HR Priorities Shift in 2025: Leadership Development and Retention Take Center Stage, Says New HR Trends Report from McLean & Company
A new report from McLean & Company, one of the world's leading HR research and advisory firms, highlights the critical priorities for HR organizations in 2025. The firm's research reveals that leadership development, employee retention, and cost management are essential focus areas for HR as organizations adapt to shifting economic conditions and evolving workforce expectations. These priorities reflect HR's growing role in driving organizational success and navigating the challenges of the future of work.
TORONTO, Jan. 28, 2025 /PRNewswire/ - As HR leaders seek to prepare their teams and organizations for a future defined by rapid technological advancements, shifting organizational priorities, and an uncertain economic landscape, they are increasingly challenged to identify the most critical areas of focus that will support long-term organizational success. To provide HR leaders with guidance as they navigate the future of work, McLean & Company's recently published HR Trends Report 2025 offers data-backed insights into the top five priorities for HR in 2025. The new report emphasizes that recruitment has been displaced as HR's top priority for the first time in five years, replaced by developing leaders and reflecting a growing emphasis on internal talent cultivation and cost-effective workforce strategies.
The annual report draws on insights from 779 HR and business professionals across diverse industries and regions, including North America (84%), Europe (6%), Asia (4%), Oceania (2%), Latin America (2%), Africa (2%), and Middle East (1%). Respondents' industries included manufacturing, finance and insurance, healthcare and social assistance, educational services, public administration, retail trade, construction, transportation and warehousing, professional, scientific, and technical services, and more. The wide scope of feedback highlights the critical role HR plays in preparing organizations for the unpredictable future.
"It is time to push the boundaries of HR's comfort zone. HR leaders have a unique opportunity to redefine their impact in 2025 by prioritizing leadership development and retention," says Will Howard, practice lead, HR Research & Advisory Services at McLean & Company. "These areas not only address immediate organizational needs but also lay the foundation for long-term growth by ensuring a strong internal talent pipeline."
In the report, McLean & Company outlines the top five priorities for HR in 2025, as detailed below:
1. Developing Leaders. Leadership development ranks as HR's foremost
priority in 2025. HR's effectiveness at developing leaders has an immense
impact on financial outcomes like optimizing costs and growing revenues.
The case for increasing investments in HR's ability to develop leaders is
clear, with research revealing that organizations excelling in this area
are 1.9 times more likely to be high performing at achieving strategic
goals and objectives and 1.7 times more likely to be high performing at
revenue growth.
2. Retaining Employees. Employee retention is a new addition to the firm's
reporting and ranked exceptionally high on the list of critical HR
priorities as organizations shift focus from external recruitment to
strengthening internal talent pools, helping to mitigate high turnover
costs. The report's findings point to strategic listening as integral to
delivering on HR's second and fourth priorities in 2025 - retention and
the employee experience. Despite the important role employee listening
plays in retention, few organizations are listening to the employee voice
strategically. McLean & Company's new report spotlights that only 23% of
organizations have a formal employee listening strategy, emphasizing the
need for HR organizations to take steps to improve in this area.
3. Controlling Labor Costs. Labor cost management remains a key priority
amid continued economic pressures, prompting HR to adopt strategic
workforce planning and cost-optimization measures. As explained in the
firm's report, being strategic about total rewards is key to controlling
labor costs. When HR has a formal total rewards strategy, they are 1.9
times more likely to be highly effective at controlling labor costs and
maximizing the value of labor spend compared to those with no total
rewards strategy. Labor costs are often the organization's biggest
expense, making a total rewards strategy essential to ensuring
investments are directed in a controlled and impactful way.
4. Enhancing Employee Experience. Providing a positive employee experience
remains critical in maintaining engagement and productivity. McLean &
Company's trends report notes that when used in HR, AI enhances key
employee experience outcomes, including talent acquisition, the candidate
experience, talent management, and learning & development. Though AI
adoption within HR is increasing, there is still much progress to be
made, with only 42% of HR respondents indicating they have implemented AI
in HR. This is an indicator that HR must continue to work to elevate its
data and technology skills, which will significantly impact the employee
experience.
5. Recruitment. For the first time in five years, recruitment is no longer
the top priority for HR in 2025. This drop in priority suggests that
organizations may be shifting priorities to emphasize important areas
like leadership development, where effectiveness has stalled over the
past several years. However, recruitment continues to play a vital role
in addressing talent gaps and building organizational capacity. The
firm's research findings explain that pay transparency is improving
recruiting effectiveness, with organizations that have or are working on
improving pay transparency being 18% more likely to report they are
highly effective at recruiting compared to those who have not increased
pay transparency.
"By addressing these priorities and leveraging data-driven strategies, HR can demonstrate its value as a clear strategic partner, ensuring organizations are well-positioned to navigate future challenges," explains Howard.
In addition to HR's top five priorities in 2025, the new report from McLean & Company spotlights key trends that will inform the way HR plans and prepares for the future of work:
1. Human Leadership in a Complex Digital World.
2. AI Transformation in HR.
3. Navigating Multiple Threats to Wellbeing.
4. Emerging Trends.
McLean & Company advocates that delivering on HR's top priorities requires elevating HR's data and technology skills, noting that increasing HR's data literacy skills will enable HR to drive effective decision-making and deliver on their top priorities. HR must also be prepared to use technology for data-driven insights and guide its implementation to ensure people-informed technology implementation in 2025 and beyond.
For more in-depth details regarding the HR trends in 2025, please visit the official HR Trends Report 2025 press release.
To access the full report, which offers comprehensive insights into these priorities and trends, along with actionable recommendations for HR leaders as they guide their organizations through a new year of possibilities, please contact ktame@infotech.com.
To register for McLean & Company's free upcoming CHRO panel, Leading the Way: CHRO Perspectives on Emerging HR Trends for 2025, on February 13, 2025, at 1 PM ET | 10 AM PT, please visit the official registration page.
Media interested in accessing full research insights or connecting with McLean & Company analysts for exclusive, research-backed insights and commentary on HR Trends in 2025, HR's critical role in digital transformation, and the future of work, and more can contact Communications Manager Katie Tame at ktame@infotech.com.
About McLean & Company
McLean & Company pairs evidence-based research and immediately applicable tools with deep HR expertise to position organizations to meet today's needs and prepare for the future. The global HR research and advisory firm's member organizations enjoy comprehensive resources, full-service diagnostics, workshops, action plans, and advisory services for all levels of HR professionals, from executive leadership to HR leaders to HR team members, that help shape workplaces where everyone thrives.
McLean & Company is a division of Info-Tech Research Group.
Media professionals can register for unrestricted access to research across IT, HR, and software and hundreds of industry analysts through the firm's Media Insiders program. To gain access, contact ktame@infotech.com.
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