WorkNest’s HR industry predictions for 2025

HR claim cost-of-living as a key challenge for coming year 

Jo Chambers, HR Consultancy Operations Director at WorkNest said: “Our recent research of HR professionals found that employee engagement and the cost of living are the biggest challenges they foresee in 2025. Arguably these could be linked, but years of hybrid and remote working has also made effective employee relations difficult. Financial wellbeing should remain high on the agenda for HR professionals as morale and mental wellbeing will be impacted as the financial strain on households continues. Also consider the financial implications of employees commuting if a return to the workplace is planned for 2025. Handle the situation carefully as for some people commuting carries a significant cost so plenty of warning and a phased approach can ease the financial pressure.”

AI and other advanced technologies on employee engagement 

Jo Chambers, HR Consultancy Operations Director at WorkNest said: “Whilst AI and advanced technologies can enhance job satisfaction and productivity by automating tasks, it may create worry for employees in relation to their job security and being displaced in their roles.  Employers can address these by offering upskilling opportunities, involving employees in the introduction of technology and emphasising their importance and value to organisations.”

Restructuring and redundancy 

Lesley Rennie, Principal Employment Law Solicitor at WorkNest said: Following the budget, come April, businesses will have both the National Minimum Wage increases and National Insurance Contribution changes to factor into their wage bills. For some, it’s inevitable that cuts will need to be made in order to offset the financial impact of these changes. With this in mind, headcount reduction redundancies are likely to be on the agenda so HR must be sure their processes are robust, fair and followed. We could also see a lot of restructuring as a result as businesses move to make their operation as efficient and effective as possible. Aside from the risk of claims which can inevitably stem from redundancy and restructuring exercises, organisations must be alive this coming year to the impact that any redundancy or restructuring programme has on their remaining workforce. Burnout and employee disengagement for those remaining is an often overlooked risk when reducing headcount but can pose real challenges.  Employers should carefully plan the communications around any redundancies and take care when reallocating residual duties to avoid a culture of overworked, disgruntled staff.  Skills shortages should also be closely managed to ensure that the correct gaps are adequately filled without relying on team members to do a role outside of their capability.

Significant preparation in 2025 for legislation changes 

Lesley Rennie, Principal Employment Law Solicitor at WorkNest said: “With the Employment Rights Bill, and the soon to be published Equality (Race and Disability) Bill, we are expecting a plethora of reforms to worker rights and protections during the tenure of the Labour Government. Many of these are significant and will bring a level of change to employment law that we haven’t seen in over a decade. Whilst many elements of the highly publicised ‘Make Work Pay’ plan aren’t due to come into effect until 2026 and we await much of the precise details, preparation must start much sooner. There will be lots of upskilling and training required, for HR professionals, line managers and senior management together with the development of action plans to comply with the new laws as and when the final details are published.”

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