According to McLean & Company’s HR Trends Report 2025, HR’s role as a strategic partner within organizations has stagnated for the first time since 2020. While 48% of HR organizations now report having a formal HR strategy, there’s a growing need for HR to adapt to evolving business challenges and demonstrate a strong return on investment (ROI) for HR initiatives. The report identifies new strategic priorities, shifting focus from recruitment to leadership development, employee retention, and managing labor costs.
Key Findings from McLean & Company’s HR Trends Report 2025
1. HR’s Strategic Role Faces Challenges
Despite the increase in formal HR strategies, HR’s strategic partnership with the organization didn’t grow in 2025. As organizations navigate economic pressures, HR’s focus is shifting to internal talent management, which includes developing leaders and retaining employees.
2. Top HR Priorities for 2025
In line with shifting organizational needs, HR’s top five priorities for 2025 are:
- Developing leaders
- Retaining employees
- Controlling labor costs
- Providing a great employee experience
- Recruitment
The ability to show how HR aligns with and drives these priorities will be crucial for maintaining its role as a strategic partner.
3. Human Leadership in a Complex Digital World
With the growing complexity of the work environment, HR’s focus on leadership development will be critical. HR must equip leaders to navigate increased demands, balancing employee wellbeing with organizational growth.
- Organizations excelling in leadership development are 1.9 times more likely to meet strategic goals and 1.8 times more likely to optimize costs.
4. AI Transformation in HR
As AI adoption accelerates, HR’s role in managing the technology’s integration is vital. However, McLean & Company highlights a significant skills gap: HR professionals’ technology enablement skills remain among the weakest. Organizations using AI effectively report significant improvements in recruiting, talent management, and learning & development.
- AI adoption correlates with better recruitment outcomes and more data-driven decision-making.
5. Wellbeing: A Major Focus for 2025
Economic instability, tightening labor markets, and political issues were identified as significant threats to employee wellbeing. HR’s investment in employee wellbeing strategies must be informed by listening to employee needs and aligning resources accordingly.
- HR organizations with formal wellbeing strategies are 1.6 times more likely to perform well in supporting employee wellbeing.
Emerging HR Trends for 2025
McLean & Company also outlines several emerging HR trends for the year ahead, including:
- Redefining people manager roles
- Skills-based hiring practices
- Measuring ROI of HR programs
- Increased transparency in pay decisions
- Trauma-informed workplace practices
- Reverse mentorship opportunities
The report emphasizes the importance of these trends in shaping a forward-thinking, agile HR function that can effectively drive organizational success in 2025 and beyond.
In 2025, HR must focus on aligning with evolving business priorities and embracing technological advancements, particularly AI. With a stronger emphasis on leadership development, employee retention, and wellbeing, HR can continue to demonstrate its strategic value. By adapting to new trends and leveraging data, HR can cement its role as a critical driver of organizational success in the future of work.
