HR predictions for 2025
It’s certainly been a busy year in employment law. With key legislative changes and the election of a new Labour government in July committed to transforming workers’ rights, 2025 is set to bring new challenges and opportunities for HR professionals.
2024 has seen rapid growth in the adoption of generative AI in HR and recruitment in the UK. Research shows that around 60% of medium to large UK businesses now use some form of AI for recruitment and workforce management. And, according to the CIPD (Chartered Institute of Personnel and Development), many are adopting these solutions as part of their commitment to equality, diversity, and inclusion (EDI).
We caught up with Michelle Hobson, HR Services Director at Moorepay, and Sarah Dowzell, Co-Founder & COO of Natural HR, to share their predictions for the year ahead.
1. The advancement in AI
In 2025, investment in HR tech will continue to increase, as organisations prioritise digital transformation to make them more competitive.
Sarah Dowzell
“AI is transforming the workplace, shifting from simple task automation to developing intelligent, data-driven solutions. As we enter 2025, HR will likely be approaching two strands of AI: supporting productivity gains through AI in HR-related tasks and helping employees to learn and benefit from AI in their day-to-day work while balancing AI ethics and responsibilities. This involves navigating challenges from data privacy and intellectual property, down to identifying which tools your organisation is comfortable (or not comfortable) using.
In his recent article, ‘How AI will shift the HR landscape in 2025’, Josh Bersin calls for CEOs to invest in their HR teams in 2025. We’re just seeing the beginning of AI in the workplace and HR will be crucial in navigating AI-driven workplace changes.”
Michelle Hobson
“Looking more broadly at future changes that will impact the HR space, generative AI is gaining traction in many areas, and we are starting to see snippets of how it could be used in HR going forward. Whilst it is inevitable that AI will find its place, there is still nervousness regarding overreliance in a legislative environment – and rightly so. Instead, organisations should start to look at how this can complement and support their existing processes with elements of automation, rather than look to simply replace. In our recent survey and subsequent articles and reports published, we touched on how although at first glance Chat GPT was producing credible HR content, there were missing elements which would be critical in an ER process.
To make any kind of AI involvement work in HR there needs to be a clear strategy about how it will be used in your business, what measures you will put in place to sense check, and what training will you give to people using it.
Overall, there is a continued trend towards using supportive technology to help HR strategize and support business objectives. Use the power of automation to improve processes, employee and manager experiences, and allow your HR teams to create capacity to focus on what’s important.”
“We’re just seeing the beginning of AI in the workplace and HR will be crucial in navigating AI-driven workplace changes.”
Sarah Dowzell, Co-Founder & COO of Natural HR
2. Employee wellbeing and mental health
Sarah Dowzell
“Employee wellbeing continued to make industry headlines in 2024. Research by AXA reported a cost of £57bn to UK organisations arising from lost productivity due to mental health conditions, more than double the £28bn estimated in 2023’s report. In the days leading up to World Mental Health Day, HR Magazine published a survey by Grid that found work-related stress and anxiety to be the top health and wellbeing concern for employees under 60.
I expect employee wellbeing to continue as a key focus for HR professionals in 2025. Whether that’s enhancing existing offerings or introducing new programmes that take proactive measures to support wellness, technology will be an important enabler. This includes digital platforms showcasing the initiatives and encouraging uptake, surveys to understand employees’ feelings and sentiment, and perhaps even bookable mental health days in HR systems.”
3. Proposed legislative changes
Michelle Hobson
“2024 has seen lots of changes for the world of HR and, as it stands, 2025 looks like there could be even more!
A change in government after 14 years, with a consultation on the Employment Rights Bill in flight during the next 12 months, means HR forums across the country are flooded with predictions on what this means for organisations.
We know the basics of what is expected, such as Day 1 rights on unfair dismissal, a supposed ban on zero-hour contracts, statutory sick pay from day 1, to name a few. And whilst we don’t know the details of how this will impact and when, there are ways for business to prepare and think ahead with regards policies and contract changes. This is going to be key to minimising impact.
At Moorepay we will continue to “watch this space” and produce useful content to help you navigate these changes as they happen.”
Sarah Dowzell
“Proposed legislation such as The Equality (Race and Disability) Bill introduces measures on ethnicity and disability pay gap reporting. While these requirements are not yet in effect, many HR professionals are likely considering whether they have the necessary data and tools to conduct internal audits in 2025.
Proactively addressing these areas can help identify and address potential inequalities ahead of any mandated requirements.”
“2024 has seen lots of changes for the world of HR and, as it stands, 2025 looks like there could be even more! “
Michelle Hobson, HR Services Director at Moorepay
4. HR technology itself
HR technology is the digital tools and software that streamline and enhance human resource processes. From recruitment and payroll to employee engagement and performance management, HR tech helps organisations save time, improve efficiency, and make data-driven decisions to support their workforce.
Sarah Dowzell
“HR trends in 2025 will rely on professionals and advanced technology to succeed. As technology evolves, HR departments must adapt to stay ahead.
A recent Gartner report highlights HR technology as a top priority for 2025, but challenges persist. Over 55% of HR leaders say current tech solutions don’t meet business needs, and 51% struggle to measure their value. Many organisations focus on automating traditional tasks rather than driving transformation, with issues like disjointed systems, underused tools, and limited tech adoption. Only 25% of HR leaders believe their teams see the potential of technology, and 69% of employees faced barriers using HR tech last year.”
Is your current software provider up to scratch? Find out in our guide to reviewing your HR software.
How Moorepay can help
Our HR services
The Employment Rights Bill, set to take effect in 2026, is more than just a compliance exercise – it presents a pivotal moment for businesses to reshape their people strategies and gain a competitive edge. Although not many of the 28 separate reforms initiated in the Labour government’s Employment Rights Bill will come into force in 2025, there will be key developments as consultations happen. Now is the time to assess the risks with your current management of handling these issues and work on strategies tailored to your organisation’s specific needs to ensure full compliance.
By proactively addressing these reforms, organisations can mitigate risks while fostering a more resilient and inclusive workforce, strengthening their employer branding to both attract and retain a diverse workforce and promote employee engagement.
To find out how Moorepay’s HR Consultancy team can support with audits of day-to-day management, business processes, and training, call us on 0345 073 0240 (option 3) or email: policy.team@moorepay.co.uk
Our HR software
HR tech can automate core HR functions, helping HR professionals to streamline time-consuming tasks and has become an invaluable tool for workforce management and planning. Payroll, employee engagement, onboarding, absence management, analytics and reporting are just a few examples.
Today, AI-driven insights enable HR teams to be proactive, addressing issues before they escalate and making HR play a strategic role in business planning.
Book a demo to explore Moorepay’s easy-to-use HR software to empower your people managers, deliver your HR strategy, and engage your employees, all from one spot.
