11 HR Trends For 2022: Driving Change And Adding Business Value

AI is omnipresent, and a diverse, complex workforce can either propel businesses forward or hold them back. Traditional tactics for managing teams just won’t cut it anymore.

To help their organizations thrive under these conditions, HR must embrace these disruptions and craft strategies that enhance technological advancements with a human touch. This year’s HR trends edition dives into how companies can harness disruption for growth, resilience, and success.

Let’s explore the 11 exciting trends we’ve identified as the best opportunities to seize in the midst of disruption.DOWNLOAD HR TRENDS 2025 REPORT

Theme 1: Technological transformation is the new business reality

Technology and AI are no longer a future trend—they’re the current business reality, transforming how organizations function at every level. The pace of change continues to accelerate, making the effective integration of technology and AI critical for organizations to stay competitive.

This tectonic shift requires a strategic rethinking of roles, skills, and processes, prompting HR to consider how these transformations reshape the organization, workplace, and people management. Beyond adopting new tools, HR must focus on instilling a mindset of innovation, agility, and antifragility in their employees to take full advantage of these tech advancements.

1. From AI adoption to AI adaption

There’s no doubt AI is disrupting companies and industries. The accelerated adoption of generative AI (GenAI) has quickly changed how jobs and processes are performed. Employees now use AI to help them with their work (often without letting their employers know) and many worry their roles will become obsolete because of AI adoption. This uncertainty is compounded by the fact that AI is still in its infancy and evolving daily, with no clear picture of how the future of work will unfold or what the next iteration of AI will bring.

Any advice will be obsolete when the next generation of AI is released. Regulatory bodies are struggling to keep up with the realities of AI on the ground and company policies are similarly lagging behind. However, this lack of outside authority means organizations have agency over what happens next and how AI redistribution will shape innovation, productivity, and expertise.

HR has the unique opportunity to take control of these shifts as it prepares organizations for disruption through AI experimentation, rapid upskilling, job (re)design, and ensuring guardrails for safe organizational adoption. Strategic HR insights: Understand the risks and rewards of AI

Encourage experimentation and training to reap AI benefits

There’s untapped value in AI use to increase employee productivity. For example, a recent study showed that BCG consultants achieved a 40% increase in their quality of work by using ChatGPT. To unlock these gains, HR leaders must create an environment that encourages safe experimentation with AI, giving employees the confidence to explore its potential without fear of mistakes.

Often, employees hesitate to use AI not due to lack of interest, but because they don’t feel equipped to do so. Offering comprehensive training not only boosts their skills but also reassures them that instead of replacing them, AI is meant to augment their work and help them become more productive. Robust training can help employees adapt and thrive in AI-enhanced roles.

Establish an AI strategy—immediately

Although 79% of leaders agree that AI adoption is critical to remain competitive, 60% admit their company lacks a vision and plan to implement it. Still, AI usage is already prevalent across organizations—three in four knowledge workers now use AI at work, with most of them (78%) using their own AI tools without any official guidance or oversight. This increases the risk of biased decision-making, security vulnerabilities, misuse, and potential privacy or intellectual property violations.

The fear of job displacement is also significant, with headlines often highlighting layoffs linked to AI, such as Meta cutting about 25% of jobs while increasing spending on AI infrastructure by $10 billion.

HR must collaborate with leadership to create a clear AI strategy that aligns with company goals and addresses the related risks and employees’ anxieties. Establishing governance systems to ensure responsible AI use, defining accessibility, setting boundaries, and monitoring AI-driven decisions will help AI become an asset, not a liability. An AI strategy focused on transparent communication about its role, potential, and impact on specific roles alongside a strong focus on reskilling can allay fears and empower employees to see AI as a tool for growth rather than a threat. HR actions to take: Guide the workforce through the shift to AI

This is a new frontier, and HR can seize the opportunity to become the expert in the room:

• Advocate for employees: Listen to and address employees’ concerns and needs. This includes providing support, guidance, and resources to help employees navigate changes that come with AI.
• Spearhead the development of new AI playbooks: Lead the creation of playbooks for responsible AI implementation.
• Embrace continuous learning: HR professionals must improve their understanding of AI technologies and their impact on work so they can continue to support employee productivity.
• Communicate transparently: Maintain open, honest communication with employees about the impact of AI on their roles to build trust and minimize worry. This will help employees understand the benefits of AI and ensure they feel supported during transitions.

2. AI in HR: Overhyped or underestimated?

Despite the excitement around AI, many HR professionals haven’t integrated it into their workflows. While 34% of marketing departments regularly use GenAI, only 12% of HR departments have adopted it, and just a third of HR leaders are exploring potential GenAI use cases. This indicates that HR is potentially missing out on opportunities to become more productive and innovative in its key functions.

Low AI adoption in HR is particularly concerning, given HR’s critical role in leading this organizational change. In fact, 76% of HR professionals believe their organization risks lagging behind if it doesn’t adopt AI technology within the next 12 to 18 months.

So, what’s causing this lag? Reasons why HR may be slow to adopt AI include insufficient digital skills, uncertainty about which tools are suitable, limited resources to audit or correct AI algorithms, and a lack of clarity on AI’s potential HR benefits.Ultimately, whether AI in HR lives up to its potential or is simply written off as overhyped will depend on how well HR departments utilize it to transform key functions, from recruitment to talent management and beyond. Will HR take the lead or fall behind? Strategic HR insights: Lead AI practices by example

Embrace responsible AI adoption within HR

HR departments are rooted in compliance and risk management, making them more measured and risk-averse. This has helped protect the organization from risks like biased decision-making, legal liabilities, and data breaches but has also slowed the adoption of new technologies like B2B SaaS. As a result, HR may be missing key opportunities to improve efficiency and effectiveness.

Instead, HR should use its risk management expertise to establish strong AI governance, ensuring the technology is used responsibly and protecting the company from potential legal and reputational harm.

However, HR should not shy away from AI adoption — it’s equally important to recognize that avoiding the technology entirely is a risk, too. Careful integration of AI allows HR to automate tasks, enhance employee experiences through predictive analytics, and optimize performance management. Striking a balance between risk management and embracing AI-driven opportunities is essential for HR to create impact and drive organizational success.

Build competence, confidence, and clarity with a well-defined AI strategy

A lack of digital competence, confidence, and clarity are the three main blockers of AI use for HR professionals. Only 41% of HR professionals have the competencies to keep up with HR digital transformation. When HR professionals lack digital skills, they are also less confident about using AI, and they’re unclear on how to effectively implement new tools in their roles.

To build both competence and confidence, HR leaders must prioritize digital upskilling and integrate AI into HR processes through hands-on learning. This approach helps employees gain practical experience with AI tools and learn how to effectively leverage these technologies to enhance productivity and decision-making across the organization.

Clarity in AI adoption starts with creating an AI strategy that outlines how HR should use the technology responsibly and effectively. This strategy should identify key areas where AI can enhance HR operations and prioritize ethical considerations such as fairness, transparency, and privacy. Leading organizations form an HR AI committee with experts in AI, HR, and legal to evaluate tools and establish best practices for using AI in HR. HR actions to take: Adopt an AI growth mindset

HR needs a faster pace of adoption to make sure HR practitioners don’t miss out on significant transformation opportunities:

• Learn how to use AI: Develop the skills to use AI in work and help enable others. Start practically integrating GenAI into work and develop a mindset of experimentation that uses AI to solve problems and make decisions with a human expert in the loop.
• Develop a risk framework for AI adoption: Create a risk framework for AI adoption in HR that offers a clear roadmap for safe and effective use and gives HR practitioners clarity and confidence in how to use AI.
• Monitor AI performance: Analyze AI performance and outcomes to ensure the technology meets productivity and quality benchmarks. Regular assessments and adjustments can optimize AI applications for an increasingly wider array of tasks and maintain alignment with organizational goals.

3. A tipping point for the skills mismatch

As new technologies emerge, the skills needed in the workplace are rapidly shifting, leading to a growing mismatch between current employee capabilities and future requirements. Organizations are struggling to clearly identify and anticipate the skills needed in the medium and long term, thereby failing to proactively address the skills gap. This leaves them vulnerable to decreased productivity, innovation, and competitiveness in the evolving market.

Furthermore, employers believe 44% of workers’ skills will be disrupted by 2030, and that six in 10 workers will require additional training before 2027. Solving the skills gap is imperative for HR, as 70% of company leaders believe their organizations’ skills gap negatively impacts business performance.

Bridging such a severe skills gap requires organizations to fundamentally rethink their approach to workforce management. To succeed in these disruptive times, leaders must identify crucial skills needed both today and in the future, anticipate how to utilize these skills as work evolves, and develop more effective strategies for attracting, nurturing, and retaining talent with the right skill sets.

Time is running out and such strategies must be in place before the end of 2025 if organizations hope to avoid massive operational disruptions as a direct result of skills mismatches. Strategic HR insights: Pivot to a genuine skills-based approach

Identify core skills gaps

HR must identify available skills and related gaps, and establish development opportunities and skills-based hiring practices that specifically address these gaps. This requires a deep understanding of where the organization is headed and the capabilities needed to support this journey. To target the right areas, HR should collaborate with business leaders to forecast future skill requirements based on industry trends and technological advancements.

Prioritizing training investments where they will yield the quickest and highest returns, particularly in AI-driven areas, can help achieve rapid progress.

Adopt a skills-based approach to talent management

Effectively identifying, developing, and deploying skills is key to overcoming skills mismatches. This is at the heart of a skills-based approach to building a workforce that can adapt to changing demands and drive organizational success.

Many organizations today view a skills-based approach as simply removing degree requirements from job postings. While this has resulted in a four-fold increase in the number of businesses posting job ads without degree requirements, only one in 700 hires annually is actually a ‘skills-based’ hire. 

Effective skills-based talent management requires HR to clearly define the specific skills that drive success in each role, both now and in the future. The next step is to create strategies to attract and develop talent that can meet these demands.

HR must align critical practices like talent acquisition, career development, and performance management with this approach. By focusing on skills, organizations can better allocate talent to projects, redeploy skilled employees to different roles or projects as priorities shift, and help employees explore new career paths.

Linking performance and rewards to skills development also keeps organizations future-focused and encourages employee growth.

Integrate technology solutions and implement talent marketplaces

Since technology advancements are currently outpacing skills development, any strategy developed to close the skills gap must be underpinned by technology. AI and automation can standardize skills taxonomies, infer skills from job roles and training, help maintain an up-to-date skills inventory, and identify emerging gaps and training needs.

Talent marketplaces, which match internal talent to opportunities, offer an immediate solution to address skills gaps. These platforms boost agility by enabling flexible work models and internal mobility based on skills. However, despite 40% of executives believing AI will drive growth, only 26% of companies use talent marketplaces. 

In 2025, HR should explore tech solutions for skills-based mobility to maximize workforce potential. However, technology should support, not dictate, the strategy—this means HR must establish a skills-based framework before integrating tech solutions. HR actions to take: Implement skills-based hiring, upskilling and career development

To effectively address the looming skills crisis and prepare for AI-powered workplaces, HR should:

• Redesign job descriptions and hiring processes: Shift the focus from traditional degrees and qualifications to skills-based hiring. Implement skills-based assessments and interview techniques that accurately evaluate a candidate’s capabilities.
• Develop a comprehensive skills taxonomy: Create a detailed skills taxonomy that identifies both current and future skill requirements. This taxonomy will serve as the foundation for all talent management practices, helping HR align workforce capabilities with evolving organizational needs.
• Implement continuous learning programs: Launch learning initiatives focused on developing critical skills identified in the taxonomy. These should include both technical skills related to AI and automation, as well as adaptable “human” skills like critical thinking and creativity.

4. Blue-collar and “new-collar” jobs boom

Blue-collar and “new-collar” jobs are increasingly gaining traction among today’s workforce, as demand for skilled labor in both traditional trades and high-tech sectors continues to grow.

The blue-collar job market is once again booming with opportunities, higher pay, and increased interest from younger generations, especially in artisanal and technical fields. While the tech sector was cutting jobs, manufacturing job postings went up 46%. There is a high demand for skills that require physical labor and for people who can install and repair equipment, from elevators to power plants. Due to increasing college costs and student loan debts, we can also expect to see more and more youth choosing artisanal trades.

“New-collar” jobs, which require advanced skills in high-tech areas like AI and cybersecurity but not necessarily advanced degrees, are also on the rise. These jobs provide significant opportunities for skilled workers (often blue-collar workers) who have the necessary soft skills, or mindset to learn new skills through practical experience or occupational training.

What does this mean for HR and their organizations? The rise of blue-collar and new-collar jobs presents significant opportunities to reconsider work design. It involves rethinking the way these jobs are organized, including aspects like scheduling flexibility, job responsibilities, and the physical and technological tools workers use to perform their duties.

HR must develop strategies that focus on empowering and supporting blue-collar and new-collar talent through targeted recruitment, onboarding, and talent management practices while also investing in technologies that enhance their productivity and job satisfaction. Strategic HR insights: Level the playing field for all types of workers

Redefine employee value propositions for blue- and new-collar workers

Deskless workers make up 80% of the global workforce, yet they receive only 1% of business software spending, lack sufficient training, and have limited growth opportunities.

In a job market disrupted by new technologies, workers, especially younger ones, are prioritizing job stability, fair pay, and opportunities for upskilling over superficial perks and benefits that don’t meet their long-term needs. Gen Z, for example, is increasingly favoring stable sectors like government and healthcare, which offer security and purpose, and whose jobs are less likely to be displaced by AI.

HR leaders must redefine the employee value proposition (EVP) to reflect these changing priorities. Offering better pay, job security, and skills development opportunities can help attract and retain blue- and new-collar talent. Companies that successfully align their EVP with these needs can reduce employee turnover by as much as 69%.

Fix the fundamentals: Pay and job value

A key challenge in attracting blue- and new-collar talent is the ongoing pay discrepancy between them and white-collar workers. Historically, blue-collar roles have been undervalued, often because they don’t require formal degrees. However, with the rise of automation and AI, blue-collar workers are upskilling to meet growing demands for technical expertise. These roles are vital to infrastructure and customer-facing operations, yet their compensation often doesn’t reflect their value.

HR must address pay gaps by reevaluating the measurement of job worth. Providing fair wages, overtime pay, improved benefits, and flexible working conditions will ensure blue- and new-collar jobs are viewed as equally important and attractive, leveling the playing field and fostering long-term retention.

Skills-based hiring practices can help HR tap into a broader talent pool by focusing on practical skills over degrees, creating opportunities for those overlooked by traditional hiring.

Improve employee experience through technology

Technology developed for blue- and new-collar workers’ specific needs helps improve the employee experience (EX). Implementing accessible tools for training, performance management, and career development boosts engagement, productivity, and skills growth—key elements of retention. This is especially important for deskless workers, who often lack access to these resources and may feel disconnected from advancement opportunities.

Through strategic investment in tailored tech solutions, HR can empower these employees and create a more connected, efficient workforce. These tools help employees feel valued and supported, increasing their loyalty and reducing turnover. They also position the organization to attract new talent by offering a more modern and flexible work environment that promotes continuous development. HR actions to take: Attract and retain blue- and new-collar talent

To effectively attract and retain blue- and new-collar workers, HR must adopt a proactive and innovative approach that addresses the evolving needs of the workforce:

• Rethink job definitions and requirements: Adapt job descriptions to focus on skills rather than traditional qualifications. Rethink how work is defined and what the actual job requirements are. Create a strategic workforce plan to accommodate these shifts and focus on skills-based hiring.
• Implement grassroots talent initiatives: Engage with local communities and educational institutions to tap into new-collar and blue-collar talent pools. These initiatives help identify and connect with skilled workers who may not follow traditional career paths but still possess valuable skills.
• Understand the expectations of different generations: Understand generational differences in what is expected from the employment arrangement and workplace, including access to the right technology to effectively carry out the duties of new-collar jobs.

Theme 2: Shifting talent dynamics

Economic uncertainties, demographic shifts, and modern societal expectations are redefining the workplace. These changes have now reached a crossroads, with new expectations and work styles emerging across the workforce. Women continue to push for true equity in the workplace, and the presence of older workers is growing. With these factors at play, organizations face both challenges and opportunities in building a resilient and motivated workforce.

Understanding why all roads have led us here will help HR adapt to these shifts. More importantly, it will help their companies get ahead of these trends in 2025 and contribute to organizational success in the years ahead.

5. The golden age of the silver worker

Whether it’s because they cannot afford to retire or don’t want to retire, workers aged 75 and up comprise the fastest-growing segment of the workforce. Yet, current HR policies and office setups often overlook employees in this age group. Organizations typically lack flexible work options, ergonomic office designs, or benefits tailored to the workers who have chosen the path of ‘unretirement’. Employer branding also tends to focus on younger talent, neglecting the value older workers can bring. Despite this, retiree-age employees are here to stay, and their presence in the workforce will only grow.

Organizations that recognize this shift have a strategic opportunity. By accommodating the needs of silver workers, they can tap into new levels of productivity, facilitate knowledge transfer, and enhance team dynamics.

Just as early adopters of pay transparency gained a competitive edge, embracing the aging workforce now can position companies to lead in 2025 and beyond. Mature workers are looking for purpose and recognition of their value. Including them in the fabric of the business means capitalizing on their skills, strengthening generational diversity, and showing aging customers you respect their lifestyles and right to dignity. Strategic HR insights: Harness the power of an aging workforce for a competitive advantage

Acknowledge that older workers play vital roles

Workforce productivity improves when companies have a mix of workers of various ages and experience levels. Employers who hire older workers say that they consistently match or exceed the performance of younger hires. 

Yet, only 8% of organizations include age as part of their Diversity, Equity, Inclusion and Belonging (DEIB) strategy. Additionally, these companies tend to focus on creating programs that emphasize the similarities among generations—such as shared company values or collective goals—rather than addressing the unique needs and strengths of different age groups. As a result, older workers remain underrepresented or face ageism, and businesses miss the chance to fully benefit from their expertise and innovation.

Teams consisting of multiple generations accomplish tasks more homogenous groups usually struggle to. For example, Nike recently rehired Tom Peddie—a veteran executive who had been at the company for 30 years before retiring in 2020—to help restore relationships with retail partners after sales dropped. His return illustrates that older workers offer invaluable expertise and leadership, especially during periods of transformation.

Remove barriers to work

Forward-thinking HR teams can unlock aging workers’ potential by implementing policies that meet their unique needs. This starts with understanding what motivates them. For instance, the meaning and impact of their work often take precedence over traditional incentives like promotions. At the same time, offering flexible work options, such as part-time roles, project-based work, or phased retirement plans, can keep older workers who prioritize finances and compensation engaged.

Creating an inclusive workplace culture that values older employees’ contributions will enhance their sense of purpose. Additionally, HR should offer benefits and perks that address the diverse needs of employees at every stage of their careers, ensuring long-term engagement and productivity. An example could be comprehensive health plans that include mental health support for all age groups.

Promote lifelong learning and sustainable employment

Lifelong learning is essential to ensuring sustainable employment for all workers, especially those with more work and life experience. At 50, employees may still want to remain in the workforce for another 20 years or so, making continuous learning vital for career longevity. Offering continuous learning opportunities also enables physical workers to transition their careers to less physically demanding roles as they extend their working years.

HR can also create value by playing to the strengths of older employees through mentoring programs and knowledge-sharing initiatives. These initiatives encourage inter-generational collaboration, help bridge skills gaps, and support the ongoing development of organizational capabilities. HR actions to take: Extend policies across five generations

Supporting the inclusion and equity of mature workers gives organizations a unique opportunity to benefit from the most age-diverse workforce ever. HR can implement the following targeted approaches:

• Skills and mentorship across generations: HR should implement continuous learning programs to help older workers stay competitive, while encouraging mentorship between generations. In practice, this could involve pairing experienced employees with younger staff for skills-sharing sessions and providing training workshops tailored to different stages of an employee’s career.
• Tailored healthcare benefits: Partner with healthcare providers to offer health screenings and wellness checks for older adults. Build a workplace that accommodates diverse physical needs with features like ergonomic workstations, better lighting, and accessible facilities.
• Post-retirement work opportunities: Facilitate diverse post-retirement engagement by establishing a database of flexible work opportunities, including part-time, consulting, and volunteer positions. A ‘micro-goal’ program can match retirees’ skills with short-term projects or community initiatives, keeping them engaged and contributing.

6. The women’s equity effect

As we enter 2025, over 10% of Fortune 500 CEOs are women—a milestone that’s been a long time coming since the first edition of the Fortune 500 list. However, the progress of the past few years has begun slowing. Women have cracked but not shattered the glass ceiling, and considering that closing the gender equity gap would increase global GDP by a staggering 20%, there’s no reason not to push for further progress in this area.

Inflexible work practices and a lack of leadership opportunities remain critical issues. An astonishing 95% of women believe requesting flexible work will negatively affect their chances of promotion, and women hold only 28.2% of management positions globally. Employers also do not adequately address female workers’ health challenges. For instance, 67% of women who experience menopausal symptoms report a mostly negative impact on their work. Businesses have the power to contribute to meaningful change, make a lasting impact on gender equity, and reap the significant economic and cultural benefits resulting from a more inclusive and equitable workforce.

Forward-thinking organizations are leading the charge, demonstrating that fundamental change is possible with sustained effort. For instance, Starbucks reached wage parity for its U.S. partners in 2018 and continues to work towards this goal worldwide, setting a strong example for others to follow.

Yet, despite these efforts, progress in women’s equity cannot be taken for granted. Many organizations still lag behind, and without continued work, the gains made so far could stagnate. The question remains: Will other organizations rise to the occasion and capitalize on the impact of women’s equity? While some are already doing so, others must follow in order to drive both internal progress and broader societal gains. Strategic HR insights: Take the lead in championing women’s rights

Champion gender diversity in leadership

Companies in the top quartile for gender diversity are 39% more likely to financially outperform their competition, with this advantage growing over time. Building a gender-diverse workforce requires ambitious, measurable goals for gender diversity at all levels of an organization, especially within leadership. It also involves providing transparent progress reports to show genuine commitment to gender equity.

A culture of executive sponsorship, where leaders actively mentor and advocate for women—ensuring they have a meaningful voice and can consistently make an impact—is key to driving gender diversity and reaping its benefits.

Create an inclusive work environment

Cultural transformation is essential to creating an environment where women can truly thrive at every organizational level. This involves confronting the underlying biases that limit women’s leadership opportunities, such as unconscious bias, limited promotion opportunities, and career penalties for having caregiving obligations.

Strategic solutions include revising performance reviews, offering flexible work schedules, and establishing return-to-work programs for women after caregiving breaks. Leadership must champion gender-blind recruitment and promotion processes while also fostering transparency in pay and advancement criteria. This way, leadership can ensure equity in opportunities and compensation.

In 2025, forward-thinking organizations can address these issues with progressive policies. When companies prioritize women’s diverse needs, they create an environment where all employees feel valued, supported, and empowered to excel. This sets new standards for inclusivity, inspiring others to follow suit. HR actions to take: Focus on gender equity and women’s advancement

Now is the ideal time to introduce and effectively implement inclusive programs and policies that address the realities women face in the workplace. You can do so by: 

• Supporting women’s advancement: Develop targeted mentorship, sponsorship, and leadership development programs that help women advance into leadership roles. Establish KPIs to track progress and hold leadership accountable for gender diversity goals.
• Removing structural barriers: Ensure flexible work arrangements, normalize caregiving career breaks, and eliminate biases from performance reviews. Provide a supportive environment for women returning to work and offer development opportunities to help them advance.
• Fostering equal opportunities and providing resources: Implement transparent promotion frameworks with clear criteria and timelines. Encourage women to apply for senior roles and regularly review talent pipelines to address gender imbalances. Additionally, offer resources like menstrual and menopausal leave, mental health support, and fertility assistance while ensuring they feel empowered to use them without fear of stigma.

7. Looming organizational anxiety

Decreasing consumer confidence, ongoing economic uncertainty, and fears of underperformance fuel a sense of organizational anxiety—a pervasive fear that affects businesses and their employees. Fears of recession and high interest rates drive companies to pursue cost-efficient growth, which has resulted in over 135,000 job cuts in the tech sector alone. The impact of these developments trickles down to the workforce, resulting in anxiety-inducing watercooler talk.

Companies from Europe to South Korea are extending work hours to “inject a sense of crisis” into workers and managers and increase productivity. It’s working, though not in the intended way. In-office (79%) and remote (88%) workers feel pressured to prove their productivity and demonstrate their presence, exacerbating the very fears organizations are trying to quell.

Add to this a tighter job market and shrinking pay premium for job switchers, and we see the Great Resignation has given way to the Big Stay, where employees “nest” in their roles.

In 2025, the pendulum of the employer-employee relationship is expected to swing decisively back in favor of employers as economic pressures and job market uncertainties give companies more control. While this shift can stabilize businesses, it risks long-term employee disengagement if companies fail to address growing anxiety and maintain meaningful connections with their workforce. Strategic HR insights: Balance costs with employee support

Take a thoughtful approach to organizational rightsizing

“Jittery CEOs, eager to please Wall Street and their boards”, often bring immense pressure and risk to their companies. Spotify CEO Daniel Ek recently acknowledged that poorly managed layoffs can harm an organization’s performance.

HR has a key role in preventing their companies from overreacting and making excessive cuts. It must help strike a balance between creating a lean, cost-efficient workforce and preserving employee morale and the unique culture that defines organizational success. HR departments that engage in thoughtful workforce planning, targeted reskilling, and clear communication help foster a sense of stability and purpose among employees during uncertain times, ensuring their organizations remain resilient and adaptable.

Future-proof talent pools

Amid economic uncertainty, employees often focus on job security, leading to a more stable workforce. In 2025, this will allow HR to reevaluate and improve its talent management strategies without the usual pressures of high turnover.

Organizations can capitalize on this by investing in upskilling and reskilling high-performing employees. In fact, The Future of Upskilling and Employee Learning 2024 report reveals that 64% of direct managers, 67% of new hires, and 61% of individual contributors have average or lower skill levels.

This period is also a good chance to make tough but necessary decisions to part ways with underperforming staff, which can boost overall productivity and resource allocation.

Strengthen financial wellbeing to support a healthier workforce

According to a PwC study, 60% of full-time employees feel stressed about their finances—this figure is even higher than it was during the pandemic. The study also found that financial stress hurts sleep, mental health, and self-esteem, resulting in decreased productivity, lower morale, and burnout—all common factors in organizational anxiety.

Financial wellness programs are among the most effective tools for reducing this stress. By offering training that promotes financial resilience and helps employees make smarter short- and long-term financial decisions, organizations can boost employee wellbeing, reduce anxiety, and ultimately improve overall performance. HR actions to take: Create a supportive but performance-oriented workplace

To address organizational anxiety and boost employee wellbeing and productivity, companies must prioritize holistic wellness, transparent communication, and a performance-driven culture. They should:

• Implement people-centric work policies: Develop policies that promote positive work conditions, such as fair wages, reasonable hours, and job security. Offer programs that support physical, mental, and financial health to build resilience and help employees cope with uncertainty and change.
• Reward performance: Establish a culture that rewards performance by aligning individual performance with organizational goals and using a fair and transparent performance evaluation system to measure progress.
• Provide transparent communication: Promote clear communication through accessible communication channels to keep employees informed about company performance and future plans. Also, create open forums where employees can voice concerns and ask questions without fear of repercussion.

Theme 3: Tactics for the organization to thrive

The way organizations respond to disruptions in talent and technology will determine who will succeed and who will struggle in 2025. Businesses must focus on creating an adaptable, agile workplace and proactively develop strategies to anticipate future challenges and opportunities.

Effectively executing these tactics will be essential as businesses seek to harness disruption as a catalyst for innovation and growth. In adopting forward-thinking approaches, organizations can thrive by turning disruption into a driving force for reinvention.

8. HR execution is king

While strategic HR is often seen as the pinnacle of HR work, the execution of HR policies and initiatives at a tactical level is equally critical to organizational success. A brilliant strategy without effective execution is like a blueprint without builders—no matter how well-designed, its potential remains unrealized. Tactical HR teams bring strategic ideas to life, transforming them into actionable results and ensuring the success of people-related initiatives.

2025 will bring about a growing recognition that HR’s true impact is realized when strategy and execution work hand in hand to reinforce each other. Strategic HR provides direction and long-term goals, while tactical HR ensures these are implemented through well-executed policies, processes, and daily practices that resonate with employees at all levels. Strategic HR insights: Give tactical HR the tools and support to implement key strategic goals

Reshape the narrative of tactical HR’s importance

Effective tactical HR operates seamlessly behind the scenes, ensuring smooth operations without drawing attention to itself. Because of this, its contributions are often overlooked, leading to the perception that strategic HR work is more valuable than execution excellence.

However, poor HR execution can lead to serious issues. For example, Uber’s failure to address sexual harassment in 2017 led to significant damage to the company culture, the then-CEO’s subsequent departure, and several public reputation scandals.

Tactical HR mistakes can also impact a company’s bottom line. This was the case at VMware after its merger with Broadcom. The abrupt shift from a flexible remote-working environment to a push for a return to the office, coupled with layoffs, led to employee dissatisfaction and operation disruption, contributing to a $600M revenue drop the following quarter. Spotify’s poorly handled layoffs disrupted daily operations far more than anticipated, and so did some disastrously managed return-to-work policies. These examples underscore the critical need for strong tactical HR in driving business outcomes.

HR is most effective when it balances strategic vision with well-executed policies and processes. Teams that prioritize clear communication, thoughtful planning, and quick adaptation to challenges are the ones that deliver true value. 

To demonstrate tactical HR’s value, HR leaders should demonstrate how effective execution can drive business success. Sharing data and success stories highlighting how well-implemented policies prevent costly mistakes and boost engagement can showcase tactical HR’s role as a key enabler of growth and stability. This will ensure strategic initiatives don’t overshadow tactical HR.

Leverage AI to free up time 

According to Boston Consulting Group, a balanced human and AI strategy could boost HR productivity by 30%. One of the most significant impacts of GenAI in HR is the dramatic improvement in self-service capabilities. By offering conversational workflows through chatbots and tailored information, GenAI is making HR self-service tools more appealing and user-friendly.

GenAI accelerates content creation, streamlines onboarding processes, and improves recruiting engagement rates. These efficiency gains let HR professionals redirect their focus toward high-value, personal interactions with employees, ensuring the human touch remains in areas that matter most. Leading HR teams must strategically identify where AI can help them save the most time, so they can concentrate on value-adding tactical HR initiatives.

Innovate on a tactical level

With AI taking care of administrative tasks, HR can focus on innovation in tactical areas. This involves addressing the needs of neurodivergent employees, reshaping employee value propositions, and personalizing employee benefits. HR professionals can also spend more time helping line managers and improving employee experiences.

An integrated approach to managing people will help create cohesive people practices across the employee lifecycle, from onboarding to offboarding, resulting in less fragmented HR service delivery.

To achieve this, different HR teams should consider key people metrics like first-year attrition, performance, and onboarding time shared responsibilities. This collaboration fosters accountability and a better understanding of how HR collectively contributes to business impact on the strategic and tactical levels. HR actions to take: Maximize tactical HR impact through collaboration, skills, and sufficient resources

Collaboration, building diverse skill sets, and sufficient resources are key to maximizing tactical HR’s impact:

• Promote cross-functional collaboration: Encourage teamwork across HR specializations, such as talent acquisition, employee relations, and learning and development, to break down silos and create tactical solutions that address complex challenges.
• Build T-shaped competencies: Develop HR professionals with deep expertise in one area combined with a broad understanding of related HR functions and the overall business to facilitate collaboration with stakeholders outside of the HR function.
• Resource tactical HR teams effectively: Ensure tactical HR teams have the necessary resources, including time, headcount, software tools, and budget. Adequate staffing allows teams to manage workloads effectively, while the right technology streamlines different HR processes and procedures. With a sufficient budget, HR can successfully execute key projects and address business needs swiftly.

9. The embedded HR professional

As we look toward 2025 and beyond, HR’s role will become increasingly intertwined with business units’ core operations, a shift accelerated by the pandemic’s long-term effects. This will give rise to “embedded” HR, where professionals are not just advisors but integral parts of the teams they support.

93% of CHROs regularly attend board meetings, and 43% report an increase in their interactions with the board. However, a gap persists between HR’s strategic potential and its perceived contribution to business outcomes. For example, while almost 70% of CEOs agree that HR will be more important to business in the future, 63% would like a better understanding of HR’s role and 53% say HR doesn’t provide enough input and advice.

To close this gap, the HR function must embed itself into operational processes and the day-to-day decision-making of teams, ensuring HR solutions and policies are integrated with business processes and aligned with business goals. By working closely with line managers and other leaders, HR can help drive people excellence and enhance organizational effectiveness, employee engagement, and strategic business alignment. Strategic HR insights: Become part of the business value chain

Intentionally break down silos between HR and business

HR must shift from a support role to an integral part of business operations. To start, they should share key data—such as turnover costs, absenteeism, and engagement rates—with leaders to demonstrate the value of human capital. This is crucial, as there is a major disconnect between what leaders believe and what employees experience. For instance, 83% of top managers think their employees are “financially healthy”, while only 55% of employees agree.

HR can bridge this gap by using data-driven insights to break down silos and empower leaders to make informed decisions, becoming a strategic partner rather than just remaining a support function.

Manage HR’s reputation across the business

To be seen as a key driver of business success rather than just the ‘hiring and firing’ function, HR must start showing up differently within the organization by developing strong business acumen and being proactively involved in making and executing business decisions. Doing this successfully also requires rethinking business partnering—being a true business partner who participates in the business instead of just advising from the sidelines or reacting to others’ decisions.

One effective way to achieve this is to develop T-shaped HR professionals who possess both deep expertise in specific HR areas and a broad understanding of business operations, culture, data, and digital. This blend of skills will allow them to create tailored, people-centric solutions that align with organizational goals and drive business performance.

Establish a new working relationship with line management

HR responsibilities are increasingly moving to line management, with 55% of CHROs wanting to shift decision-making power in HR processes to line managers. However, while 80% of C-suite members believe their managers are able to manage employee relations issues, only 40% of HR managers share that view. Additionally, only 22% of HR professionals believe managers receive adequate training for managing employee relations.

HR should reframe its role and take a page from finance. Just like a financial controller is responsible for budgeting and setting the financial guardrails while individual leaders are responsible for managing their day-to-day budgets and spending, HR should set the people guardrails, equip managers with the necessary skills, and hold them accountable for driving people excellence within their teams. With the right training and support, line managers can take ownership of day-to-day people management while the HR function handles more complex issues. HR actions to take: Become HR and business experts

To truly embed themselves within the organization and create meaningful impact, HR professionals need to understand and master the nuances of the business. They should:

• Proactively upskill beyond core HR skills: HR professionals must deepen their business acumen, data literacy, and digital skills to more effectively contribute to strategic decision-making. Cross-department rotations will help them gain first-hand experience in various aspects of the business.
• Move away from generic HR programs: Collaborate with managers to develop initiatives that are specifically tailored to the unique needs of different departments or business units.
• Clearly define roles and responsibilities: Delineate the responsibilities of line managers versus HR. Ensure people management remains a core responsibility of managers, with HR providing support and guidance rather than taking over these tasks.

10. The antifragile worker

Interest rate uncertainty and high inflation will continue to create volatility in the financial markets well into 2025. The constant pressure of rising living costs, along with fears of job security and financial stress, exacerbates anxiety and burnout among workers.

Mental health issues affect about 15% of working-age people worldwide. Gen Z and millennial workers are particularly vulnerable, with 40% and 35% respectively reporting frequent or constant stress and anxiety and nearly half experiencing burnout at work. This has resulted in $1 trillion in losses annually due to depression and anxiety.

The concept of antifragility can help navigate these challenges. Unlike traditional resilience, antifragility doesn’t just withstand shocks. Rather, it actively gains strength from turmoil, capitalizing on disruptions and using challenges to grow in strength.

To create antifragile workplaces, organizations must recognize the link between wellbeing and productivity. HR must reshape workplaces to help current and future generations of employees thrive in a fast-changing world. This includes addressing social and structural factors affecting mental health, providing employees with the resources they need to succeed, building resilience, and removing barriers that prevent full participation from individuals with mental health conditions. By doing so, both employees and employers can benefit from stronger, more adaptable workforces. Strategic HR insights: Develop a workforce that grows stronger through challenges

Redefine HR practices to enable and support antifragile careers

Only 43% of workers say their organizations have left them better off than when they started. Constant change and overwork are taxing employees who are “always” or “often” feeling exhausted or stressed. More than four in 10 report feeling burned out at work.

Under these conditions, it’s not enough to support mental wellness and try to alleviate stress. Instead, HR needs to equip employees to become ‘antifragile’, empowering them with the tools to thrive not just in their current roles, but throughout their entire careers, no matter how challenging or unpredictable the environment may be.

For HR, the first step is to turn adversity into an opportunity for growth. Adaptable teams respond rapidly to new challenges and are energized by the experience, instead of being stressed or burning out. Open communication channels also help ensure everyone is aligned and ready to pivot when needed.

Organizations that promote a culture where failure is seen as a learning opportunity will encourage leaders, managers, and employees to embrace rapid iteration. HR can help turn every setback into a stepping stone for personal and professional growth by creating a safe space for risk-taking and learning. This fosters antifragility that extends well beyond any single job or role.

Prioritize upskilling, reskilling, and continuous learning

Companies that prioritize upskilling, reskilling, and continuous learning are laying the groundwork for antifragile teams. Having access to the latest knowledge and encouraging experimentation will drive the adoption of new technologies and skills as employees gain confidence in new ways of working. This focus on continuous learning helps workers evolve alongside industry trends, reducing vulnerabilities.

To support antifragility, HR can provide employees with various resources, ranging from online courses to mentorship programs. By rewarding curiosity and promoting personal and professional development, companies can ensure employees feel supported in their growth.

Another way of entrenching the idea of future-focused antifragility is through scenario thinking. When all layers in the organization explore different future possibilities, individuals, teams, and the organization as a whole can develop strategies to thrive when disruption hits.  HR actions to take: Lay the foundations for agile, skilled workers

Strategies to build an antifragile workforce create an environment where continuous growth and adaptability are prioritized, empowering employees to thrive throughout their careers:

• Upskill beyond technical skills: Focus on developing employees’ soft skills like adaptability, emotional intelligence, collaboration, problem-solving, and a growth mindset to support long-term employability. Equip employees to anticipate future challenges through scenario planning and encourage risk-taking and active experimentation through cross-functional projects and innovation labs.
• Re-evaluate performance and reward approaches: Recognize and incentivize resilience, continuous learning, and innovation, not just traditional outputs.
• Foster a safe environment for innovation: Create an environment where employees feel safe to experiment, take calculated risks, and learn from failures. Some examples are innovation labs, pilot projects, and cross-functional team collaborations.
• Encourage healthy work-life boundaries: Implement policies that provide employees with the time and flexibility to recharge, enabling them to maintain productivity and resilience over the long term.

11. Employee engagement 2.0

Over the past 25 years, engagement has become a focal point of HR strategy and practices, but the results have been sorely lacking. Since Gallup started measuring engagement in 2000, the needle hasn’t moved despite decades of HR policies and practices. Global engagement levels remain at 23%, indicating that these approaches are failing.

Today, employees who are not engaged or actively disengaged are costing $8.8 trillion in lost productivity worldwide. If HR wants to impact engagement and drive productivity, it needs to understand the real drivers of employee engagement and inform its approach to engagement with effective, evidence-based techniques. Strategic HR insights: Redefine engagement and what employees truly care about

Invest in leadership development and line manager enablement

The saying “people don’t leave businesses, they leave managers” rings truer than ever. Gallup data shows that 70% of team engagement variance is determined solely by the manager.

However, line managers also face numerous challenges that impact their effectiveness, such as heavy workloads (33%), balancing multiple responsibilities (22%), and insufficient resources/budget constraints (20%). When managers are stressed and under-resourced, they struggle to support and engage their teams.

HR must enable managers to do their jobs well, as this will trickle down to the rest of the workforce. Manager enablement is about focusing on all elements of the manager experience, equipping them with tools, development programs, and resources to help them succeed and focus on their direct reports. HR’s role is to streamline this process, measure management quality, and address gaps accordingly.

Put mechanisms in place to identify real employee needs

Highly engaged employees are three times more likely to feel heard at work (92%) than their highly disengaged counterparts (30%). However, surveys alone don’t make employees feel heard—seeing meaningful changes based on their feedback does. Unfortunately, making impactful changes based on employee feedback is still not the norm, and 86% of employees believe their organization doesn’t hear everyone fairly or equally.

HR must move past assumptions and adopt a deliberate employee listening strategy to uncover genuine insights. This goes beyond just conducting surveys; it’s about fully understanding, validating, and improving the employee experience within an organization. A robust employee listening strategy includes various feedback channels, such as information from 1:1 meetings, as well as stay and exit interviews. 

Armed with this information, HR can redesign the employee value proposition (EVP) accordingly and implement policies that ensure it’s truly reflected in employees’ experiences, creating a more engaged and motivated workforce.

Create ‘decent work’

Many organizations make desperate attempts to boost engagement through superficial perks and initiatives but fail to address deeper, structural issues that truly impact employee satisfaction. Without tackling real problems—like a lack of purpose, development opportunities, and transparent communication—these efforts inevitably fall short, and workers continue to feel disconnected, undervalued, and unsupported in their roles.

HR needs to focus on creating “decent work” with real drivers of employee engagement, such as fair pay, safe working conditions, and clear expectations. The shift from relying on relational agreements to establishing transparent, transactional exchanges gives employees purpose and allows them to thrive. By offering meaningful work environments that enable people to use their strengths, organizations can significantly boost engagement, productivity, and antifragility. HR actions to take: Equip managers and employees to do their jobs successfully

To empower both managers and employees to excel in their roles, HR must focus on providing the right tools, support, and clear communication:

• Support managers with development and automation: Equip managers with targeted development programs that enhance their leadership and people-management skills. Provide them with tools to streamline administrative tasks, freeing up time they can dedicate to coaching and employee engagement.
• Design balanced roles: Ensure roles are clearly defined with manageable tasks that are aligned with the employee’s skills and the organization’s needs. Benchmark these against competitors in the industry.
• Clarify employee contribution to company objectives: Ensure individual contributors understand how they contribute to the overall organizational strategy and goals to boost motivation.
• Communicate transparently and promptly: Foster trust by communicating changes openly and promptly. This will help employees feel informed and engaged throughout various transitions, keeping them connected and committed.

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Erik van Vulpen

Erik van Vulpen is the founder and Dean of AIHR. He is an expert in shaping modern HR practices by bringing technological innovations into the HR context. He receives global recognition as an HR thought leader and regularly speaks on topics like People Analytics, Digital HR, and the Future of Work.

Dr Dieter Veldsman

Chief HR Scientist Dieter Veldsman is a former CHRO and Organizational Psychologist with over 15 years of experience across the HR value chain and lifecycle, having worked for and consulted globally with various organizations. At AIHR, he leads research initiatives and develops educational programs aimed at advancing the HR profession. Dr. Veldsman is regularly invited to speak on topics such as Strategic HR, the Future of Work, Employee Experience, and Organizational Development.

Dr Marna van der Merwe

HR Subject Matter Expert Marna is an Organizational Psychologist with extensive experience in Human Resources, Organizational Effectiveness, and Strategic Talent Management. At AIHR, she contributes as a Subject Matter Expert, driving thought leadership and delivering insights on talent management and the evolving nature of careers. Dr. van der Merwe is a researcher, published author, and regular conference speaker, providing expertise in shaping future-forward HR practices.

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