HR Trends to Watch in 2025: Insights for Your Business

As we look ahead to 2025, there are several emerging HR trends that will significantly impact how businesses attract, engage, and retain talent.  We’ve identified some key areas to keep an eye on as we head into the new year.  We hope these insights spark ideas for keeping your workforce engaged, aligned, and supported.

1. Recruiting: Adapting to a Talent Shortage

While companies are actively hiring, finding quality candidates remains challenging. The talent shortage is expected to continue and is being driven by factors such as low birth rates, a wave of baby boomer retirements, a widening skills gap, and low labor participation due to caregiving responsibilities. Many potential workers are staying home to care for children or elderly family members, which is further tightening the labor market.

In response, we’re seeing a rise in part-time workers, outsourcing to external service providers, and contracting with individual consultants. This trend is likely to continue as companies adapt to the scarcity of full-time talent. By embracing flexible talent strategies, businesses can stay competitive in this tough hiring environment.

2. Turnover: Continued Focus on Retention

With 20% of employees actively seeking new jobs, turnover will remain a major concern in 2025. Pay is an essential factor, yet managing salary expectations sustainably will require ongoing market research and benchmarking.  Companies that fail to benchmark pay accurately may find themselves losing valuable employees to competitors.

Smart businesses are also investing in creative, cost-effective benefits as a valuable retention tool. Lifestyle incentives such as flexible hours, remote work options, and extra holidays can have a strong and positive impact. Additionally, turnover remains high within the first two years of employment, so it’s important to ensure meaningful engagement early in the employee lifecycle.

3. Onboarding: Extending Support Beyond Day One

Employee turnover doesn’t just happen in the long term—about 30% of new hires leave within the first 90 days. 2025 will see a trend towards onboarding that spans beyond day one and across the entire first year of employment.  This will include regular check-ins, structured feedback, performance metrics, and developmental support.

When new employees feel connected and supported, they are less likely to leave within the early months and are more likely to stay engaged and productive over time.

4. Effective Management: The Role of Leaders is Evolving

One area where businesses often fall short is in having effective managers. Nearly half of employees believe they lack strong managerial support, and the C-suite agrees that more skilled managers are needed.  As AI takes over many routine tasks, managers will be freed-up to focus on team cohesion, empathy, and fostering a supportive workplace culture. 

The most sought-after managers will be those who prioritize emotional intelligence, facilitate team collaboration, and emphasize talent development.  Managers who can build emotional connections across hybrid teams will continue to be essential to driving engagement and productivity.  Businesses that invest in developing these soft skills in their managers will gain a competitive edge.

5. Hybrid Work: Striking a Balance

Hybrid work has emerged as a “sweet spot” for engagement, with employees splitting their time between the office and remote work.  Employees working in a hybrid environment report higher satisfaction than their fully remote or onsite counterparts.  Flexibility remains the #1 reason employees stay with a company, and hybrid work models offer the ideal balance for most.

When employees can work from their preferred location, they’re typically more engaged, less burned out, and more likely to stay with the organization.  Fully remote workers, on the other hand, are less likely to feel connected to the team and are prone to lower levels of engagement. 

6. Reskilling and Upskilling: Preparing for the Future

As the skills gap widens, continued learning will be critical to preparing employees for the future.  Reskilling and upskilling initiatives are increasingly being integrated into workflows with digital and hybrid learning formats making ongoing development accessible to all employees.  Organizations that invest in skill-building will remain competitive and empower employees to grow within the organization. 

Looking Ahead: Preparing for 2025

As you can see, recruiting challenges, high turnover, the need for effective managers, and the rise of hybrid work models will reshape how you manage your teams in 2025. Embracing these trends will not only help attract and retain talent but will also foster a culture of innovation and resilience.

If you’d like more personalized insights or support as you navigate the changing HR landscape, our team is here to help. Please don’t hesitate to reach out for guidance on how to implement these strategies in your organization.

Best regards,
The Renewed HR Team

Resources:

Gallup - State of the Global Workforce 2024 - Survey; Indeed - Workforce Insights 2024 - Survey; PWC – The Way Work in 2025 – Survey; Forbes – Preparing for 2025