Top 7 predictions for HR and the future of work in 2025

 

1. Expect polarisation in the workplace to deepen

The People Space's prediction

Polarisation will become a critical issue for HR and people leaders, especially in politically divided regions. Companies that fail to foster psychological safety and provide conflict resolution resources will see declines in collaboration and engagement, while those that actively address polarisation will gain a competitive edge in retaining talent.

Why we think this

Workplace polarisation continues to challenge employers as societal divisions spill into the office. Political tensions, including Donald Trump’s upcoming presidency in the US, ongoing global conflicts and widening cultural and financial divides will spill over into workplace dynamics in 2025. Workplace policies like return-to-office (RTO) mandates will exacerbate such divisions, as seen in increased turnover among senior and skilled employees following such policies. 

In 2024 The Wall Street Journal reported that Salesforce implemented a policy restricting debates about the Gaza conflict on Slack, citing concerns over productivity and escalating tensions. Similarly, Hilton expanded de-escalation training for frontline staff to manage politically charged interactions with customers.

This reflects broader societal trends, as Pew Research in the US highlights a significant rise in intolerance toward opposing political views, with Democrats and Republicans increasingly describing one another as closed-minded or dishonest. 

The evidence

A survey conducted by the Society for Human Resource Management found that in the wake of the June 2024 debate between President Joe Biden and incoming president Donald Trump, the number of reported uncivil acts in US workplaces exploded to 201 million a day. 

Research last year on the Brazilian labour market over two decades highlights how political polarisation extends into apolitical domains, with firm owners demonstrating a striking preference for hiring employees who share their political affiliations – stronger even than preferences based on shared gender or race. This ‘political assortative matching’ not only reinforces echo chambers within workplaces but also suggests that some business owners may prioritise ideological alignment over firm growth or productivity. 

Gartner reports that 59% of employees report that their organisation does not actively discourage political conversations at work. However, just 16% say their organisation provides tools to help managers understand and manage social and political issues at work and only 15% said their organisation provides similar tools to employees.

The experts say

“Organisations need to provide managers and employees with the necessary tools to support civil conversations. It’s also important for organisations to be continually invested in building an inclusive and resilient culture, one that can transcend political and social issues.” Alexander Kirss, senior principal in the Gartner HR practice

HR and leadership actions

• Provide managers and employees with training to navigate and resolve conflicts constructively. This includes equipping teams with strategies to address tensions arising from polarised viewpoints while maintaining respect and collaboration.
   
• Train leaders to create environments where employees feel safe expressing diverse perspectives. Encourage open dialogue, reinforce respect for differing opinions and model inclusive behaviour to reduce the risks of polarisation.
   
• Develop formal opportunities for employees to engage in structured, facilitated discussions on sensitive topics. Use tools like employee forums, focus groups and anonymous feedback channels to surface concerns and foster mutual understanding.
   
• Draw on frameworks like human rights principles to guide decisions and actions, as clinical professor at NYU Stern School of Business and the executive director at Ethical Systems Alison Taylor advocates in Higher Ground: How Business Can Do the Right Thing in a Turbulent World.  Businesses should take principled, consistent stances on social issues and avoid reactionary responses, focusing instead on fostering trust and cohesion through genuine impact.
   
• Clearly articulate organisational values and ensure that policies, decisions and public statements align with them. Employees are more likely to trust leadership when they see integrity and consistency, especially in divisive times.
   
• Embed empathy-building initiatives into leadership development and team dynamics. Provide resources to help employees understand diverse perspectives and challenge biases, fostering a culture of inclusion and collaboration.
   
• Recognise the emotional toll that polarisation can take on employees. Offer access to mental health resources, including counselling services and employee assistance programmes, to support those navigating stressful environments.
   

• Use engagement surveys and sentiment analysis to identify areas where polarisation may be affecting morale or productivity. Proactively address these issues to prevent deeper divides within the workforce.

   

2. AI will reshape workflows faster than expected

The People Space's prediction

By the end of 2025 more than 50% of large organisations will have adopted generative AI tools in core workflows related to work, such as operations, sales, HR and IT. However, adoption will remain uneven, with digitally mature sectors like IT, finance and marketing leading the way, while functions such as traditional manufacturing lag behind. Additionally, the emergence of humanoid robotics in manufacturing and logistics workflows will signal the early stages of a transformative shift driven by generative AI advancements. HR leaders will need to address skills gaps, ethical concerns and organisational readiness to ensure the successful integration of generative AI and robotics into the workforce.

Why we think this

Advancements in AI and robotics technology and the rapid growth of AI-driven tools are reshaping the nature of work. The pace of adoption is accelerating due to economic pressures and the need for efficiency, making 2025 a pivotal year for AI integration. For example, the Genesis project’s open-source generative physics engine (created after a 24-month large-scale collaboration involving more than 20 research labs) enables faster and scalable training of robots and AI systems, Genesis allows robots to master one million skills in one billion simulations, illustrating how generative AI is moving from concept to practical applications across industries. Early adopters in manufacturing and logistics are likely to gain competitive advantages by addressing labour shortages and enhancing productivity through autonomous systems.

While AI enhances efficiency, its rapid adoption creates challenges, including skill gaps and ethical considerations in decision-making. HR leaders must balance the opportunities AI offers with its potential to displace jobs or exacerbate inequities. The combination of generative AI and humanoid robotics represents a new frontier for operational efficiency.

The evidence

Building on the existing trajectory it’s likely that generative AI adoption in HR and work will cross 50% in 2025 as tools become more accessible and use cases mature. 

According to Statista 50%-70% of respondents with high expertise are already using generative AI in limited or at-scale implementations, particularly in IT, cybersecurity and product development. Capgemini reports that generative AI adoption has surged, with 24% of organisations integrating it into some or most of their locations or functions in 2024, up from 6% the previous year. It says 82% of organisations plan to integrate AI agents for autonomous operations within one to three years.

Meanwhile Salesforce research finds 61% of desk workers currently use or plan to use generative AI with 86% of IT leaders prioritising its integration in the next 18 months. However, concerns about skills gaps and data security are prevalent, with over half of employees unsure how to use generative AI safely or effectively.

According to a BCG study in India, while only 26% of companies are seeing tangible value from AI, the leaders focusing on core business processes are achieving 1.5x higher revenue growth and significant competitive advantages.

Meanwhile Udemy’s 2025 Global Learning & Skills Trends Report shows an 859% year-on-year growth in generative AI-related productivity learning, indicating a significant acceleration in interest and adoption. However, this same report reveals a critical gap in leadership readiness. While 90% of employees believe their leadership teams are key to successful GenAI transformations, fewer than half (48%) feel that their leaders are currently equipped to manage this change. 

The experts say

“2025 might open up a new paradigm for RL (reinforcement learning) in robotics. Are we near an inflection point for humanoid general purpose robots? Michael Spencer, future of work expert

HR and leadership actions

• Address the generative AI skills shortage by offering targeted training programmes that equip employees with the technical proficiency needed to use AI tools effectively. Collaborate with industry partners and training providers to deliver courses tailored to different roles and levels of expertise.
   
• Build ecosystems that combine technical AI upskilling with training in creativity, critical thinking and ethical decision-making. These skills are essential for employees to effectively collaborate with AI and maintain a human-centric approach to problem-solving.
   
• Develop clear policies outlining how generative AI will be used across the organisation. Include provisions addressing data privacy, ethical considerations and accountability. Transparency fosters employee trust and ensures responsible AI implementation.
   
• Communicate openly about how generative AI and robotics will augment human roles rather than replace them. Highlight success stories, involve employees in the integration process and provide regular updates to reduce anxiety and foster acceptance.
   
• Prioritise AI adoption in functions with high potential for return on investment, such as operations, sales and HR, where integration challenges are manageable. For sectors like traditional manufacturing adopt a phased approach that balances readiness with potential benefits.
   
• As humanoid robotics emerge in workflows like manufacturing and logistics, actively assess organisational readiness. Develop strategies to address operational changes, redefine roles and retrain employees for collaborative work with robotics.
   
• Engage cross-functional teams to identify and mitigate ethical concerns, such as bias in AI algorithms or the impact of robotics on employment. Embed ethical frameworks into AI implementation to align with organisational values and societal expectations.
   

• Regularly evaluate the effectiveness of AI and robotics integration through KPIs such as productivity gains, employee adoption rates and satisfaction levels. Use feedback to refine strategies and address any emerging challenges.

   

3. Productivity pressures will drive radical operational changes – and managers will lose out

The People Space's prediction

Organisations that leverage a mix of AI-driven productivity enhancements, streamlined organisational structures and flexible policies will outperform competitors in retention and engagement metrics by 10% or more. Conversely, those that fail to balance productivity demands with employee wellbeing will face higher turnover and burnout rates. A growing trend of flattening hierarchies and middle management reductions will reshape workplace dynamics, with significant implications for leadership and operational efficiency.

Why we think this

Financial pressures, including inflation, cost-of-living challenges and tighter corporate margins, are squeezing budgets and forcing companies to find radical ways to enhance productivity while controlling costs. Employers are turning to AI, workflow automation and hybrid models to maximise efficiency without increasing costs. Gartner highlights that CEOs expect a 17% productivity boost from AI while research finds that hybrid working improved job satisfaction and reduced quit rates by one-third.

However, these productivity-focused changes risk coming at the expense of employee wellbeing. As companies flatten hierarchies and reduce middle management roles, like Google’s 10% reduction in top management, or introduce quiet firing in the guise of strict return-to-office mandates, employees may feel unsupported, leading to further disengagement and attrition.

The evidence

Workplace pressures are nearing a tipping point as employees increasingly struggle to withstand the relentless push for productivity at the expense of their wellbeing and balance. According to the American Psychological Association (APA) around two in five people (43%) say that during their workday they typically feel tense or stressed out. That number rises to more than three in five (61%) among workers who experience lower psychological safety at work. A majority (67%) of workers reported experiencing in the previous month at least one outcome often associated with workplace burnout, such as lack of interest, motivation or low energy, feeling lonely or isolated and a lack of effort at work. Some 15% workers reported experiencing what they characterised as a somewhat or very toxic workplace. Those experiencing higher psychological safety were 10 times less likely than those experiencing lower psychological safety to describe their workplace as toxic (3% vs. 30%).

A SHRM survey of US workers finds that 44% are burned out from their work. Workers who are burned out from their work are nearly three times more likely to be actively searching for another job, with 45% of burned-out workers actively looking for a new job compared to 16% of workers who aren’t burned out are actively looking for a new job.

Evidence finds a strong positive relationship between employee wellbeing and firm performance. Companies with high levels of workplace wellbeing outperform standard benchmarks in the stock market. 

Meanwhile, the Bureau of Labor Statistics reported 500,000 white-collar job cuts in September 2024 alone, underscoring how companies are aggressively restructuring.

The experts say

"The tools of tomorrow, from AI algorithms to digital twin mirroring, for example, are the instruments that will amplify human potential. Those that embrace these technologies and the manner in which people work will unlock unprecedented levels of productivity and innovation.” Deborah Perry Piscione and Josh Drean, authors of ‘Employment is Dead: How disruptive technologies are revolutionizing the way we work’.

HR and leadership actions

• Shift the focus from ‘doing more with less’ to ‘achieving more with less stress’  Build resilient teams by integrating flexible work policies, employee autonomy and AI-driven productivity tools that empower employees to focus on high-value tasks while reducing burnout.
   
• In response to flattened hierarchies, redefine leadership by distributing responsibilities across teams. Equip managers to focus on strategic thinking, coaching and fostering cross-functional collaboration, ensuring that communication and accountability are maintained despite structural changes.
   
• Keep middle managers engaged by implementing rotational leadership models that allow them to take on diverse roles across the organisation. This approach builds adaptability, broadens skill sets and maintains morale in times of structural change.
   
• Leverage AI to enhance operational efficiency, but complement these gains with human-centric initiatives such as flexible schedules, mental health resources and wellbeing programmes. This balance ensures that employees remain engaged and protected from burnout.
   
• Empower teams to make decisions and take ownership of their work by providing clear objectives and the tools they need to succeed. Create a culture where trust and accountability replace micromanagement, especially as hierarchies flatten.
   
• Prepare managers to thrive in leaner organisational structures by offering training in adaptive leadership, emotional intelligence and technological fluency. Equip them to lead with clarity, inspire teams and navigate ambiguity effectively.
   
• Flattening hierarchies and restructuring roles can create uncertainty. Offer transparent communication, clear transition plans and access to support resources to help employees navigate these changes with confidence.
   

4. Forced return-to-office will backfire and hybrid work will cement itself as the dominant model

Prediction: By the end of 2025 organisations embracing hybrid work models will report 20% higher employee satisfaction and engagement rates than those enforcing full-time office mandates. Hybrid firms will also gain a disproportionate share of talent from companies with inflexible policies. Firms mandating strict return-to-office (RTO) policies will face a 20–30% higher turnover rate, particularly among senior and skilled employees.

Why we think this

Evidence finds that RTO mandates show no clear impact on future profits or stock performance but are more likely to be implemented by companies with older, male CEOs, those based in large cities with inexpensive office space or those with historically poor financial results. However, RTOs often come at a cost, leading to higher attrition rates, particularly among tenured employees, and declines in employee sentiment, as reflected in platforms like Glassdoor.

Research also finds that RTO policies lead to significant brain drain, especially among skilled employees, and lengthen recruitment times. Meanwhile, companies with hybrid models, such as Airbnb, continue to attract top talent. The backlash against rigid return-to-office mandates (for example at Amazon) supports the argument that flexibility significantly impacts satisfaction and engagement. Employee preferences for flexible work, combined with generational shifts, make hybrid models a competitive advantage. 

The evidence

Research into the employment histories of over three million employees of the largest tech and finance firms included in the S&P 500 index finds significant increases in employee turnover and also significantly longer time to hire new employees after RTO mandates. The spike in turnover rates is more pronounced for female employees, senior employees and more skilled employees. So, these firms lost their best workers.

Another study finds that RTO mandates led to a notable decline in various aspects of job satisfaction, including overall satisfaction, work-life balance and views on senior management. It also finds no impact on financial performance, suggesting that forced RTO does not mean improved productivity. In fact, numerous studies find that hybrid appears to have a flat impact on productivity, and in some cases a positive impact. This contrasts with fully remote models which have a range of impacts from -30% to +13% (average about -10%). Meanwhile, a study published in Nature concludes that hybrid working from home improves retention without damaging performance. 

Employees appear to be pushing back more on RTO mandates. December 2024’s Survey of Working Arrangements and Attitudes asked what people would do if their employer required a 5-day return to office. Only 44% reported they would comply. Two years ago 53% reported they would have complied. 

In the 2024 Work in America survey the majority of workers agreed that they could be just as effective at work if they only worked four days a week (81%) and would be happier at work if they only worked four days a week (79%). In fact, two-thirds of employed adults agreed that the four-day workweek will become the norm in America in their lifetime (67%).

Unispace reports that 42% of those that had mandated returns experienced higher than normal employee attrition, with 29% struggling to recruit.

The experts say

 “Forcing so-called 'in-person collaboration' through a return-to-work order is detrimental to workplace culture – and will actually cause productivity to plummet.” Dr Nahla Khaddage Bou-Diab, CEO of AM Bank

HR and leadership actions

• Empower employees to choose a balance between in-office and remote work that aligns with their personal and professional needs. Create flexible policies that are supported by clear guidelines to ensure accountability and performance.
   
• Reimagine office environments to make them attractive, purposeful spaces that foster creativity, collaboration and a sense of belonging. Incorporate features such as collaboration zones, wellbeing spaces and technology-enhanced meeting rooms to create a compelling reason for employees to return.
   
• Use employee surveys, engagement metrics and productivity data to continuously refine hybrid work policies. Align them with workforce preferences while ensuring business objectives are met. Regularly communicate insights and policy adjustments to build trust.
   
• Train leaders to effectively manage hybrid teams, focusing on building trust, promoting inclusion and fostering collaboration without mandating physical presence. Leadership styles should prioritise outcomes, communication and team cohesion.
   
• Create transparent performance metrics that are consistent across remote and in-office roles. Ensure that employees understand how their contributions are measured and provide ongoing feedback to support their success.
   
• Actively ensure that remote employees have equal access to career development, mentoring and networking opportunities. Build virtual programmes that foster growth and visibility for employees who are not physically present.
   
• Adjust benefits to support hybrid workers, such as home office stipends, commuter subsidies and wellbeing initiatives. Address the diverse needs of employees to demonstrate a commitment to their success, regardless of where they work.
   
• Organise intentional in-office and virtual events to maintain team connection and culture. These might include team-building days, virtual coffee breaks or hybrid workshops to keep employees engaged regardless of location.
   

5. DEI strategies will become more targeted and measurable

The People Space's prediction 

Companies that align diversity, equity and inclusion (DEI) goals with measurable outcomes are likely to experience significant improvements in employee retention and innovation metrics by the end of 2025. While some firms are retreating from DEI initiatives, those that fail to adapt may struggle to compete for top talent, especially in markets where inclusivity is highly valued.

Why we think this

Global disparities in DEI strategies highlight the importance of measurable outcomes. While we are seeing high profile rollbacks in the US in particular, with companies such as Walmart, Lowes and Ford backing away from previous strategies, regions like APAC and Europe are advancing inclusive policies. The anticipated Employment Rights Bill in the UK includes new measures to help make the workplace more compatible with people’s lives, including making flexible working the default where practical. Large employers will be required to create action addressing gender equality, including supporting employees through the menopause, and protections against dismissal will be strengthened for pregnant workers and those returning from maternity leave, demonstrating how regulatory support can drive meaningful change in DEI efforts.

This is despite a recent meta-analysis encompassing over 600 reports and 2,600 data points that finds that the link between diversity and team performance is far weaker – and much more context-dependent – than we’ve been led to believe. Diversity explains less than 1% of the variance in team performance. Yet teams engaged in innovation or complex problem-solving clearly benefit from cognitive diversity, according to the analysis. And we need more of this in today’s workplace as AI takes away routine tasks. 

But, more importantly, performance on its own is not the reason to ‘do DEI’, It’s the right thing to do – morally, legally and reputationally. It widens the talent pool, improves innovation, fosters inclusion and builds organisations where employees genuinely feel valued. These are the outcomes that organisations should focus on. 

The evidence

A report from Korn Ferry and the Global Black Economic Forum, which analysed thousands of public companies, said that “companies see 19% higher innovation revenue and inclusive teams are 75% more likely to execute ideas successfully” when they commit to DEI. Furthermore, empowering diverse teams results in an 87% increase in better solutions and a 70% higher chance of accessing new markets.

Technology firm Cisco recently reaffirmed its commitment to DEI, which is rooted in embedding diversity principles across recruitment and employee development processes. Its initiatives, such as diverse talent accelerators and technology-driven bias-free job postings, ensure inclusivity from the start. Recognised for its efforts, including LGBTQ+ inclusion, Cisco’s focus on DEI contributes to industry-leading retention rates and a reputation as a top employer, demonstrating the strategic value of embedding diversity at every level.

Rolls-Royce is also embedding diversity, inclusion and belonging (DIB) into its core business strategy, recognising it as a "strategic priority." The company focuses on creating psychologically safe environments and equipping leaders with the skills to foster inclusivity, treating inclusion as a critical skill. By broadening diversity definitions to include factors like economic background and neurodiversity Rolls-Royce uses targeted training to empower managers to drive inclusivity effectively. 

The experts say

"Despite the rhetoric we are seeing around DEI, it remains a smart business strategy that enables organisations to engage all talent around these issues, while strategically driving innovation, growth, and ultimately, their competitive advantage.” JT Saunders , chief diversity officer at Korn Ferry Institute

“Diverse teams are the most productive . . . the most innovative. There’s a business case for diversity.” Jack Naidoo, leader of people and communities for Europe, the Middle East and Africa Cisco

HR and leadership actions

• Incorporate DEI objectives into the core business strategy, using measurable targets such as leadership diversity and pay equity. Leverage employee feedback tools and data-driven insights to identify gaps and track progress, fostering transparency and trust among employees.
   
• Equip leaders at all levels with the training and resources necessary to integrate DEI into their decision-making. Research highlights that organisations investing in DEI leadership development see better outcomes, as empowered leaders are essential for driving sustainable change and aligning inclusivity with business success.
   
• Build equitable talent management systems through inclusive design. These systems ensure fairness, address bias and unlock the potential of underrepresented employees, creating opportunities for those often overlooked.
   
• Integrate equity-focused strategies into the workplace by leveraging technology and advanced analytics. These tools streamline evidence-based approaches, enabling organisations to embed inclusivity across their culture and operations seamlessly.
   
• Recognise the demand for equity-driven initiatives from employees, consumers and community groups. Align DEI efforts with stakeholder expectations to enhance organisational impact, build trust and strengthen the company’s reputation.
   
• Integrate DEI goals into business strategy with clear metrics like leadership representation and pay equity. 
   

6. Skills-based hiring will become the norm

The People Space's prediction

By late 2025 at least 25% of companies will actively prioritise skills over traditional qualifications in hiring decisions, particularly for technical and rapidly evolving roles. Organisations that invest in internal upskilling and mobility will report faster time-to-productivity and improved retention, but widespread adoption will be gradual due to implementation challenges and entrenched reliance on traditional hiring practices.

Why we think this

Acute skill shortages in high-demand areas like AI, cybersecurity and data analytics are reshaping the hiring landscape. Traditional recruitment methods relying on qualifications and linear career paths no longer meet the needs of rapidly evolving industries. Organisations are recognising that the pace of change requires a more agile approach to hiring and workforce development, one that prioritises specific skills over formal credentials.

Economic pressures and cost constraints further amplify the need for efficiency in hiring and development strategies. Employers can no longer afford prolonged vacancies or mis-hires, especially in roles critical to innovation and business growth. By shifting to skills-first hiring and investing in internal mobility companies can fill these gaps faster while maximising the potential of their existing workforce.

In addition, the growing demand for workplace diversity and inclusion is propelling this change. Skills-based hiring creates opportunities for individuals from varied backgrounds, allowing organisations to access untapped talent pools. When combined with advancements in assessment technology this approach offers a practical solution to the inefficiencies and biases inherent in traditional recruitment processes.

However, actual implementation remains limited: the vast majority of employers still rely on traditional resumés and only a subset of companies has embedded skills-first strategies, which is why we are cautious about putting a figure to this. Key challenges, such as evaluating large volumes of assessments, lack of confidence in assessment quality and resistance to adding steps in the hiring process, persist. This explains why adoption lags behind intent, despite the clear benefits.

Skills-based hiring is more prevalent in industries like tech, marketing and publishing but remains rare in traditional sectors like education and transport. Technical and hybrid roles are driving the shift, while in-person companies lag behind remote-first organisations.

This prediction aligns with emerging trends we see across industries: forward-thinking companies are moving towards a ‘skills-as-currency’ mindset, treating employee capabilities as dynamic assets that must be aligned with business objectives. While adoption remains uneven, the momentum for skills-based hiring is undeniable, driven by both necessity and the promise of better outcomes in innovation, retention and workforce adaptability.

The evidence 

Recent data underscores the need to shift towards skills-based hiring and internal mobility, particularly in response to acute skill shortages and evolving job market dynamics. The Autumn/Winter 2024 UK Labour Market Report by Magnit highlights significant challenges in retaining specialised talent. IT project managers and cybersecurity engineers are changing jobs at nearly double the average rate, indicating heightened competition for these skills. 

According to Test Gorilla 60% of companies are experiencing a skills shortage exacerbated by changing work patterns and staff increasingly changing careers. Hybrid and remote companies have tackled this challenge by tapping into global talent pools to find the best candidates, so it’s no surprise to find that these companies are using skills-based hiring more (at 64% and 78% respectively) than in-person companies, which stand at 57%.

Other surveys show strong interest in skills-based hiring, with 54% of UK employers planning a shift and significant benefits cited in diversity, retention and innovation. This research from HireVue finds internship experience and “proficiency in career readiness” are playing a larger role than academic achievement in recruitment processes. UK firms are reducing their dependence on minimum grade requirements for candidates, with the percentage dropping to 44% in 2023, and fewer  than 10% setting a minimum UCAS points tariff.

Pending legislation in the US which is expected to be signed before president Joe Biden leaves office aims to promote skills-based hiring practices. The Chance to Compete Act puts in place a Federal workforce hiring policy that places greater emphasis on prospective employees’ work experience rather than their educational credentials. This legislative backing is expected to encourage more organisations to adopt skills-focused recruitment strategies.

The experts say

“When we move past traditional requirements like mandatory college degrees we empower ourselves as hiring managers. By valuing skills and competencies we deepen our insight into what a role truly demands, leading to better hiring decisions,” Eryn Marshall VP, people at Oyster

HR and leadership actions

• Clearly articulate the skills and competencies required for each position. This involves moving beyond traditional job descriptions to focus on the specific abilities that drive success in the role.
   
• Utilise structured interviews and practical assessments to evaluate candidates' skills accurately. This approach reduces reliance on subjective criteria and enhances the objectivity of the hiring process.
   
• Encourage ongoing employee development by providing access to training and resources that enable skill enhancement. This commitment to learning ensures that the workforce remains adaptable to changing business needs.
   
• Create pathways for employees to transition into new roles within the organisation by recognising transferable skills. This practice not only retains talent but also maximises the utilisation of existing capabilities.
   
• Involve key stakeholders, including hiring managers and senior leadership, in the shift towards skills-based hiring. Their buy-in is crucial for successful implementation and sustainability of the new approach.
   
• Ensure adequate funding and resources are dedicated to the transition, including investments in training, technology and process redesign. Proper resourcing underscores the organisation's commitment to the initiative.
   

7. Continuous learning will be a strategic imperative

The People Space's prediction

By the end of 2025 organisations that implement continuous learning programmes will experience significantly higher rates of skill adoption and employee engagement compared to those relying solely on traditional training methods. Firms failing to adapt will encounter widening skill gaps and diminished workforce agility.

Why we think this

The rapid pace of change in today’s workplace demands a more dynamic approach to skill development. Traditional training methods, which often occur in one-off sessions, struggle to keep up with the continuous evolution of skills needed to thrive in a competitive environment. In contrast, continuous learning programmes integrate learning into the flow of work, enabling employees to acquire, apply and refine skills in real time.

Organisations face mounting pressures from technological advancements, such as automation and AI, which are reshaping job roles at an unprecedented speed. Continuous learning ensures that employees remain agile, adapting quickly to new challenges while contributing to organisational resilience and innovation.

Moreover, employee expectations around development opportunities have shifted. Workers increasingly seek employers that invest in their growth, seeing it as a key factor in career satisfaction and longevity with a company. Continuous learning fosters a culture of development, which not only attracts top talent but also strengthens retention by demonstrating a commitment to employee success.

Finally, businesses that fail to adopt continuous learning risk falling behind. As skill gaps widen these organisations are likely to face reduced productivity, diminished agility and challenges in retaining high-performing employees who prioritise growth opportunities. The companies that succeed will be those that treat learning as a strategic imperative, embedding it into every aspect of their operations.

The evidence

As job demands evolve lifelong learning enables individuals to continuously acquire and update their knowledge and skills, fostering adaptability, employability and personal growth. The labour market's shift toward complex, hybrid roles and service-oriented industries highlights the growing importance of lifelong learning. This transition reduces the demand for mechanical-routine workers and emphasises the need for autonomous, flexible and creative individuals capable of problem solving.

Beyond individual benefits it also contributes to broader societal goals, including social cohesion, political stability and economic equality, by providing opportunities for disadvantaged groups. The European Area of Lifelong Learning frames this approach as essential for addressing the dynamic nature of modern work, where creativity, problem-solving and autonomy are increasingly prized. 

The World Economic Forum says that 50% of all employees will need reskilling by this year, as adoption of technology increases. 

Research from Pearson finds that nine in 10 (89%) employers agree that when thinking about their business their employees will have to continue learning new things throughout their jobs to keep up-to-date with new skills or retrain in a new area. A paper by Durham University’s Asrif Yosoff argues that “Given their commitment to continual improvement, an organisation's lifelong learners can potentially increase performance overall.”

To remain competitive in the global economy a firm’s workforce has to have adequate skills and be committed to keeping those skills up-to-date. More comprehensively, informal learning in the workplace could be defined as the acquisition of skills through learning by doing as well as by watching other workers, taking instructions and receiving supervision or feedback from supervisors or co-workers. Andries De Grip, professor in the Research Centre for Education and the Labour Market at Maastricht University says that on-the-job learning is more important for workers’ human capital development than formal training. He cites a Dutch study that shows that workers spend on average 35% of their working time on activities from which they learn. This is far more than the time workers spend in formal training courses: informal learning activities account for 96% of the time in which workers are engaged in activities from which they learn.

McKinsey Global Institute predicts the need for workers to transition from declining occupations to rising ones. In Europe, it says, a faster technology adoption scenario could be associated with productivity growth of roughly 2-3% per year, requiring some 12 million occupational transitions, or roughly double the pace of occupational shifts in the pre-pandemic period. Occupational transitions will need a huge shift in skills. According to McKinsey more than one in four respondents report that failing to capture critical skills could harm financial performance and limit their ability to leverage AI. To address skills gaps companies are turning to three main strategies: retraining, hiring and contracting. Retraining is the most common approach, with executives planning to upskill an average of 32% of employees, compared to 23% through hiring and 18% via contracting. This trend varies by industry, with the automotive sector planning to retrain 36% of its workforce, while financial services expect 28%. 

The experts say

“With the rapid pace of AI and technological advancements, workplace skills are becoming outdated faster than ever before. In 2025 businesses will need to adopt a data-driven approach to training. This ensures learning programmes not only address immediate challenges but also build capacity for future growth." Rene Janssen, CEO of Lepaya

HR and leadership actions

• Design learning platforms that integrate seamlessly into daily workflows, enabling employees to learn on the job and apply new skills immediately. 
   
• Use AI-powered tools to personalise learning paths and make training flexible, accessible and relevant to individual needs.
   
• Prioritise the development of skills critical for the future, such as leadership, creativity, emotional intelligence and AI literacy. These capabilities are essential for navigating change, fostering innovation and ensuring workforce resilience in an unpredictable business landscape.
   
• Incorporate peer-to-peer learning into training programmes to enhance collaboration and knowledge sharing. This approach reinforces real-world application, ensures long-term skill retention and creates a culture of collective learning.
   
• Use data and feedback from employees to continually refine and update learning programmes. Regular assessments of skill gaps and training effectiveness can ensure that learning initiatives remain aligned with evolving organisational goals.
   
• Make learning a core part of your organisational DNA by rewarding and recognising skill development. Encourage leaders to model lifelong learning behaviours and communicate the value of continuous development to employees at all levels.
   
• Collaborate with external providers, industry groups and academic institutions to access cutting-edge training resources and stay ahead of industry trends. These partnerships can offer specialised expertise and ensure that your organisation is equipped with the latest tools and insights.
   
• Track the outcomes of learning initiatives through clear metrics such as skill adoption rates, time-to-productivity and employee engagement. Use these insights to demonstrate ROI and refine strategies to maximise effectiveness.