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HR Trends 2025: What Business Leaders Need to Know

ExtensisHR7 minute read
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Quick look: As 2025 unfolds, a new wave of human resources trends is emerging. To remain competitive and successful, business leaders must stay informed and embrace these changes. The ExtensisHR 2025 Trends Report highlights the top five shifts, complete with actionable insights from industry thought leaders. Below is a quick recap of the report, which can be downloaded using the form below.


The HR industry will undergo another wave of transformative change in 2025. From adopting artificial intelligence (AI) to evolving benefits packages to meet employees’ changing needs, HR professionals are at the forefront of shaping the future of work. ExtensisHR’s 2025 Trends Report will guide you through critical industry developments, featuring insights from several subject matter experts:

Read on for a brief overview of the five key trends covered in the report. For a deeper dive, you may download the entire report.

Trend 1: Artificial intelligence and technology

Once just a futuristic idea, AI is here and quickly changing the way people work and live. AI technology can simplify a multitude of tasks, from automating repetitive work processes to getting you out of a traffic jam on the way to the office. AI tools already prove valuable to employees, with 75% reporting they use AI-powered technology at work and 90% claiming it helps save time. But how can HR experts make the most of these cutting-edge applications? Our 2025 HR Trends report dives into three ways AI is helping businesses stay competitive and enabling employees to do more strategic work:

  • AI for workforce advancement: Many people worry that AI will replace jobs. Instead, it offers powerful potential to optimize and elevate technologies already in place. For instance, an organization using a legacy applicant tracking system (ATS) may use parts of that program but find the resume-screening process time-consuming. An AI tool can help streamline reviewing resumes, without the need for replacing the entire system.
  • Considerations for AI in recruiting: By focusing on skills and qualifications instead of unintentional socioeconomic or demographic factors, AI can help HR professionals recruit fairly and equitably.
  • AI policies and cybersecurity readiness: AI-powered applications are new, meaning clear and comprehensive policies surrounding their usage must be developed. Additionally, unfortunately, AI-driven cyberattacks are on the rise. Business leaders should prioritize cybersecurity training, implement cybersecurity plans, and obtain adequate cyber insurance and liability coverage.

Trend 2: Employee benefits and total compensation

The importance of employee benefits isn’t new, but which plans top talent seek constantly change. Three major employee benefits trends outlined in our 2025 HR Trends report include:

  • Financial wellness programs: Almost half of workers say inflation has majorly or severely impacted their finances over the past year. As such, many now value financial wellness programs, like student loan assistance, education workshops, and more.
  • 401(k) plans for employee financial security: One of the most impactful benefits employers can offer is a 401(k) plan, and 62% of workers consider the availability of a retirement plan when deciding whether to accept or remain in a job.
  • Benefit package customization: Workforce demographics change quickly, and in the new year, HR leaders should ask themselves three questions:
    • What employee pain points do our benefits solve?
    • Are we helping our staff feel more financially empowered?
    • How big of a role do our current benefits play?

Trend 3: Leadership development

Effective leadership development is crucial for organizational success. However, approximately just 10% of people possess a natural ability to manage others. This makes coaching and continuous improvement essential, and business leaders should guide their management staff to:

  • Leverage feedback: A robust performance management process is necessary and should include regular performance reviews, anonymous suggestion channels, etc.
  • Empathize: Empathetic leaders foster strong relationships, effective communication, employee engagement, and more. However, while 80% of senior leaders believe showing empathy is important, less than half think their company does so effectively.
  • Be optimistic: When managers have a positive but realistic viewpoint, that mindset trickles down to their direct reports, boosting morale and productivity.

The world of HR is constantly in flux—but you’re not alone in navigating it. Download the free 2025 HR Trends Report now to access helpful tips for your business.

Trend 4: Talent management

Effective workforce management, from identifying hiring needs to succession planning, will be critical this year. Business leaders should brush up on the latest talent management trends, including:

  • Strategic hiring and workforce planning: An organization’s success relies on its ability to build a future-proof hiring strategy, and it should consider emerging talent networks like returning retirees.
  • Onboarding and employee development: Formal, structured onboarding processes give new hires a comprehensive understanding of the business, its culture, and their role within it.
  • Employee transitions and workforce mobility: Unfortunately, sometimes terminations may occur. In 2025, employers must be cognizant of the Worker Adjustment and Retraining Notification (WARN) Act and handle transitions respectfully and with compliance.
  • Succession planning and talent development: Businesses can avoid talent shortages by designing a thorough succession program with career ladders and lattices to help employees envision how they can progress within the organization.
  • Globalization: A global workforce can provide access to a larger talent pool, increase flexibility, and boost revenue—but employers must remain aware of other regions’ regulations regarding payroll and income tax, business registration, workers’ compensation, and more.

Trend 5: Company culture, employee engagement, and DEI priorities

Today’s workforce is increasingly selective when it comes to where they work. To remain competitive, business leaders should assess their company cultures and ensure they:

  • Encourage open communication and feedback: Consider developing open dialogue and feedback channels so workers can freely voice concerns or suggestions.
  • Embrace multi-generational needs: For the first time ever, today’s labor force is comprised of five generations (Baby Boomers, Generation X, Millennials, Generation Z, and the Silent Generation). Therefore, organizations must adapt their communication strategies and leadership styles accordingly.
  • Monitor diversity, equity, and inclusion (DEI) initiative effectiveness: It’s critical that business leaders establish DEI objectives and keep tabs on them to confirm they create meaningful progress.

Stay a step ahead with a PEO partner

Trends, by definition, continually evolve. However, keeping up to date on and adapting to these changes can be challenging for small businesses with limited resources. That’s where a professional employer organization (PEO) can be helpful. A PEO is a type of HR outsourcing provider that manages critical HR functions such as employee benefits, payroll, risk and compliance, and more for their customers. As a result of this partnership, small businesses in a PEO engagement experience:

  • Up to 9% faster growth
  • 10-14% lower turnover
  • 50% less likelihood of going out of business
  • A 27% return on investment in cost savings alone

A PEO like ExtensisHR can equip your business with the resources needed to not just survive, but thrive, as the industry evolves. We proudly offer:

  • Personalized employee benefits at competitive large-group rates, as well as benefits administration and planning services.
  • A dedicated HR Manager to help you craft policies that meet the workforce’s changing expectations.
  • An ultra-responsive employee service team that answers the phone in an average of 10 seconds.
  • Risk and compliance expertise to keep your business compliant during legislation changes and the growth of a multistate or global workforce.
  • An intuitive DEI Dashboard that provides real-time DEI data on pay equity, salary trends across both gender and race demographics, employee turnover, promotions, and more.
  • Access to 15Five, a top employee engagement and performance management platform.
  • And more

Are you looking for more tips on improving your workplace? Download the 2025 HR Trends Report to fully explore the industry’s major developments, or learn more about how a PEO can help you better your business.

 

Download your copy of the 2025 HR Trends Report

Discover key industry developments shaping today’s workforce to guide your HR strategy in 2025 and beyond.

 

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