhaps the best way to create a stand-up organization is to lead by example. Make sure employees understand what you expect of them and that you’re holding yourself to the same high standard. Then, follow First, make First, make through on your promises, own up to your mistakes, and give feedback even when it isn’t easy.”
3. Adapting to a hybrid work model
Industry experts predict that a successful hybrid work environment will be relevant in 2023 as well, even as pandemic fears fade. According to a poll conducted by Nasscom and Indeed, around 70% of IT organizations are attempting to make the hybrid model work. Working remotely increased employee satisfaction for 66% of respondents, according to the survey.
Organizations may have different definitions of “hybrid.” For example, some employees may come to work a couple of days a week or every other day. Other businesses may simply require face-to-face meetings on a quarterly basis. Hybrid arrangements try to bring the best of both worlds together.
4. Winning the talent war: Using Al & technology to recruit
HR departments are required to employ AI to seek and hire the proper individuals to navigate the new and competitive struggle for talent, in addition to remote recruitment, interviewing, and onboarding. In 2022, HRIS will progressively use AI in their daily operations, and HR departments will follow suit.
Artificial intelligence is already being used to screen resumes for the most compatible candidates. During the initial screening process, chatbots may ask applicants typical questions. However, even though AI helps speed up the hiring process, there are still a number of issues to be addressed, like discrimination and unequal hiring practices caused by AI prejudice.
5. Creating a more productive workforce
Since the start of the COVID-19 epidemic, an increasing number of people have been compelled to work from home, finding it challenging to maintain productivity in those unusual circumstances.
And, as the pandemic fades and more people return to work, achieving the same level of productivity as before appears to be a difficult aim for many. Using staff management or employee monitoring software to track productivity can help improve quality and time management at work.
6. Automating routine tasks
HR should be able to add value to the strategic areas by automating the administrative tasks that have been holding them back. According to the McKinsey Global Institute, existing technology has the potential to automate 56 percent of all human resource functions.
With HCM automation, there will be more opportunities to mentor and educate employees and focus on career planning and development, which will have a direct impact on employee engagement and retention.
Technology, on the other hand, cannot replace problem-solving, teamwork, communication, or listening. Therefore, human resource specialists are required to offer a distinct human viewpoint and a deep understanding of people to the table, which is crucial in developing work relationships.
7. Being well-versed with people analytics
Organizations will no longer be able to delay the implementation of people analytics in 2022. While there have been some positive developments, there is still much more work to be done. HR’s key priorities include analytics, virtual working technology, and updated learning platforms.
Accept a shift in thinking from intuition to data-driven decision-making: Incorporated policies have relied heavily on intuition, prior experience, and a general gut feeling. However, HR and leaders may make more confident decisions with the help of people analytics.
Train HR teams in analytics, strategy, and value generation: 60% of CEOs and EVPs see HR as more of an administrator than a value generator, but 74% of CHROs disagree. Training and implementation in people analytics can assist in bridging this gap.
Make sure there’s a culture of constant listening: Transparent communications and gaining buy-in from the entire organization for continuous listening are two ways to maximize the value of your people analytics investment.
8. Mandating an all-in-one cloud-based HR software
HR employees will be able to focus on learning one core application for employee management using one-view integrated applications rather than learning numerous new hr software platforms.
Furthermore, having a central site for employee communication reduces communication gaps and information loss. Finally, cloud-compatible software will maintain track of business processes and protect businesses from data loss.
9. Mapping out ideas for positive change management
Change anxiety is reported by 54% of the 274 HR leaders questioned by Gartner on their 2022 goals. In fact, according to a Gartner study, little day-to-day adjustments – new teammates, a new boss, tiny process or system shifts – are 2.5 times more common and 2.5 times more exhausting for employees than large revolutionary changes.
HR must build trust among employees, in their supervisors, teammates, and leaders, to assist them in accepting change. Employees that have a high level of trust have a 2.6 times greater ability to accept change.
Second, HR must assist in the development of team cohesion. Employees who work in well-cohesive teams, who listen and care for one another, have nearly twice the capacity to absorb change as those who work in low-cohesion teams.
10. Achieving measurable DEI progress
As per the same Gartner’s research, 69% of companies say workforce diversity and inclusion (D&I) is a strategic objective, yet HR still has trouble holding the company accountable for D&I results. Many well-intentioned D&I initiatives are programmatic, person-specific, or centered on a single experience or event.
Furthermore, most firms discover that defined D&I indicators are either ignored or deprioritized in favor of other business objectives.
