As the labor market continues to experience rapid change due to tech advancements and economic fluctuations, here are four trends every people leader should be watching in 2025.
By Traci Chernoff
2025 has been off to a busy start, with technological advancements, shifting labor markets, and global economic dynamics poised to bring new challenges and opportunities to the HR landscape. Yet, no matter what unfolds, there are certain trends that HR professionals should always be watching out for, ones that will most closely impact their workforce and define the shape of critical HR functions. Here are four trends that every HR leader should be monitoring this year.
TREND ONE: The Growth of AI and How Workers Feel About It
AI isn’t going anywhere. In fact, it will only become more entrenched in workers’ everyday job experience. In early 2024, McKinsey found that nearly three-fourths (72%) of businesses had adopted AI for at least one business function, and that number is bound to increase as more companies understand how AI can improve their organization.
For HR professionals, the value of AI is undeniable. It’s come to play a pivotal role in candidate sourcing and screening, ongoing workforce management, payroll, and labor planning processes, and it will only become more commonplace in the next year. By automating and eliminating tedious, time-consuming tasks, AI is putting the “human” back into human resources, giving HR leaders more time to connect with their workforces and better serve their needs.
However, the rapid growth of AI has caused some understandable trepidation among the workforce. Recent data shows that about 28% of all employees fear AI could replace their roles, and 71% say they have concerns about AI’s role in the workplace in general.
Employees should know that AI isn’t here to replace them; it’s here to shoulder the busy work, enabling them to do the tasks they’d rather be doing. As more businesses adopt AI tools, more workers are going to see their utility. Across the board, organizations see the quality of jobs improve because work itself will be more meaningful and human-centric.
Though hesitation and unease may be trending, with the right employee education and strategy, that hesitation can become enthusiasm. As a result, HR leaders can expect AI literacy to become a tentpole in workforce development. To further assuage employee fears, AI companies will also work to ensure their tools are not the sole decision-makers in these processes. Human involvement remains crucial at all times, especially when it comes to people management tasks.
TREND TWO: The Evolution of Coaching and Managing
Every employee should have the opportunity for both professional and personal growth on the job and often that comes down to having a supportive manager. However, 40% of workers say they don’t receive enough coaching from their managers. Without proper guidance, employees could be missing out on critical skills and experiences they need to progress in their careers. Worse, they may even feel left out or unappreciated.
However, this isn’t due to managers’ lack of trying. Rather, it’s more likely the result of a lack of time—especially at companies that employ hourly workers. Frontline managers are sidled with tedious administrative tasks like schedule management that keep them from connecting with their teams. Getting managers out of the backroom and meeting their teams where they are will be a key priority for HR leaders in 2025.
Implementing AI and other emerging technologies that automate administrative work will give rise to more meaningful training experiences. By streamlining manager workloads with AI, companies can redirect budgets and other resources toward more coaching and training, rather than mundane, unimpactful tasks. By making employees more collaborative and saving them time, AI and automation are moving companies toward a world where work is more fulfilling and human interaction can flourish.
Bridging generational divides will also be a priority for companies as they improve their coaching strategies. The current workforce is the most age-diverse in history, and one’s experience level is hardly dictated by their age, anymore. This can create tension in manager-report relationships, but also impact opportunities for growth. On-the-job mentorship and reverse mentorship can help close generational divides, creating more cohesive teams while fostering professional growth for both senior and junior employees. However, this won’t happen if employees don’t have the time, which will make relieving the burden of administrative work all the more important.
TREND THREE: Increasing Flexibility for Every Workforce
Providing flexibility is becoming a key priority for workforce management practices across several industries and employer types, but it’s a major focus for those that employ hourly workers, or else workers who have to be on-site and cannot work from home. After all, flexibility encompasses more than the option to work from a person’s living room.
Over the next year, HR leaders will see the definition of the “flexible workplace” expand. For hourly workers, this looks like having the ability to pick up shifts at a different store or swap shifts with a coworker. They should also be able to input their preferred times into a workforce management system and actually have those preferences accommodated. This will increase value for businesses, as well: A recent study found that employee retention increased by 27% when hourly workers had the ability to choose their shifts. Conversely, if employers choose to roll back their pandemic-era flexibility measures, they can expect to struggle with retention and recruitment. Once people have experienced true flexibility, they don’t want to go back.
Considering this, flexibility will become a core talent acquisition strategy for industries facing a labor shortage, such as food service, retail, and construction. A stronger emphasis on flexibility in these industries will put pressure on other employers to follow suit. Employees are looking for mutual commitment from their employers when it comes to enabling flexibility, and more organizations should invest in the technology and strategies to meet their end of that commitment.
TREND FOUR: Early Access to Pay
Just as employees want more control over their schedules, they also want more control when it comes to their finances.
Companies are making financial wellness a major benefits priority to meet this demand, and so far, they’re seeing affirmative results. According to research from the EBRI, 83% of employers who have some kind of financial wellness plan say it’s had an impact on their employees’ social, emotional and mental well-being.
One popular benefit that will continue to grow in 2025 is earned wage access (EWA) for hourly workers, which allows them to withdraw the funds they’ve earned ahead of a biweekly payday. Unlike a payday loan, EWA programs cut out a significant portion of the interest and fees, and are usually more closely controlled by the employer. These solutions are far more accessible and intuitive than payday loans, especially when they’re routed through the employee’s existing workforce management app.
With the right combination of technology, strategy, and empathy, HR leaders can harness today’s most impactful workplace trends to create a better, more human experience for their employees. A comprehensive perspective will lead to more informed decision-making, and ultimately, a better workplace.
Traci Chernoff is senior director of employee engagement at Legion Technologies.
