7 Trends That Will Shape HR in 2025
From building a culture of civility to upskilling en masse, here’s what HR professionals can anticipate in 2025.
The world of work is changing at a staggering pace. From changes in talent acquisition practices to the rise in people analytics to the can’t-be-talked-about-enough impact of AI, 2025 is sure to be a year of new opportunities and new challenges driven by the need for the workforce to be increasingly flexible and skilled to meet market demands. With that in mind, SHRM experts shared their insights on seven major trends that are likely to impact HR in the year ahead.
1. Skills Over Degrees
Momentum is surging around skills-based hiring, which is the idea that workers’ skills and capabilities matter more than their educational background or work history. Focusing on what employees can do—not where or how they learned to do it—widens the talent pool, helps solve skills shortages, and boosts retention, says Justin Ladner, senior labor economist at SHRM.
The practice is catching on quickly: In 2024, 81% of employers practiced skills-based hiring, up from 73% in 2023 and just 56% in 2022, according to research from TestGorilla, a talent assessment platform.
“The ongoing labor shortage provides a strong incentive for firms to search for ways to expand their ability to recruit and retain workers,” Ladner says.
Disruptive events such as the pandemic and the subsequent labor shortages, as well as the rise of AI, have taught employers that an adaptable workforce is one of the most critical ingredients in future-proofing an organization.
Therefore, says SHRM CHRO Jim Link, SHRM-SCP, companies are seeking employees who are persuasive, open to learning, and able to communicate well.
“We used to think about [business] sustainability in terms of things,” Link says. “Going forward, we’re going to think that way about people. Do we have the right people with the right skills and enough workforce numbers for today and tomorrow?”
Do we have the right people with the right skills and enough workforce numbers for today and tomorrow?—Jim Link, SHRM-CP, SHRM CHRO
Some employers will also continue to rethink college degree requirements for certain roles. An analysis by Indeed found the number of job postings requiring at least a four-year degree fell to 17.8% in January 2024, compared with 20.4% in 2019. Of employers who eliminated degree requirements for some roles, 73% said they had successfully hired one or more candidates who previously would not have qualified, SHRM’s 2024 Talent Trends research reveals.
2. Evolving Skills, Thriving Workforces
The need for updated skills in the workplace is accelerating—so quickly, in fact, that new employees may need more training even before they’ve finished onboarding, says James Atkinson, vice president, thought leadership, at SHRM.
Technology is driving this quickening pace of upskilling and reskilling. Quite simply, in a world where AI exists, employees’ skills can’t remain static. In fact, 83% of HR leaders believe upskilling will be essential for workers to remain competitive in a job market shaped by AI, SHRM data shows.
As more organizations pursue AI, machine learning, and other advanced technology, they are taking stock of their employees’ skills and trying to “match that, as best they can, to what their future needs are likely to be,” Link says.
Additionally, Atkinson says, employers are realizing the importance of determining how employees can work with technology in a role that’s being transformed or one that’s just emerging. Organizational growth and employee expectations will also continue to drive upskilling and reskilling.
“The fact that customers are more demanding means companies increasingly need to develop new products, and employees need to be more productive to keep up,” Atkinson says.
Employees are equally eager to stay competitive by updating their skills. According to a 2024 PwC survey, almost half of employees say that having opportunities to learn new skills is a key consideration when deciding whether to change employers. “This need for these workers to stay at the top of their game coincides with organizations’ needs to pull in that talent,” Atkinson says.
There’s more to explore and implement. While a majority of employers plan to upskill or reskill employees, according to a 2024 Express Employment Professionals-Harris Poll survey, just 29% of organizations have taken proactive measures to train and upskill employees who work alongside AI, SHRM research finds.
3. People Analytics Shaping the Future
In a still-tight talent market, organizations must find smart, effective ways to encourage long-term employee loyalty. A potential solution is people analytics, the science of using data on employee performance, skills, engagement, and sentiment to predict and shape the future of the workforce.
People analytics can reveal a variety of insights. Combing through employee engagement survey data, for example, can help companies determine employee morale or recurring reasons for departure or turnover. People analytics can also identify potential learning and development opportunities, such as skills gaps that may hinder forward momentum.
Link also sees people analytics as an opportunity for employers to provide interventions such as mental health resources before such issues become a crisis.
Currently, HR professionals most commonly use people analytics to assess employee retention and turnover (82%) and for recruitment, interviewing, and hiring (71%), according to the report The Use of People Analytics in Human Resources (SHRM, 2023). Some organizations also use AI to identify potential high-performing employees using profiles based on past successful employees. That way, Atkinson says, “They can focus on retaining those employees and helping them grow and thrive.”
Going forward, Atkinson expects more employers to use people data for predictive modeling around workplace planning. “It’s not where a lot of organizations are right now, but it’s an exciting opportunity for the future,” he says.
4. The Concern Rise of Incivility
If the world seems less courteous or empathetic lately, you’re not imagining it. SHRM launched its civility campaign in 2024 precisely because of “rising concerns about an incivility in society that’s bubbling up and overflowing into the workforce,” Atkinson says.
The SHRM Q3 2024 Civility Index survey of more than 1,600 U.S. workers, conducted Aug. 27-Sept. 4, 2024, proved these concerns to be well-founded. Workers said they experience 190 million acts of incivility per day, 58% of which happen in the workplace. The biggest drivers of incivility were:
Political viewpoints.
Disagreements on social issues.
Generational gaps.
Racial or ethnic differences.
The direction of U.S. society.
Politics was firmly in mind when SHRM launched its civility campaign in what was the biggest year in history for global elections. “Half the world’s population went through elections in 2024,” Atkinson says. “And we know with elections in general that you’re pitting parties against each other and pulling out differences.”
Those feelings won’t just disappear in 2025. “Almost half of your employees are going to be disappointed, frustrated, mad,” he adds. “As a leadership team, as an HR professional, you need to recognize that.”
Atkinson recommends having those difficult conversations rather than simply making controversial topics taboo. “It’s not about removing conflict entirely; it’s about how you manage the conflict when it occurs,” he says. “Be clear about what workplace culture you want, and make sure that your leaders model it.”
Be clear about what workplace culture you want, and make sure that your leaders model it.—James Atkinson, SHRM vice president, thought leadership
Communication problems are often at the root of rising incivility, Atkinson says. Take social media, for examples, which has made it easier for people to “more quickly engage in uncivil sentiments and not take time to think through alternatives or consequences.”
On top of that, generational differences are making workplace conversations even more difficult, experts say. Older employees may be uncomfortable with younger employees’ desire for more transparent and personal conversations, while younger workers may take constructive criticism as a personal attack. Remote workforces can also make it harder for employees to forge personal connections.
Tackling incivility in the workplace, though, is paramount. Workers who rate their workplaces as uncivil are three times more likely to be dissatisfied with their job, SHRM research has found. In the year ahead, employers may want to try strategies such as encouraging respectful dissent, creating diverse teams, and providing conflict resolution training.
Employers are also increasingly offering workplace etiquette classes, ResumeBuilder reports, with appropriate workplace conversations being at the top of the training agenda.
5. The Benefits of Financial Wellness
There’s growing momentum among smart employers to thoughtfully consider the role they play in employee wellness. While physical and mental health have been top of mind for years, financial health is now part of the conversation.
It’s become crystal clear how deeply employees’ financial wellness impacts their personal and professional lives, Link says. As a result, more employers are beefing up financial wellness benefits. In 2023, just 14% of U.S. employees had access to financial planning benefits at work.
By 2024, that number doubled to 28%, according to PNC Bank’s Financial Wellness in the Workplace Report. By the end of 2026, nearly half of employers are expected to offer a comprehensive financial wellness program, according to Transamerica.
“Financial wellness is moving from an enhanced benefit to a primary benefit,” Link says. That’s critical, considering that more than half of employees say they are stressed about their finances daily or multiple times a day, according to a survey of 5,000 employees by financial services company ZayZoon. The most in-demand financial wellness benefits, according to Morgan Stanley research, are:
Assistance with retirement preparation.
Help with financial planning.
Guidance on goals-based retirement investment planning.
Heading into 2025, employees also increasingly expect financial benefits that are personalized to their needs. Younger employees, for example, may want help saving for a down payment on a home or managing student loans. Meanwhile, Baby Boomers prioritize financial education, and Millennials and Generation Z favor personalized financial coaching and planning, says Ragan Decker, Ph.D., SHRM-CP, manager of Executive Network and Enterprise Solutions research at SHRM. While Baby Boomers, Gen Xers, and Millennials all agree that saving for retirement is their top financial goal, Gen Zers’ top priority is boosting their credit score, PNC Bank’s research found.
“This highlights the need for organizations to consider the unique financial needs and preferences of different generations to better support the workforce,” Decker says.
6. AI’s Impact on Talent Strategy
As AI usage becomes ever more ubiquitous, an increasing number of organizations are harnessing this still-evolving technology to transform talent acquisition. However, that’s a relatively recent development—of the 1 in 4 organizations that use AI to support HR-related tasks, nearly two-thirds only began doing so in 2023, according to SHRM’s 2024 Talent Trends: Artificial Intelligence in HR report.
In other words, most organizations have yet to tap into AI’s vast number of potential applications. Those who are, though, most commonly put AI into play to support recruitment, interviewing, and hiring by streamlining or increasing efficiency. What does that look like in practice?
Nearly 2 in 3 companies use AI to develop job descriptions.
More than 42% use it to customize or target job postings to specific groups.
Around two-thirds use AI to review or screen applicant resumes, communicate with applicants during the interview process, or automate candidate searches.
“By streamlining these tasks, we’re really seeing employees who feel they’re able to be more efficient and effective, and as a result, they’re more engaged,” Link says.
The use of AI can also be a boon to improving diversity in the applicant pool, SHRM’s research shows, with nearly 30% of companies reporting that AI allows them to better tap into underrepresented talent networks.
In addition to talent acquisition, HR professionals are drawing on AI to increase and encourage workforce knowledge and development, identify gaps in employee knowledge, and track employees’ learning and development progress.
“The best employers today are basically offering very large learning management systems (LMSs) so people can tackle any type of learning that they want to have,” Link says.
That is key, he explains, because many younger employees are no longer content to wait years to gain exposure to certain skills or experiences. Employers that give these workers the knowledge they seek may be able to hang onto them longer.
7. Post-Election Regulatory Shifts
New regulations are introduced every year, but on the heels of a presidential and congressional election, 2025 could give HR professionals a bit of whiplash. Not only are new policies likely to come to the forefront, but it’s possible that existing ones may be scaled back or eliminated altogether.
For example, the new presidential administration could result in either a less or more pro-labor stance, says Emily M. Dickens, J.D., SHRM chief of staff, head of government affairs, and corporate secretary. If a worker shortage persists, she adds, “it will be very interesting to see how the government handles worker visas to allow workers into the country.”
Potential laws, regulations, and enforcement actions that could affect HR professionals include:
The possibility of intensified workplace enforcement and immigration raids.
The Trump administration letting stand any court decision striking down the Biden administration’s overtime rule or independent contractor status rule. On Nov. 15, 2024, a district court struck down the overtime rule nationwide. Another district court followed in its footsteps, determining on Dec. 30, 2024, in a separate case that the rule should be vacated.
The National Labor Relations Board taking a less aggressive approach on existing workplace rules once it has a Republican majority.
State laws and regulations on paid leave, artificial intelligence, and captive audience meetings.
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