2025 HR trends: the agentic workplace, DEI 3.0 and HR’s rebrand

Extinguishing the flames of burnout

A workforce at the breaking point is not fit for the future. Over the past year, 79% of US employees suffered symptoms of burnout at least once, with gen-Z and millennial workers at greatest risk. 

Employee burnout can lower staff productivity and cause people to take more sick days, quiet quit or even hand in their resignations. Widespread burnout can be devastating to a company.

This risk can be avoided if businesses take their duty of care towards staff seriously. Employers that do so will be rewarded with a more productive, creative and adaptable workforce. Workers who are both physically and mentally well are much more likely to work well.

It’s critical that workplace wellness is taken seriously over the next 12 months. HR teams must use data to understand the experiences of their staff and emerging trends in the workplace, and provide solutions to any problems. 

Establishing flexibility as the norm

Despite recent headlines about companies enforcing returns to the office, workplace flexibility retains strong support among HR leaders. Almost all HR executives (95%) surveyed by International Workplace Group regard hybrid working as an effective recruitment tool. Workplace flexibility is also a key consideration for employees when accepting job offers.

Flexibility is no longer just a nice-to-have, it’s a necessity for many employees and it must become the new norm in the workplace. Back-to-office mandates are short-sighted; they drive the best staff to leave, while those who stay will become less engaged and increasingly disgruntled. More companies will come to realise this in the year ahead. 

Labour shortages

Economic inactivity continues to hold back the labour market. It’s estimated that by 2030, a high percentage of roles will be unfilled due to a significant mismatch of skills, particularly in the healthcare and construction industries. 

In the US, there are 1.2 job openings for every unemployed person – a ratio almost six times higher than in 2010. It’s a similar story across the next seven-largest developed economies – Australia, Canada, France, Germany, Italy, Japan and the UK – where the number of jobseekers is roughly equal to the number of vacancies.

This isn’t simply down to disenfranchisement. Many of these countries have ageing and declining populations, which is something HR departments cannot solve. Nevertheless, they can help to plug the skills gap using a two-pronged approach . 

Firstly, HR must cultivate better leaders who can retain staff. They must also spend more time looking at key roles and develop robust internal talent pipelines, providing holistic training initiatives and succession planning.

Secondly, where possible, HR can use AI to do the tasks that no one wants to do. However, this cannot be done without proper training – 67% of employees are not enabled by their organisation to use AI to augment their productivity, according to Gallup. To improve productivity with AI, companies will need to invest in people to ensure they can use the technology effectively. Again HR can play a crucial role here. 

The agentic workplace

AI is no longer merely a tool for retrieving information – it is a collaborator. However, the technology must be implemented in the workplace carefully.

AI offers exciting opportunities for HR teams to increase productivity and efficiency. For example, new AI agents can assist in the recruitment process by scanning LinkedIn profiles, emailing candidates with interview offers and even conducting interviews, all without the need for human manipulation.

But, as with all new frontiers, issues around ethics and governance have arisen. HR leaders will need to design clear frameworks for how AI agents are used and onboarded in the organisation, taking consideration of the legitimate concerns of employees and the potential challenges that come with managing integrated teams.

Workforces will come to see AI as less of a threat and more of a tool, but it will require clear policies and proper training.

DEI won’t die

DEI has been a hot topic this year. Societies are divided and staff are not immune to disagreements over politics, women’s rights, religion and immigration, among other topics. This has created tensions around DEI initiatives, which are amplified by social media and chaotic political discourse. “Alternative facts” and ad hominem attacks continue to gain attention, which means opposing sides will struggle to find common ground. 

But support for DEI among businesses remains strong in spite of these tensions. According to a report by Teneo, 42% of companies maintain quantitative, time-bound DEI goals and 80% of these goals are unchanged from 2023. Two-thirds of companies have targeted-talent programmes to enhance workplace diversity and 70% have supplier-diversity programmes.

Despite the predictions of Tesla CEO Elon Musk, DEI won’t die – but it will change. Representation will become more important than measurement. A proactive approach to inclusion is necessary, as unmanaged tensions will lead to an increase in discrimination claims. 

HR will need to train managers in conflict resolution and create safe channels for employees to voice concerns. The challenge will be to navigate competing expectations from different stakeholder groups – employees, customers, investors and regulators – while maintaining productive work environments. 

Welcome to DEI 3.0. Hopefully, it will be less of a wild ride in 2025.

The HR rebrand

HR is a lightning rod for controversy. If this is news to you, just look at the negative comments on a recent Financial Times article I contributed to. Cleary, HR has developed a bad reputation.

This isn’t entirely unjustified. Many HR departments lack the appropriate skills, with senior roles too often filled by people who don’t have experience in this field. It’s no wonder many HR managers are struggling to keep up with rapid changes in the workplace. Three-quarters of CHROs do not believe leaders and managers are equipped to lead in times of change, according to a survey by Gartner.

Moreover, after several years of turbulence, many HR professionals are facing burnout themselves. Four in five (81%) HR leaders feel burnt out and 95% say the job involves too much work and stress, a Sage report found. These figures are much higher than in most other professions. HR looks after the workforce, but who is looking after HR?

HR will continue to bear the brunt of workplace disruptions in 2025. From AI integration to workforce polarisation – there will be even more demands on a department that is already exhausted and demoralised.

It’s time to humanise the HR team and talk about their successes. The HR department must seek out opportunities to enhance their visibility and impact. This will help to shift its reputation from an ineffective department that cannot be trusted, to a critical and strategic change agent. 

The evolving CHRO role

HR leaders must be empowered if they are to position HR as a strategic business function. But with only 3% of FTSE 100 company boards including a CHRO, it’s difficult for people leaders to exert organisational influence. 

The HR function was once a mere record-keeping department, only later becoming more involved in recruitment and onboarding. Historically, employees had contact with HR only at the start and end of their tenure or when something went wrong. 

This has led HR staff to be seen as administrators, management sidekicks and enforcers of the rules. But HR professionals have unique people skills and organisational insights. They can act as strategic advisers to the CEO and play a central role in setting company culture. This is essential during times of uncertainty, as a strong company culture can be remarkably shock-proof. 

An empowered HR department can produce impactful leaders too. By focusing on adaptability, coaching and emotional and cultural intelligence, CHROs can cultivate a pool of leaders who are prepared to cope with any changes. 

In 2025, new workplace trends will demand that companies invest in their people to flourish and grow, but they cannot do this without treating the people team as strategic partners.