2025's Must-Focus Areas for HR and Leadership
As we enter 2025, the HR landscape continues to evolve rapidly. I often tell new HR professionals enrolled in my HR Foundations Program (a 7-module online HR training program with a comprehensive resource library) that HR was much more straightforward when I started over 20 years ago. On the plus side though, HR is now a recognized and in-demand organizational function, whereas it was sometimes still considered a secretarial or clerical position when I started.
Navigating the HR and leadership world now requires a lot of knowledge and diligence. Over the past several weeks, I have compiled a list of what I see as the top 2025 HR and leadership focus areas to be aware of and prioritize.
Are you ready for 2025? Here are five key focus areas that will significantly impact workplaces in the coming year:
1. Get Ready for the Ever-changing Legal Landscape
State-level legislation is constantly evolving, impacting key areas like sick leave, pay transparency, AI restrictions, and paid family leave. This requires what feels like constant updates to your organization’s handbook (Need help with your handbook? Check out handbook services here).
Gone are the days of reviewing and updating the handbook every few years. Annual updates are now the norm. Be sure to regularly review and update your employee handbook to ensure compliance with the latest state and federal laws. Get support from an HR consultant, attorney, or someone who is experienced in creating inclusive, people-centered policies and with knowledge on how to ensure your organization complies with state, federal (and sometimes even local) regulations.
Here’s a brief handbook update checklist (Download a comprehensive handbook audit checklist here.)
Sick Leave: Review and update your sick leave policy to comply with state and local laws.
Pay Transparency: Ensure compliance with any pay transparency laws in your state.
Artificial Intelligence (AI) Usage: Develop and implement a clear policy on the ethical and responsible use of AI in the workplace.
Paid Leave: Review and update your policies on paid time off, including parental leave, family leave, and medical leave.
Parental Leave: Many organizations implement parental leave if they operate in a state that does not have a parental/medical leave program.
Other items to prioritize in your handbook:
Values: Define them and talk about what they mean.
Benefits: The handbook is a starting point for ongoing employee benefits education.
Expectations: Get clear on expectations around civility, respect, and how we treat each other at work.
E-Verify (Where applicable) and Form I-9s: Some are projecting we will see an uptick in Form I-9 audits these next few years.
2. Prepare for the Great Stay (and Ongoing Competition in Hiring)
While the "Great Resignation" may have subsided, some economists say the "Great Stay" has emerged. Due to retiring Boomers and low birth rates, although the labor market is cooling, it will still be competitive to hire employees, especially paraprofessionals, experienced professionals, and management positions. Employee retention remains a top priority, especially for high-demand roles. With
Recruiting, hiring, and onboarding require an ongoing investment of time and resources. Here are a couple of tools I continue to find are helpful in finding and keeping qualified employees.
Sourcing: Inviting people to apply for positions - this is time-consuming but highly effective.
Onboarding Program: Create an onboarding program that goes beyond orientation and creates connection, builds community, sets expectations, and supports ongoing growth and learning. The quality of onboarding is directly linked to employee retention.
3. Invest in AI Training
Employers are increasingly investing in AI-powered technologies to streamline HR processes, improve decision-making, and enhance employee experiences. This includes AI-powered recruitment tools, benefits tools, performance management systems, and employee engagement platforms.
AI saves me roughly 1-2 hours a day! Primarily in helping me avoid overthinking and spending too much time on wordsmithing. Although there are many other ways to use AI to save time and enhance productivity.
AI training is a key area of investment for organizations this year. If you don’t have a large training budget, here are ideas to build AI skills in your organization:
Scope out AI and training offered by your current software service providers. Leverage the resources you already have to help build skill in using AI.
Support an employee learning circle, led by someone who is a skilled, knowledgeable early adopter of AI to host a structured learning group among employees.
Start with a policy that ensures the protection of confidential information and a process for seeking approval before using AI.
4. Plan for Ongoing (Equitable and Transparent) Pay and Benefits Adjustments
Pay and benefits offerings continue to drive employee decisions, especially in light of inflation over the past several years.
According to the Society for Human Resource Management (SHRM), projected pay increases for 2025 are expected to average 3.5% in 2025 (adjustments were around 4% in 2023 and 3.6% in 2024). Additionally, the cost of employer-sponsored health insurance premiums is projected to increase on average by 10%.
Creating a financial plan that addresses ongoing year-after-year pay adjustments and rising benefits costs is essential for maintaining a sustainable and rewarding compensation program. It's also important to focus on pay equity and transparency in your communication efforts. Employees want to know how pay and benefits work – providing transparent and frequent communication can help.
5. Focus on Inclusivity, Flexibility, and Career Development
Flexibility and hybrid work are here to stay. Even though several large corporations are mandating return to office and in-person work only, offering flexibility and hybrid (or even remote) work is a key competitive advantage for nonprofits and small businesses. Employees are continuing to prioritize flexibility, work-life balance, and career development opportunities in deciding who they want to work for.
Additionally, succession planning, career development, coaching, and training for employees and leadership are top priorities due to changes in labor force demographics, primarily with so many experience people retiring from the workforce.
Investing in employee growth and a culture of learning and development doesn’t have to be hard or expensive. Some low/no cost ideas include:
Implementing a shared resource folder for professional development tools, resources, and training opportunities.
Seeking out what your current software providers, associations, and other paid and low-cost resources provide in the way of training for your employees.
Check out LinkedIn Learning for a low-cost option.
Task Subject Matter Experts (SMEs) who are looking for growth opportunities to lead workshops and learning circles.
Create a career development toolkit for supervisors with checklists, examples, and templates.
Continuing to invest in DEI (Diversity, Equity, and Inclusion) is also crucial for fostering an evolving and innovative workplace. Studies show that organizations with strong diversity programs are 1.7 times more likely to be innovation leaders in their market and report 19% higher employee retention rates. Investing in and growing our DEI efforts helps create an inclusive space that attracts great people and boosts our overall performance (Deloitte).
Ready to kick off 2025 with a solid HR and leadership plan?
Book an HR strategy session for only $199, and receive:
Strategy Consultation: Up to 60 minutes of HR and leadership strategy consultation.
Year-End Compliance Checklist: A checklist of year-end HR closing tasks, including essential HR, compliance, and payroll tasks to complete at year-end.
Strategic Planning Guide: A guide to help you prioritize your HR and leadership goals for 2025.
Action Plan: An HR action plan and calendaring template to track your goals and action items.
