From the rapid advancement of artificial intelligence to the continued redefinition of work post-pandemic, change is abounding in HR. And it is a key driver in reshaping HR’s priorities heading into a new year.
Results of HR Executive’s recent What’s Keeping HR Up at Night? research tell the tale, with HR leaders emphasizing the impact of change-related topics on their agenda. While hiring and retaining key talent again claimed the top spot among HR’s challenges, human resources continues to broaden its aperture, seemingly driven by external shifts.
In 2022, for example, nearly 50% of HR professionals surveyed were focused on hiring and retention, a figure that dropped to 36% the following year and 32% in 2024. In 2023, HR also was prioritizing company culture, learning and development, employee engagement and manager training.
Last year, however, the pace of change in HR appears to have reshaped those top concerns, with the nearly 400 HR professionals surveyed responding that their other top challenges are:
- HR technology, including AI
- HR budgets amid economic uncertainty
- Employee engagement
- Change management
As the concerns facing HR leaders evolve to meet changing pressures, the definition of HR leadership excellence itself is changing, says Monique Herena, chief colleague experience officer at American Express and a recently inducted Fellow of the National Academy of Human Resources.
“What defines HR leadership continues to evolve, and it should,” she says. “The context is constantly changing. If we were to have had this conversation even just a few months ago, HR excellence would look different.”
That reality necessitates that HR leaders, Herena says, stay keyed in to the issues impacting employees and leadership to continue to refine their focus in 2025 and beyond.
In the coming months, HR Executive will explore in depth what the What’s Keeping HR Up at Night? findings mean for the future of the profession, including key takeaways like:
1. Economic concerns are driving a refocus of HR priorities.
In 2023, only 8% of surveyed HR professionals cited navigating HR budget issues as a top challenge, a figure that jumped to more than 13% last year, driving it from 10th to third place.
“Economic uncertainty is not new for HR leaders, given the events and market environment of the past five years,” says John Bremen, managing director and chief innovation & acceleration officer at WTW.
However, the predictions of rising benefits and salary costs may make some organizations “particularly judicious in 2025 about their spending priorities.
“Further, even though labor markets continue to loosen around the world, organizations continue to experience skill shortages in certain areas, which will continue to put pressure on costs,” Bremen adds.
Looking to this year, those surveyed are not optimistic that the HR budget context will improve: When discussing the HR technology their organizations most need, only about 18% of respondents were confident the function would have the budget to make these improvements.
2. HR technology is solidified as a core component of HR’s responsibilities.
The rapid proliferation of AI is heightening HR’s emphasis on technology: From 2023-24, HR technology skyrocketed from ninth to second place as a top challenge for HR. The pace of AI adoption may be driving up HR’s concern, as 52% of respondents said their HR functions have not adopted new AI technology in the past year.
Among the most important HR technologies in use, AI was cited by only 5%, with the focus more on HRIS, payroll and performance management tools. Yet, nearly 34% identified AI, gen AI or agentic AI tools among the most-needed HR technologies.
Of HR functions that have integrated AI into HR, the top uses are for writing summaries, creating job descriptions, taking meeting minutes and crafting communications.
“The technology is amazing,” HR Executive of the Year Nickle LaMoreaux, CHRO of IBM, told HR Executive earlier this year. However, gaining traction with AI integration has “little to do” with the technology itself—and “everything to do with behavior change,” she says.
3. Despite the distraction of money and tech concerns, L&D remains a priority.
In 2023, learning, development and training emerged as top HR challenges—but none made the top five in 2024.
Despite economic concerns and tech integration claiming more of HR’s attention, HR leaders are still spending the second-most amount of time in their day-to-day schedules on leadership development following HR administration. HR respondents appear to recognize the potential of leadership development for employee experience, with such training emerging as the top expected driver of EX in 2025; upskilling and reskilling were also cited as significant contributors.
Experienced leaders and managers are reaching retirement eligibility at a “rapid pace,” Bremen notes, while many organizations are facing “leadership skills shortages” among the incoming class of leaders. These are making leadership development and succession planning critical top priorities for senior leaders and boards of directors.
“HR teams need to be ready and equipped for increased demand” for learning and development, particularly for leadership, in 2025, Bremen says.
4. HR is focused on change management to prepare for ongoing shifts.
Last year’s What’s Keeping HR Up at Night? survey included “change management” as a choice for HR’s top challenge for the first time—and it immediately broke into the top five. Similarly, cultural transformation—another new addition to this year’s research—placed eighth.
“Change management has always been important,” says Megan Ackerson, CHRO of cloud-based software provider Xactly Corp. Now, “it’s nonnegotiable, and it’s the ticket to the game.”
Efforts to advance change initiatives shouldn’t be viewed as check-the-box processes; rather, change management can be “conversational”—embedded both formally and informally. Ackerson says HR needs to help organizations make “change management a part of their DNA.”
5. HR stress continues to climb.
Alarmingly, 76% of HR professionals surveyed said their stress levels increased somewhat or dramatically over the past year. Apart from the profession’s increasing focus on transformation, the research highlights other potential contributors to HR stress.
For instance, HR administration and operations outpaced all other responsibilities in what HR professionals are spending their time on, suggesting the impact of repetitive tasks on HR’s bandwidth. What’s more, many professionals said their functions are ill-prepared for the future: About half said their department is not fully staffed, while more than half have no succession plan in place for future HR leadership.
Bremen says CHROs spent “considerable time” last year addressing the fact that HR professionals are often “first responders” to complex, high-stress situations, such as workplace accidents, security incidents, layoffs, restructurings and employee life changes.
“While all groups in organizations experienced stress in 2024,” he says, “there are elements that are unique to HR and, in most cases, support resources specifically designed for HR professionals are not available.”
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