Roger Clements, Chief Growth Officer, Matrix gives an HR view on trends and predictions for 2025.
Whether you love them or hate them, trends articles are at least thought provoking. Next year will be particularly interesting in HR and recruitment with the opposing forces of flexibility and protectionism likely to meet head on should the UK Employment Rights Bill get the green light. But this could push HR to new heights if approached in the right way. Here goes…
Squiggly rules!
The evolution of career paths will continue in 2025, with more and more people embracing the ‘squiggly’ non-linear model (first coined by Helen Tupper and Sarah Ellis in their book of the same name published in 2020). Traditional linear career paths will fall further into decline, left behind by a younger generation that wants more control over their working life, along with the flexibility to change roles, employers and sectors when they feel it’s necessary. Whether that’s to accelerate their career development or change it completely, essentially by taking on in-demand skills or shifting to a sector on the rise.
Employers, too, will increasingly deem traditional career paths no longer fit for purpose. Again, flexibility is the key driver. The talent base organisations need is evolving rapidly, with 68% of in-demand skills predicted to change by 2030 (LinkedIn, 2024). To keep pace, organisations in 2025 will have to get better at re-skilling their people. This will mean staff naturally start shifting roles as they gain new skills and adjust their cultural alignment with employers.
Mapping ‘skills DNA’
Organisations will begin the shift to investing in people they believe have the core competences and best cultural fit to develop the new skills they need right now and, in the future, to drive performance and efficiency. More and more employers will also recognise the value of having people with the ability to work across functions, so they can build a collaborative and connected multi-skilled workforce that’s agile and responsive to changing customer demand and market forces. This breaking down of traditional departmental silos will be a key feature of business in 2025, and the squiggly career path will play a key role.
Success for employers and HR leaders lies in drilling down into the core skills of their individual employees, viewing people less as a job title or payroll number and more as a talent base. Mapping the ‘skills DNA’ of an organisation in this way helps identify the true value of a workforce, identifying which gaps need to be plugged and where. This will determine which people need to be re-positioned or taken on to optimise performance and drive future success. Instead of genetic engineering, think talent engineering! Executed effectively, this strategy will improve staff retention, engagement, motivation, morale and output in 2025.
Better workforce planning
The current unstable, changeable and highly competitive economic landscape looks like being the new normal next year and beyond, which makes a flexible and dynamic UK labour market vital to success in 2025. However, if the incoming UK Employment Rights Bill is passed in its current form, this will counter flexibility. It quite rightly looks to outlaw exploitative zero-hours contracts, but the reforms suggested around introducing more predictable working hours could fuel costly underutilisation of staff.
This is likely to force organisations to finally get on top of workforce planning, at which they have been traditionally very poor, and be more structured in how they handle recruitment. This would benefit both employers and employees and is something that should have been addressed years ago. Consequently, smart HR leaders should embrace this as soon as possible in 2025 and get ahead of the curve. It can only have a positive impact on their organisations.
Dynamic talent communities
One way of rising to the predictable hours versus flexible working challenge that’s likely to be a feature of 2025, and ensuring a workforce is both protected and predictable is developing dynamic talent communities. So, don’t be surprised to see more HR leaders looking to legitimise their pools of regular contractors by building more structure into relationships to ensure they are available and fully prepared when needed – much better training, cultural alignment and perhaps even introducing a retainer.
This means HR rethinking the whole temporary workforce engagement strategy to become more familiar with indirect staff and bringing a key element of predictability to scaling up and down the skills base when required. This will help overcome the controls needed to comply with new low and zero-hour contract rules should they come into force. And sooner or later they will!
Another strategy likely to materialise to help power the push for flexibility is micro-outsourcing. Originally inspired by the pandemic, when everyone was forced to think about work in a different way, it follows the philosophy of viewing work less as a place to go and more of an activity that needs to be done. It involves dividing pieces of work up into packages that are then farmed out to an individual or organisation, whatever their location globally. Next year this could really catch on!
Productivity-focused metrics
Another emerging concept that looks likely to take off in HR in 2025 is a more metric-focused approach to assessing productivity. Of course, productivity can mean different things to different organisations, sectors, etc. But the key question universally is: Are we getting the most from our resources, whatever they are – technological or human? So, the big challenge for HR leaders in 2025 will be how to create metrics for measuring productivity and how to best apply them in a consistent way across the business.
Count on seeing far more statistics around output per full-time equivalent (FTE), revenue per FTE, and profit per FTE. This will provide more accurate insight into workforce productivity and is more valuable than revenue per employee as it adjusts for part-time and contract workers by converting their hours into full-time equivalents. This should also see HR leaders working more closely with the Chief Finance Officer. Yes, the boardroom may well be beckoning in 2025.
Data-driven decision-making
No New Year trends analysis would be complete these days without mentioning artificial intelligence. This year has shown that although AI is supposed to help us work smarter, in HR and recruitment perhaps we’re not using it quite intelligently enough. Digitalisation does hold the key to faster more efficient HR, screening and recruitment, as well as enabling flexible working. But the true leaders in this evolving and complex landscape will emerge in 2025 as those that can strike the right balance between technology innovation and human empathy.
This means using the latest forms of AI-driven data analytics, smart personalisation and automation to streamline processes to deliver a more efficient and engaging service, and fuel faster, better decision-making. But managing and informing this with human expertise and intelligently thought-out strategy. HR should always provide personalised human interaction where it’s needed to guide and reassure candidates at pivotal stages, and bring employees together to socialise to boost a sense of belonging and wellbeing. Smarter HR in 2025 will hopefully see AI and people working better together.
Originally published The Global Recruiter | December 2024
Photo by Kelly Sikkema on Unsplash