The Future of Work: Setting Your HR Strategy for 2025

As 2025 approaches, small business owners and HR executives face an uncertain and volatile landscape that includes many potential challenges like tariffs, labor shortages, and economic unpredictability. The good news is that, with the right preparation, organizations can do a lot to mitigate the risks they may be facing in 2025 and take advantage of any new opportunities or innovations that emerge. That preparation, however, means crafting and implementing a 2025 HR strategy that’s explicitly designed for the Future of Work. But how do you do that?

1. Start with Clear Goals: Defining Success in 2025

Let’s start by getting back to the basics: goal setting. Effective goal setting is what shifts HR strategy from being, as performance management platform Betterworks writes, “a ‘check the box’ activity for both HR and the business and [turns] it into something that drives meaningful business outcomes.” In other words, the foundation of an effective 2025 HR strategy is a set of clear, actionable goals that reflect your company’s broader objectives. Begin by asking:

• What are our business priorities for 2025? Consider expansion plans, technological upgrades, or market changes.

• What workforce capabilities will be needed to achieve these goals? This includes technical skills, leadership competencies, and cultural alignment.

An outside HR partner like a Professional Employer Organization (PEO) can help by providing strategic insights into industry benchmarks and compensation data, ensuring your goals are competitive. Additionally, they can streamline administrative tasks like payroll and benefits management, freeing up resources to focus on strategic HR management initiatives.

2. Workforce Planning: Building the Right Team

Strategic workforce planning ensures you have the right people in place when and where you need them. However, far too many organizations overlook its importance. According to Gartner, “only 15% of companies engage in strategic workforce planning, leaving a significant gap in HR’s ability to align talent with long-term business goals.”

Worse, what planning does occur tends to be administrative and reactive rather than strategic and proactive. Specifically, Gartner found that two-thirds of HR leaders say their workforce strategy tends to be limited to just “headcount planning,” which is insufficient to plan for a future in which rapidly emerging technologies and shifting skills demands are redefining how work gets done.

On the plus side, this presents a significant opportunity for small businesses to gain a competitive edge. To get started with effective workforce planning, take these initial steps:

1. Assess Current Workforce Capabilities: Identify strengths, skills gaps, and overstaffed or understaffed roles.

2. Forecast Future Needs: Consider the impact of market trends, technological changes, and anticipated turnover.

3. Create a Talent Pipeline: Develop relationships with universities, trade schools, or industry associations to access a steady stream of qualified candidates.

PEOs can help here too, by bringing expertise in workforce analytics and can assist in creating accurate forecasts for talent needs. They also simplify access to top-tier recruitment tools, ensuring your business efficiently attracts qualified candidates and effectively manages current workers.

For example, a small manufacturer investing in automation for 2025 could plan to reskill current employees for technical roles, hire specialists for new equipment, and gradually phase out obsolete positions. A PEO can facilitate this transition by providing access to training resources and ensuring compliance with workplace safety regulations tied to new technologies.

3. Aligning HR Strategy with Business Objectives

For HR to have a meaningful impact in the Future of Work, its initiatives must directly support broader business goals. Think of this like pushing a cart uphill: it will only work if everyone is pushing forcefully in the same direction.

One often-overlooked challenge in re-setting HR strategy to align with business goals, however, is managing the changes needed to support new workplace initiatives, policies, and procedures. Nearly three-quarters (73%) of HR leaders told Gartner that their workforce is already experiencing change fatigue as it is.

One way to help is to develop training programs that support innovation but also strengthen individual workers’ skills and leadership potential. Skills development is a great way to strengthen employee engagement and loyalty, as well as their commitment to new changes.

For instance, a tech startup aiming to launch groundbreaking AI software in 2025 may prioritize recruiting top-tier engineers, investing in AI training programs, and creating incentives to retain high-performing developers.

A PEO might also assist here by providing access to top-tier benefits, making the startup competitive with larger enterprises for the same talent, as well as training and leadership development programs that support the company’s strategic goals.

4. Embracing Technology: The Future is Digital

Nothing is shaping—and re-shaping—the Future of Work like newly emerging technology, especially with tools like AI-driven recruiting platforms, predictive analytics, and employee engagement apps. In fact, their impact on the workplace cannot be overstated.

“Technological advancements—like AI—are revolutionizing our HR landscape, and we’re exploring if and how they can help us achieve a level of sophistication and effectiveness that aligns with our commitment to innovation,” says Melissa Werneck, the Global Chief People Officer at The Kraft Heinz Co. Making the most of these technologies, and minimizing the risks associated with them, will be key to successful HR strategy planning. 

Gartner recommends taking a long-term view when selecting and implementing new technology: “Rather than focusing solely on short-term efficiency gains, invest in technologies that offer long-term value and innovation.”

Technologies to watch include new recruitment tools that leverage AI to screen resumes, assess candidate fit, and reduce bias, as well as employee self-service systems that can automate tasks like leave requests and benefits enrollment and actually interact with employees conversationally.

One Tip: Avoid Getting Too ‘Trendy’ in HR Strategy

There are a lot of things to get excited about, but companies must also approach the future with humility. As organizations begin planning and preparing for the new year—halfway through the 2020s and already a quarter of the way through the 21^st Century—it might be worth taking a moment to think about past predictions about where the workplace would find itself by now. This can help shape how we think about planning for the future of work.

Advisory firm PwC, for example, predicted in 2017 that as many as 40% to 50% of jobs could disappear due to AI, automation, and digitization by 2025. However, the unemployment rate in the U.S. is continuing to hover around 4% as of October 2024; that’s not a number that suggests huge job losses due to AI.

A fascinating study from MIT earlier this year found: “On net, the study finds, and particularly since 1980, technology has replaced more U.S. jobs than it has generated.” However, the impact is very complicated to quantify because emerging technologies create new jobs even as they erase old ones. “You can think of automation as a machine that takes a job’s inputs and does it for the worker,” the study’s lead researcher explains. “We think of augmentation as a technology that increases the variety of things that people can do, the quality of things people can do, or their productivity.”

Additionally, a few years ago the Society for Human Resource Management (SHRM) predicted that more workers than ever would be working from home by 2025, writing: “A large majority—82 percent—of executives say they intend to let employees work remotely at least part of the time…. Nearly half—47 percent—say they will allow employees to work remotely full time.” This too appears to have been overstated. WFH levels have stabilized post-pandemic, and after a series of return-to-office mandates, only 14% of workers work remotely full-time. This is an increase from the 6% who did so pre-pandemic, but return-to-office mandates are now expected to increase even more in 2025, with major organizations like Amazon and Dell reinstating five-day in-office mandates.

Our takeaway from predictions like these falling short: when planning and preparing for next year, or any year, avoid getting overly caught up in trends. Keep your focus grounded on evergreen needs (e.g., developing effective, continuous talent pipelines) and the specific fundamentals facing your business today and into the foreseeable future.

Prepare Today for Tomorrow’s Success

Ultimately, the path to a successful 2025 starts with proactive preparation. By setting clear goals, engaging in strategic workforce planning, aligning HR initiatives with business objectives, and leveraging the tools and expertise provided by PEOs, small businesses and HR leaders can build resilient, future-ready organizations. Uncertainty may dominate the horizon, but businesses that invest in making themselves competitive with larger enterprises for the same talent will be best positioned to seize opportunities, overcome challenges, and take advantage of the Future of Work.

Ready to optimize your HR operations and boost business productivity? Consider partnering with CoAdvantage, a nationwide Professional Employer Organization (PEO). With our comprehensive and cost-effective HR solutions, including but not limited to: HR administration, HR technology, workers' compensation management, and tailored health insurance packages. From payroll to compliance and risk management, we've got you covered. 

Let us handle the complexities of HR management so you can focus in growing your business. Fill out the form below to discover how CoAdvantage can support your company's success!