2025's Must-Focus Areas for HR and Leadership
As we enter 2025, the workplace continues to evolve rapidly. Some of these shifts are exciting and much-needed while others are more complicated and unclear.
I often tell people enrolled in my HR Foundations Program (a self-paced online training program and resource library offering those handling HR duties in small businesses and nonprofits a quick way to gain essential HR knowledge) 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 still largely considered a secretarial/clerical position when I started.)
“With our working worlds changing, staying ahead of the curve in HR and leadership focus areas requires...well, focus...and navigating through a TON of information out there!”
That's why I've spent the past couple of weeks analyzing the latest shifts and best practices to bring you this list of the top 5 HR and leadership focus areas for 2025.
Are you ready? Let's dive in!
Here are five key HR and leadership focus areas that will significantly impact workplaces in the coming year:
1. Get Ready for the Ever-changing Legal Landscape
State-level legislation continues to increase in complexity, impacting key areas like sick leave, pay transparency, Artificial Intelligence (AI) restrictions, and paid family leave. State and local compliance updates require what feels like constant updates to your organization’s handbook (Need help with your handbook? Check out handbook services here).
Here’s a brief handbook update checklist for 2025 (Download a comprehensive handbook audit checklist here.)
Sick Leave: Review and update your sick leave policy to comply with applicable 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, non-discriminatory, 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 are implementing paid parental leave if they operate in a state that does not have a paid 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 over these next few years.
2. Prepare for the Great Stay (and Ongoing Competition in Hiring)
While the "Great Resignation" has slowed down, some economists now talk about the "Great Stay." With more retirements and low birth rates, the labor market, though cooling, remains competitive. Hiring will be especially tough in healthcare, skilled trades, math and science fields, management roles, and jobs needing prior experience.
Retaining employees, especially in high-demand roles, is a key priority. Recruiting, hiring, and onboarding will continue to need significant time and resources.
Here are a couple of focus areas to help with hiring and retention:
Sourcing: Actively invite people to apply for positions—it's time-consuming but very effective.
Onboarding: Develop an onboarding program that goes beyond basic orientation. Focus on creating connections, building community, setting expectations, and supporting ongoing growth and learning. Quality onboarding directly impacts 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.
Your employees are likely already using AI at work, and the benefits are significant. AI saves me about 1-2 hours daily, especially by preventing overthinking and speeding up tasks. There are many other ways AI can enhance productivity and save time.
Investing in AI training is crucial for organizations this year. If your training budget is limited, consider these ideas to build AI skills in your organization:
Explore the AI and training options provided by your current software service providers. Use these existing resources to help build AI skills.
Create an employee learning circle led by an AI-savvy early adopter to host structured learning sessions for employees.
Implement a policy to protect confidential information, prevent bias and discrimination, and establish a process for AI usage approval.
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%. (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%.
Developing a financial plan to manage annual pay adjustments and rising benefits costs is crucial for a sustainable and rewarding compensation program. Additionally, prioritize pay equity and transparent communication. Employees want to understand how pay and benefits work, so providing clear and regular updates is key.
5. Focus on Inclusivity, Flexibility, and Career Development
Flexibility and hybrid work are here to stay. While some large corporations are mandating a return to the office, offering flexibility and hybrid (or remote) work is a key advantage for nonprofits and small businesses. Employees prioritize flexibility, work-life balance, and career development opportunities when choosing where to work.
Succession planning, career development, coaching, and training for employees and leaders are also top priorities due to demographic shifts and many experienced workers retiring.
Investing in employee growth and fostering a culture of learning doesn't have to be costly. Here are some low or no-cost ideas:
Implement a shared resource folder with professional development tools, resources, and training opportunities.
Utilize training options from your current benefits or software providers, associations, and other low-cost or free resources.
Consider LinkedIn Learning as a budget-friendly option.
Have Subject Matter Experts (SMEs) seeking growth opportunities lead workshops and learning circles.
Create a career development toolkit for supervisors, including checklists, examples, and templates.
Continuing to invest in Diversity, Equity, and Inclusion (DEI) is essential for fostering an innovative workplace. Organizations with strong diversity programs are 1.7 times more likely to be innovation leaders and have 19% higher employee retention rates. Enhancing DEI efforts helps create an inclusive environment that attracts talented individuals and boosts 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.
