HR teams have never been under more pressure to develop innovative and flexible solutions for improving employee well-being and engagement. With 2025 fast approaching, talent competition is intense, and employees are demanding more support from their companies — from a greater focus on their financial wellness to a better work-life balance. The companies that can meet these demands will have a significant competitive advantage in 2025 and beyond. 

There are several key trends for HR teams in 2025. First, it’s essential to prioritize the employee experience (EX), which means adopting tools and strategies to improve employees’ holistic well-being, increase engagement, and reduce turnover. Second, HR teams should leverage AI and automation to streamline recruitment, onboarding, and payroll tasks. It will also be necessary to use increasingly sophisticated data analytics to make informed decisions on talent acquisition, compensation, and workforce planning. Third, companies will continue the transition from remote and hybrid work back into the office, and HR teams will be responsible for making this transition as smooth as possible. 

Finally, HR teams will continue to shift from one-size-fits-all benefits to more flexible and portable benefits that meet employees’ unique needs and goals. Benefits should also become more comprehensive, covering everything from employees’ physical and financial wellness to their families. The right benefits are central to employees’ overall well-being and will be a major competitive differentiator in the coming years. 

Employee experience will be a core priority

There are many signs that the employee experience needs to be improved. Gallup reports that less than one-third of employees are engaged at work, which can lead to a wide range of negative outcomes: a higher rate of absenteeism, decreases in productivity and profitability, and increased turnover. According to a 2024 Bank of America survey, burnout is one of the top reasons employees would consider leaving a job. Meanwhile, the top reason they decide to stay is a healthy work-life balance.  

A critical aspect of improving EX is supporting employees holistically. For example, 57 percent of employees say finances are the leading cause of stress, which can harm many dimensions of well-being — from sleep and mental health to a sense of belonging at the company. There are also significant gaps between HR perceptions of employee financial well-being and reality. HR leaders overestimate employees’ financial health, for instance. HR teams should consistently engage with employees about how their needs can be addressed and their experiences can be improved. 

Financial health is a major element of this effort. Still, other issues need to be addressed — such as a lack of flexible benefits, employee disengagement, and cultures of overwork in which employees don’t feel comfortable taking time off or completely disconnecting from their jobs. EX has never been more important, and HR teams are responsible for developing innovative and sustainable ways to improve it. 

AI, automation, and data will transform HR

The global economy is in a state of rapid transformation. McKinsey predicts that 30 percent of hours currently worked in the U.S. economy could be automated by 2030, and companies are already facing significant skills gaps that they’re struggling to fill. While the emergence of AI is a powerful force driving these shifts, it also offers solutions that will make dramatic changes more manageable. AI has a growing role in tasks like recruitment, as it can help HR professionals identify and interact with qualified candidates more efficiently than ever before. 

This is one of many reasons Gartner reports that over three-quarters of HR leaders believe a failure to adopt AI solutions over the next 12 to 24 months will mean falling behind peers that embrace the technology. Gartner also found that 38 percent of HR leaders are already exploring or implementing AI to increase process efficiency. HR teams can use AI-powered chatbots to screen candidates and gather basic information on a much larger scale. AI can also analyze much larger pools of candidates and identify the ones that meet specific criteria much more effectively than human recruiters. AI can even be used to identify skills gaps. 

AI isn’t just a powerful tool for identifying, hiring, and onboarding new employees. It can also help HR teams retain their existing workforce by predicting employee turnover, personalizing learning and professional development opportunities, and enabling companies to make data-driven decisions around everything from compensation to workforce planning. No matter how HR teams use AI in the coming years, it’s clear that the technology is already having a profound impact on their work. 

Employees will continue to demand greater flexibility

The age of the one-size-fits-all approach to employee benefits is ending. Employees want to be treated as individuals with unique financial goals, challenges, and professional priorities. HR teams can meet this demand by providing flexible benefits that help them plan for the future and secure a healthier work-life balance in ways that respect their specific needs. For HR professionals, this could mean anything from providing personalized financial guidance to offering flexible benefits such as convertible PTO that help employees use the value of their unused time off in whatever ways they see fit. 

According to a recent Harris survey, over three-quarters of Americans don’t use all the PTO allotted. This means employees leave considerable value on the table every year, which could be allocated toward anything from retirement contributions to student loan payments. It’s no wonder that 70 percent of employees say they’re interested in customizable benefits. These benefits are all the more important at a time when nearly two-thirds of CEOs expect a full return to the office by 2026. Sixty percent of employees with remote-capable jobs want a hybrid work arrangement. Now that they’re losing flexibility in how and where they work, HR teams must provide flexibility in other areas. 

The HR teams that focus on improving EX, leveraging revolutionary technology like AI, and giving employees the flexibility they need will differentiate themselves from competitors in 2025 and prepare their workforce for success well into the future.