As we kick off a new year, new trends continue to shape the way we work. Here are a few to watch and ways to stay ahead in 2025.

AI TAKES THE HELM OF HR

Artificial intelligence (AI) is no longer just a buzzword. Today, it's an integral part of the workplace, impacting new areas such as HR. In 2025, AI will play an expanded role in hiring, engagement, and productivity. According to SHRM and The Burning Glass Institute, global investment in AI is projected to reach $200 billion, creating profound changes on how employers manage talent.

➡️The AI Impact:

Streamlined Recruitment. AI-powered tools will be used to automate repetitive tasks, such as screening resumes, scheduling interviews, and conducting initial assessments, resulting in reduced hiring timelines and mitigating unconscious bias.

Enhanced Engagement. Many businesses already use AI-powered chatbots and virtual assistants in their customer service efforts. According to Harvard Business Review, Research shows that it can also be used to improve the employee experience, increasing revenue by as much as 50%. AI-powered chatbots and virtual assistants can help HR teams with real-time employee support by answering questions, improving the onboarding experience, and customizing learning paths designed to fit employee skills and professional development goals.

Real-Time Data-driven Decision Making. While some businesses already use AI tools, usage is expected to increase in 2025. These tools provide deeper insight into workers’ performance, with analytics enabling companies to forecast trends and address areas that need improving, such as turnover rates. The time saved allows HR teams to redirect their focus toward long-term HR initiatives and on valuable personal interactions with employees.

🎯Action Steps:

• Equip your HR teams with the resources and training to integrate AI tools effectively.
• Focus on training and upskilling employees and developing strategies for integrating AI digital agents into human teams.
• Develop initiatives that balance technology with one-on-one personal connection.
• With new technology, new regulations are sure to follow, so stay informed on new developments in this area to stay compliant.

➡️➡️READ MORE: Your HR Checklist for Q1 2025 is Here!

SKILLS-BASED HIRING REDEFINES RECRUITMENT 

Research shows that a skills gap hinders performance. As businesses face widening skills gaps—70% of leaders say this challenge hinders performance—2025 will see a pivot to skills-based hiring. Traditional benchmarks, such as degrees and years of experience, will give way to assessments of specific, demonstrable skills.

➡️The New Normal:

Redesigned Hiring Process. Employers are updating roles and rewriting job descriptions to emphasize skills, moving away from traditional qualification requirements.

Skills-based Training and Upskilling Initiatives. Upskilling and reskilling will take center stage as employees adapt to rapidly changing demands in the workplace.

🎯Action Steps:

• Create a strategic plan for hiring that emphasizes current and future skills needed for your workplace.
• Invest in training programs and adopt assessment tools that evaluate real-world skills.

THE HYBRID WORK EVOLUTION

Hybrid work, where employees split their time between the office and remote locations, is here to stay. As employers seek greater flexibility and cost-efficiency, they will increasingly rely on a mix of full-time employees, freelancers, and contractors.

🎯Action Steps:

• Team Charters. According to a recent Gallup study, the most successful hybrid teams create charters that define how they collaborate and improve their team approach. Create a team charter and regularly evaluate how it is working.
• Hybrid Strategies. Develop strategies for managing a blended workforce, including creating policies for onboarding, performance management, and inclusion of hybrid workers.
• Inclusive Policies. Ensure remote and hybrid workers have equal access to benefits, resources, and engagement opportunities.

EXPANDED BENEFITS 

Today’s workplace spans a number of generations each with different priorities. According to an EY study, the youngest employees of Generation Z, for example, named paid time-off and performance-based incentives as their top two priorities, with a tie for third in health and wellbeing benefits and flexible schedules. Employees of the Baby Boomer generation, 46% want compensation to reflect the cost of living followed by performance-based incentives.

As demographics continue to change, expect new options in employee benefits. According to a SHRM Employee Benefits Survey, the number of benefits employers offered to employees increased last year by 23%. In addition to core benefits, such as healthcare, PTO, and retirement options, employers also offered education, family care, and volunteering benefits, as well as a growing number of niche benefits, such as grandparent leave. With so many unique benefit options, employers will be challenged to select the right mix of benefits for their employees and their business

➡️What’s Changing:

Expanded Offerings. From mental health support to financial planning assistance, benefits are becoming more tailored.

• Survey employees to determine the benefits that are most important.
• Offer customizable options to meet diverse employee needs.
• Review benefits benchmark studies to understand the latest trends in employee benefits.
• Seek expert guidance to assemble a comprehensive benefits package.

PURPOSE OVER PAYCHECK

Millennials and Gen Z workers want more than a paycheck. They seek purpose, belonging, and alignment with company values. In 2025, purpose-driven workplaces will become the norm, helping employers attract and retain mission-focused talent.

🎯Action Steps:

• Embed social responsibility into your core business strategy.
• Use surveys and forums to gather feedback and make improvements.
• Showcase your mission through storytelling and transparent reporting.
• Align your employer brand with purpose-driven ways to connect with value-driven talent.

ADAPTING TO NEW COMPLIANCE DEMANDS 

From AI regulations to state-specific labor laws, 2025 will bring a wave of new compliance challenges, and employers should remain vigilant about their responsibilities.

➡️Areas to Watch:

AI Regulations. New laws that address potential challenges such as unintentional bias and data privacy.

State Mandates. Monitor state-specific changes such as minimum wage increases, compliance training mandates, and paid leave requirements.

Immigration Policy Changes. Prepare for more changes in the U.S. Immigration policy, including updates to H-1B visa programs and stricter compliance checks.

🎯Action Steps:

• Conduct internal compliance audits and partner with compliance experts to stay ahead of regulatory changes.
• Leverage technology to track evolving mandates.
• Review all federal, state, and industry regulations and requirements that apply to your business.

FUTURE-READY WORKPLACES 

Are you ready for 2025? The workplace of the future demands agility, innovation, purpose, and a people-first approach. By adapting to new changes - from advancements in tech, changing demographics to new laws, and shifts in the economy - employers can create resilient future-ready workplaces.

➡️➡️READ MORE: How to Put the Human Back Into HR

💥HR SUPERHEROES FOR A SUPER 2025💥

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About Propel HR. Propel HR is an IRS-certified PEO that has been a leading provider of human resources and payroll solutions for 25 years. Propel partners with small to midsized businesses to manage payroll, employee benefits, compliance and risks, and other HR functions in a way that maximizes efficiency and reduces costs. For more information, visit propelhr.com