HR leaders' planning of HR priorities for a business year is too often a reaction to what corporate strategic planners and other top executives define as the key objectives and critical issues to be addressed. However, making HR plans that reflect the current challenges and help better prepare the organization to meet those needs should and can start with the HR team. In that way, HR can make significant contributions to the overall business planning cycle while conforming to the function’s status as a critical driver and element of the business.

While “predictions” posts and articles from leading HR thinkers and influencers are popular every year, we at Wowledge consider the idea of projecting what will happen to be somewhat off-center for the purpose. Predicting the future is an exercise in futility, as circumstances within any organization differ significantly, even compared to those of others in their industry. Why is that the case? The quality and effectiveness of organizational capabilities, cultures, governance, leadership teams, customer and supply chain relationships, and performance standards vary widely, making generalized predictions about what to address too broad to be instructive.

Instead, we suggest HR leaders consider what is happening outside the company, in their industry, and across relevant business ecosystems, as well as internal people capabilities, to determine their priorities. In that spirit, a review of what is occurring inside and outside of the organization that can impact which challenges and opportunities to address makes the most sense. Selecting just a few HR priorities to focus on and allocate time and resources to can simplify focus and make achieving them more likely. In that way, reviewing potential HR priorities is a better path forward.

Having a common understanding of the pressures and forces that can affect the achievement of enterprise plans across the HR workforce can help them communicate the rationale for HR priorities throughout the organization. It can also build the credibility of HR team members as strategic and business-focused partners, regardless of their level or role.

Geo-economic, political, and climate-based trends and challenges

Understanding global and domestic trends, events, and issues is the starting point for assessing the potential impact of external threats and opportunities on business objectives. As a key part of the executive leadership team, the CHRO or CPO should maintain an awareness of these, assess how they might influence the potential achievement of goals, and discuss them with other C-Suite members. Whether or not the organization has operations outside of the U.S. or across multiple domestic regions, these challenges can and will impact most industries and, as a result, their HR priorities.

Global issues

The World Economic Forum (WEF) regularly polls and reports on risks to businesses worldwide. The most prominent challenges executives are concerned about are societal polarization, the misuse of artificial intelligence (AI) technologies, computer security, and increased living costs. When surveying thousands of executives across over 1300 economies, they are increasingly alarmed and issuing warnings about business hazards related to AI-generated misinformation and disinformation, rising living costs, and cyberattacks.

The polarization of entire societies, particularly in developed countries, is fueled by social media posts against immigration and diversifying populations, spending and support for other countries, and a general “us-first” mentality. These put tremendous pressure on companies to staff and build cybersecurity capabilities, maintain sufficient staffing levels, support a diverse workforce, meet customers' needs, and maintain supply chains across a wide range of cultures.

Global risks continue to exist, if not worsen, due to public health crises, climate change, increasingly extreme weather events, and military conflicts that impact production, shipping, and distribution channels. These events also directly affect workers and their ability to conduct business when they interrupt work and production schedules, power grids, fresh water and food supplies, and damage work facilities. Other factors introduce supply chain disruptions, such as when piracy impacts ocean shipping channels, commercial shipping accidents block or damage ports, or terrorist and wartime events disturb the normal flow of goods and services.

Further economic risks exist globally, with potential supply shortages and rising production costs projected to threaten supply chains and become a significant source of job displacement. While it will take time, an increased movement towards re-shoring supply chains since the pandemic is expected to reduce the negative job impacts, with increased manufacturing and domestic shipping efforts underway.

Domestic (U.S-based) challenges

The big trend in the U.S. is related to the change in federal administration. With a newly elected president and a changing Congress, alterations are commonplace and expected and must be considered when determining HR priorities. That said, early indications point to radical proposals to change the size and scope of the federal government in 2025 and beyond. HR leaders must stay abreast of changes and their potential impact on company policies, strategies, and tactics.

• Easing of regulations and changes to others. Reductions in federal oversight related to health and safety (workers and industries), consumer protection, environmental protection (land, water, air, and animals), mergers and acquisitions, financial regulations, and climate change are expected. Concerns about access to healthcare, increased enforcement of work eligibility status, and education content standards will likely become issues for employees.
• Immigration crackdown. I-9 audits and immigration management are expected to rise dramatically again, putting more pressure on some industries than others. Manufacturing, agriculture, home services (cleaning and landscaping), food production, construction, and energy industries are expected to be the most impacted.
• Price increases. The likelihood of tariffs and reduced government subsidies for specific industries (e.g., alternative energy) raises the specter of higher operating costs, thereby putting corporate budgets under pressure and leading to consumer price increases. However, those are likely to be balanced by lower corporate taxes, increased incentives to manufacture in the U.S., continuing incentives for farming and agriculture, and domestic oil and gas production.
• Movement of employment centers. To better manage staffing of critical operations, there appears to be pressure to move into or away from states with more restrictive laws or environmental risks. State laws related to immigration, work eligibility, healthcare access, compliance monitoring, and corporate taxation practices can either incentivize or deter companies and their current and future employees, and thus become HR priorities. The locations with higher climate-risk profiles are also facing business disruptions and employee housing and security issues related to access to safe food, clean water, reliable power, and insurance coverage.
• Healthcare changes. A movement to revitalize challenges to the Affordable Care Act (ACA) and changes to Medicare-Medicaid would impact millions of covered, self-employed, and benefits-ineligible workers, possibly reducing federal oversight of healthcare. Further potential downsizing of the federal public health agencies (NIH, CDC, FDA, VA) would affect the protections and early warnings they offer to the U.S. population. Restrictions on reproductive and women’s health coverage, as well as prescription cost regulation, will require company benefits teams to adapt their plans, policies, and coverage while providing employees and their families with the coverage they need and want without running afoul of new laws. HR priorities will undoubtedly be impacted by any such changes.
• More pressure to provide mental health care and allowances/support internally. The stresses on workers seem to be getting the best of them at an increasing pace. 48% of employees find it difficult to prioritize their mental health at work, with even more (64%) of workers ages 18-34. The demands of working with increased automation and AI, with significantly higher levels of electronic work monitoring, remote and hybrid work arrangements without sufficient policy or programmatic support, and continued poor management are creating the demand for company mental health support.
  
  

Labor market woes continue

Labor shortages continue to challenge organizations across the globe, with a mix of (old) job losses and (new) gains driven by automation and AI adoption, and related shifts in employee skills (44% of required skills replaced by more advanced ones). These changes mean a lot of churn around a) who is doing the work and b) what work they are doing. The World Economic Forum estimates that 60% of employees will need to be trained by 2027, but only 50% of workers will have access to the required reskilling to perform their jobs. Organizations need to take these into consideration as potential HR priorities.

With working-age replacement rates insufficient to provide enough workers to fill jobs, continued U.S. labor shortages are expected to affect retail, distribution, manufacturing, leisure, and hospitality. In Europe, construction and trades, heavy manufacturing, healthcare, IT, and communications especially need a better supply of skilled staff. The most significant growth across the developed nations lies in technology and digital intelligence—software, cloud computing, cybersecurity, data science and analytics, artificial intelligence, and digital commerce. Chronic shortages in healthcare, advanced manufacturing, education, professional and business services, and financial services continue unabated and will remain a focus for HR priorities in those industries.

Better and more robust workforce planning for talent supply and demand is needed. That translates into modeling turnover and retirements and generating replacement strategies based on talent availability—by geography, critical roles, and future skill requirements—for full-time positions and temporary, contractor, and project-based workers.

However, some good news is emerging for specific industries, as enrollment in vocational training programs is increasing substantially. What appears to be a combination of factors—debilitating college student debt loads and fears that knowledge workers will be replaced by AI—the rate of enrollment in vocational programs rose 16% last year alone to its highest level in years. Training for construction-related trades rose 23%, while other traditional career fields such as HVAC, plumbing, electrical, and automotive increased 7%.

With the resurgence of investment, laws supporting the reshoring of domestic manufacturing, and the growth of construction, reports indicate that job satisfaction rates among skilled trade workers are as high as 87%, and young workers (18-30 years old) are flocking to these training and apprenticeship programs. 47% of Millennials and Gen Z are actively interested in trade jobs, drawn by schedule flexibility, shorter, less expensive education options, financial security, and a quicker path to the workforce and future business ownership.

Worker satisfaction is at an 11-year low

Issues with low employee engagement and happiness at work continue to plague organizations of all sizes worldwide. Gallup reports that 51% of workers are actively researching or looking for new roles, with stalled job markets the only barrier to more of them moving to new employers.

Furthermore, managers continue to exacerbate the retention and engagement problem, with only 35% of employees reporting that their managers provide recognition for good work, 20% stating they receive weekly feedback, and only 30% reporting that their manager builds a collaborative team. Unfortunately, their managers perceive that they are delivering on those behaviors at much higher levels.

The other core reason for worker dissatisfaction is the lack of development and mobility. One study found that 67% of workers would stay in a job they hated if they had internal opportunities to gain new skills and advance quickly.

Given the increasing workforce diversification driven by birth rates and legal immigration, efforts to support the new reality are struggling as diversity, equity, and inclusion (DE&I) programs and practices are under fire. The pressure to limit and abandon these is expanding, from recent court decisions to outside conservative activists and the expected changes from the incoming (U.S.) administration, pressuring U.S. employers to back off on this. The issue arises from managing those challenges while simultaneously attracting and supporting minority populations, which are rapidly becoming a larger share of the workforce.

Finally, remote and hybrid work arrangements, which proved immensely popular with employees, are now being reversed for many, leading to dissatisfaction. While workers employed in retail, manufacturing, hospitality, food service, and healthcare are not eligible for such arrangements, 53% of remote-capable workers are hybrid (and 27% fully remote). Yet even they have issues. While over half of remote-capable workers work on hybrid schedules and locations, only 34% have received formal guidance on when or how often to work from home vs. shared offices, and what activities to participate in on-site, such as team-based collaboration, performance feedback, or team building.

2025 HR priorities for planning and consideration

The key element of any planning is first determining the direction the business is taking, and then assessing external trends and the status of internal capabilities that might support or constrain the organization’s ability to achieve its stated goals. This force-field, SWOT, or similar analysis leverages insights from internal and external sources. The HR leadership then conducts and facilitates the development of HR priorities with top executives and strategic planners.

Based on research and leading practices, Wowledge identified the practices and priorities that impact the challenges reviewed and explained above. Given the global and domestic challenges facing businesses in the coming year, these represent opportunities and potential solutions tailored to an organization’s particular needs relative to its business goals. While some may seem fundamental, the data tells a story of widespread tactical insufficiencies in many organizations.

1. Grow and nurture the existing talent

The World Economic Forum (WEF) surveyed thousands of business leaders worldwide and found that the most significant barriers to their business transformation plans were “skills gaps in local markets” (59.7%), an “inability to attract talent”( 53.4%), and “leadership skills gaps” (37.3%).

Given the talent and skill shortages facing employers and the cost, effort, and productivity losses associated with replacing employees who leave, doing more with existing employees makes good business sense. Research from PWC found that when employees perceive a promising future, they are 1.7X more likely to stay and 2.3X more engaged. Furthermore, less than half (47%) of surveyed workers feel they have adequate opportunities to learn new skills, and 70% say the company hires from outside instead of providing opportunities for upskilling.

The key to developing talent at scale is to better understand the skill gaps and shortcomings across job families or critical roles, and to guide those role-holders toward a mix of learning and development opportunities. Consider more disciplined and targeted approaches to job mobility, rotations, project team membership, peer mentoring, internal apprenticeships, and self-guided upskilling programs as vehicles for skill enhancement, retention, and innovation. Create strategies and rewards that support employees' continuous learning, including career planning to build capabilities across employee groups.

2. Concentrate on developing managers

Major management consulting firms have found that leader and manager development is a top priority for many companies, with over 55% of CHROs identifying it as critical to organizational success. The reason? Managers and leaders account for 70% of employee engagement, guide and drive the achievement of organizational goals, largely influence the culture, communicate corporate objectives, and focus their teams on meeting customer requirements.

They should be considered “too big to fail,” with overwhelming data demonstrating that they fall short of meeting enterprise requirements. 75% of HR leaders report that managers are overwhelmed by the scope of their responsibilities, 88% of managers report burnout, and 69% of leaders say that managers are not equipped to handle the coming change.

Improvements should be focused on managerial selection, development, job redesign and simplification, performance measurement and monitoring, and intervention (when needed).

3. Prepare the organization for technology adoptions and expansions

The growth of automation continues across the globe, with over 85% of organizations stating that increased adoption of new technologies is most likely to drive the growth and transformation they need. However, only 24% of surveyed employees feel ready to adopt new, technologically driven working methods.

The issue stems from a lack of training and development. While over 75% of global companies are highly likely to adopt big data, cloud computing, and AI technologies, only 50% plan to train their employees in these. Adopting artificial intelligence (AI) capabilities is an interesting case study. Microsoft reports that while 75% of employees use AI at work, 78% bring their personal AI tools to work, and only 39% have received training from their company. Such a lack of institutional control exposes the company to plagiarism, inaccuracies, cybersecurity, and data privacy concerns.

HR leaders must prioritize offering targeted learning and development opportunities while working with IT, cybersecurity, legal, and top leadership to develop policies and a business-aligned strategy for implementing and overseeing employee use of these advanced technologies. Furthermore, HR should champion digital transformation and change management strategies and tactics to better prepare leadership and the workforce for automation and increased technology adoption.

4. Focus on employee experience (EX) and listening approaches

The opportunities created by improving process efficiency to enhance business and talent outcomes are substantial. Engaging employee feedback to identify more streamlined and effective workflows has been shown to significantly impact profitability and revenue growth, employee engagement, turnover, productivity and performance, customer satisfaction, innovation, and even recruitment outcomes.

90% of workers report being likelier to stay at their company if it solicits and acts on their input. Meanwhile, 44% of employees looking for new jobs reported that their organizations were “horrible” at using their feedback to create changes. Employees who state that their “voices are heard” at work experience 74% higher levels of engagement, and 74% report feeling more effective in their jobs.

Expanding employee listening and other data-centric methods to understand their experience, frustrations, and “moments that matter” helps create a more objective, fact-based culture for managing employees (and their managers). Evidence-based HR (EBHR) is grounded in this notion and is an approach that can help HR develop greater credibility while creating more robust, business-aligned solutions to talent challenges.

Relevant Practices & Tools

Advanced HR Practices that Accelerate the New Digital Reality. >

An intense focus on the future of work in a digital organization is critical to the value realization of digital transformation... more »

Developing Leaders Across Multiple Levels of Management. >

Advanced leadership development is designed to not only develop current executives, but "leaders" in all levels of the organization... more »

Creating a Learning Culture that Supports Career-long Education and Development. >

A learning culture is one that encourages and supports employees’ continuous pursuit of knowledge, sharing of learning with others, and motivation to continuously upgrade... more »

Employing Advanced Stakeholder Engagement Techniques to Reinforce the Criticality of the Targeted Change. >

When done effectively, stakeholder engagement creates trust with the initiative team, generates honest dialogue to build support for the changes, and reduces the potential for conflict... more »

The Internal Environmental Scan Tool: Capture and Categorize Factors Internal to the Company Impacting its Objectives. >

This template provides a structure for identifying key internal topics that should be considered in a formal analysis of the business’s upcoming challenges... more »