HR trends to watch in 2025 and beyond

The start of a new year brings a sense of fresh beginnings and possibilities, and for the world of HR, 2025 is shaping up to be a year of transformation.

The workplace will continually evolve, and as such, businesses must also adapt.

I’ve spoken with our internal experts and examined recent industry research, uncovering three HR trends that will have a tangible impact on businesses in 2025.

1) Artificial Intelligence (AI) is transforming recruitment

As most people would guess, AI is at the top of most human resources trends list for 2025.

Regardless of industry and profession, AI is making a huge splash, and the HR space is no different.

In fact, it is stated that 80% of companies are investing in AI.

The kicker is that the same study that found this stat also uncovered that half of those investing aren’t sure how to use it.

In HR, we are seeing AI buzz around document generation and employee-facing chatbots.

However, an area we find quite exciting and expect to see more focus on in 2025 is the use of Artificial Intelligence in recruitment.

Software companies, like IRIS, are committed to exploring the benefits of AI and how core functionality can be added to products; for example, with our IRIS Recruitment system, we have created a new job description builder using generative AI.

Simply input the basic information for a role, such as job title, salary, location and company benefits.

AI then takes this information and searches the web for similar job listings, returning a full job ad based on what is being used in the industry, ready for you to review.

This is the first of many new features made possible through AI.

The impact of AI on recruitment doesn’t stop there.

There is also the use of AI by candidates when applying for jobs, whether that’s using it to create job applications and cover letters or using apps during video interviews to receive prompts when answering questions.

Some employers are attempting to ban the use of AI during the recruitment process, claiming it is cheating.

However, the world is changing, and AI competency is becoming an increasingly sought-after skill, so I would urge you to approach the situation with more of an open mind.

More content: Three ways artificial intelligence (AI) is shaping the future of cloud HR software

Read here

The risk of tunnel vision

We recently had Mervyn Dinnen, Analyst, Author and Commentator, on a webinar about equitable hiring.

During one of our chats, he raised a valid point about tunnel vision and focusing too much on AI.

He explained that while it’s exciting and there are many potential benefits, it is key that HR professionals don’t lose track of other areas for innovation.

After all, HR is human-focused, and as such, attention is needed on a wide array of areas and HR processes, not just those impacted by AI.

FREE Guide: Understanding the importance of equitable hiring

Download here

2) Getting more out of your investment in technology  

A recent Gartner study which looks at upcoming trends highlighted that in 2025, a major hurdle HR professionals will need to overcome is truly capitalising on the improved business performance and value HR technology transformation can deliver.

The study found that 55% of HR leaders say current HR technology solutions do not cover their current and future needs.

Two of the reasons given for this lack of successful technology transformation were a preservation mindset within HR teams and a lack of employee adoption.

Preservation mindset

Regarding the preservation mindset, it was found that many HR professionals misunderstand technology potential, worrying that it threatens part of their jobs.

For this, they cannot be blamed.

Over the last year, sensationalist headlines have dominated the tabloids, declaring that technology, more specifically AI, is posing a risk to many people's careers.

So of course there is a natural hesitancy around truly adopting technology.

However, the goal of HR technology, whether it features AI or not, is to automate and simplify time-consuming tasks, freeing staff up to focus on higher-value strategic activities.

As an HR leader, if you're concerned that your HR team and colleagues aren’t making the most of technology, the solution is relatively simple.

It's education.

People need training on the new tech functionalities, furthering their understanding and eradicating fears that the HR software is here to take away the aspects of their job that they love.

Flag: We regularly run webinars, upskilling customers on our HR solutions so they can make better use of the software – you can find our Cascade sessions here and Staffology HR sessions here.

Employee adoption

The second area I want to speak about is the lack of employee adoption.

The Gartner study found that 69% of employees reported at least one barrier to using HR tech in the last 12 months.

It was stated that end-users are struggling to navigate a disjointed landscape of technology, causing many to underutilise the key features.

Again, a perfectly reasonable challenge – I ask you to think about how many apps you interact with on a day-to-day basis.

I suspect the answer is quite a lot.

As such, many of the key benefits for HR teams, HR leaders and businesses, such as minimising regular requests by introducing employee self-service, fail to materialise.

For this challenge, I’d suggest two solutions.

Firstly, staff need the tech benefits reaffirming and perhaps re-training on how to use the cloud HR software.

I previously wrote a blog on change management that could help with this, which you can read here.

My second suggestion is to minimise your tech stack; consider either seeking a more comprehensive solution or use technology that can integrate and help reduce the number of systems staff need to interact with.

More content: How to eliminate payroll errors with HR integration

Read here

3) Increasing pressure to manage new Government plans  

For UK-based HR professionals, HR leaders and businesses, the new Labour Government will dictate a lot of workplace change, and you need to be ready to adapt.

As such, in 2025, keeping up with changing legislation, adapting your company culture and preparing your HR processes needs to be a major focus.

A few notable changes that are expected, include:

Employment Rights Bill

The new Employment Rights Bill details Labour's biggest step forward in enacting one of their key election offers, looking to revolutionise employee rights and improve the employee experience.

While many of the changes will take some time to consult and implement, businesses must begin preparing to avoid issues further down the line.

Notable changes include:

• Day-one rights
• Ending zero-hour contracts
• Tackling fire and rehire
• Fairer flexible working
• The Fair Work Agency
• Strengthening Statutory Sick Pay (SSP)

Equality (Race and Disability) Bill

The Government is due to pass the draft Equality (Race and Disability) Bill.

Acting as an extension of the existing Equality Act 2010, the new legislation will have a heavier focus on tackling systemic racism and promoting equal opportunities across minority communities.

Businesses found neglecting the new legislation could face heavy consequences, such as tribunal claims, fines and reputational damage.

Changes to National Insurance (NI) contributions

Employer National Insurance Contributions will increase from 13.8% to 15% on a worker’s earnings above £175.

The threshold at which businesses start paying National Insurance (NI) on workers’ earnings is also lowering from £9,100 per year to £5,000.

A good payroll solution should update contributions and thresholds to help you stay compliant.

Future of HR: don’t forget the human aspect of human resources

While a lot of the above HR industry trends emphasise technology, the key thing to remember is that the focus must remain on your people.

Ultimately, technology, new and old, serves as a way to improve daily operations, enabling HR professionals and business leaders to better serve their staff.

Looking for HR software which empowers your people? You’re in the right place. We put people at the centre of our feature-rich HR software – click here to learn more.

For those curious about how these trends differ from 2024, check out last year's blog here.

Additional support: frequently asked questions (FAQs)

What is the current trend in HR? 
Careful integration of AI is a major trend for HR, especially in recruitment and employee engagement. Striking a balance between risk management and embracing AI-driven opportunities will be essential for HR.

What are the biggest issues in HR today? 

Following rapid change in the workplace, HR has many issues to tackle, including:

• Change management
• Personnel management 
• Leadership development 
• HR Effectiveness measurement
• Recruitment and retention

What is the biggest challenge in HR? 
Often, HR challenges arise in the following categories: 

• Leadership development 
• Diversity 
• Employee engagement 
• Recruitment 
• Retention 
• Learning and development 
• Culture management 
• Payroll 

What is retention HR? 
Employee retention is defined as a business' ability to keep its employees. It often refers to strategies that focus on mitigating employee turnover risks.