Insights

Executives today face a volatile business environment, including sustained talent shortages, rapid technological advancements, and intense change fatigue in the workforce. This is all happening while stakeholders push leaders to cut expenditures while pursuing faster growth.

Gartner research has identified three key challenges executives must tackle in 2025:

• New demands for a future-ready workforce

• The evolving roles of managers

• Emerging talent risks to the organization

Leaders must understand how these forces will shape their organizations, as well as what actions they need to take to remain competitive, attract and retain top talent, and achieve desired business outcomes. Within these three challenges, Gartner has nine predictions for HR leaders in 2025.

New Demands for a Future-Ready Workforce

1. As retirements surge and tech disruption continues, organizations will suffer from a loss of expertise.

In the world’s largest economies, a larger proportion of the workforce will reach retirement age in 2025 than in any previous year on record, draining organizations of their most experienced employees at an accelerated rate.

At the same time, technology has upended the relationship between expert and novice employees across industries. AI has absorbed many of the functions previously provided by interns and support teams, leaving junior employees without the opportunities they need to learn and build expertise. Organizational leaders are beginning to wonder how they will develop future experts when the tasks used to develop novice employees are now being performed by AI.

Exacerbating this expertise drain is a concern shared by both senior and junior employees about a lack of hands-on training. A May 2024 Gartner survey of 3,375 employees found that six in 10 said they aren’t getting the on-the-job coaching they need to support their core job skills.

To address this urgent threat, organizations will need to build their collective intelligence, using technology to ensure that knowledge can easily flow between experts who have skills and novice employees who need skills.

Some organizations have established dedicated knowledge management teams that scrape information directly from experts’ workflows — such as posts in Teams channels, product demos, emails sent providing clarifying answers to questions and Q&A sessions — to identify approaches and actions taken by their in-house experts. They then convert these findings into microlearnings, such as brief videos, articles or activities that teach a single task or activity, that other employees can leverage in their own work. Another approach used by leading companies is to employ workforce management tools that tell supervisors how well employees are performing different tasks and suggest microlearnings that they can push to employees who need more support.

2. Organizations will restructure to take advantage of AI and other technological innovations.

CEOs are focused on growth in 2025, with many citing technology, and AI specifically, as a significant facilitator. But there is widespread anxiety that the same structures that have brought organizations to this point will not be sufficient to propel them forward — and that the potential impact of technological innovations will be hampered by current organizational design.

Limitations from murky decision rights, multi-layered approvals, complex hierarchies, and rigid role designs stood in the way of 2024 being the year AI changed organizations’ trajectories. Leaders fear that without substantial change, these same structural barriers will hold back taking full advantage of future innovations as well.

This year, executives will make substantive changes to how their organizations operate — creating flatter, less-hierarchical organizations, centralizing corporate functions to reduce duplicative work and create consistency, and investing in agile learning practices for cross-functional teams.

3. Companies will adopt “nudgetech” to bridge widening collaboration gaps.

A 2024 Gartner survey of nearly 18,000 employees revealed that only 29% are satisfied with their collaboration at work — down from 36% in 2021. Further Gartner analysis found that satisfaction with collaboration has a critical impact on performance; employees who are satisfied with collaboration are stronger performers on average.

To restore effective collaboration and cohesion, leading companies will experiment with nudgetech, an emerging set of AI-powered tools that enable personalization at scale. For example, it can prompt employees to communicate based on a particular colleague’s preferences (such as email instead of texts), remind managers of their direct reports’ working styles, or generate custom communication tips. Nudgetech can create a double benefit: improved communication and increased behavior change.

The Evolving Role of Managers

4. Seeking fairness, employees will embrace bots over bosses.

Research has found that management by algorithms — their use in scheduling, feedback, performance reviews, and promotion/hiring decisions — can be “alienating” and come with social costs in the workplace. Despite this, employee surveys suggest they found algorithms to be more fair than their human counterparts. A June 2024 Gartner survey of more than 3,300 employees revealed that 57% believe humans are more biased than AI when it comes to making compensation decisions. And an October 2024 Gartner survey of nearly 3,500 employees found that 87% of employees think that algorithms could give fairer feedback than their managers right now.

Employees are embracing the idea that AI tools can increase, rather than erode, fairness in the workplace and highlight contributions that their managers could miss in more traditional performance management processes. Managers will still finalize major decisions, as the human in the loop verifying and validating the bots’ recommendations. But for more everyday activities such as in-the-moment performance feedback, bots are likely to take on an increasing share of managers’ tasks, especially for work that is digitally based, easily quantifiable, or supported by IoT sensors.

5. Organizations will wrestle with how to retain high performers in the age of AI.

Business leaders want employees to use AI to enhance productivity, reduce busy work, and free up their time and energy for more creative and strategic tasks. At the same time, AI tools can serve as a workplace competency filter — a way for mediocre or poor performers to make their most minimal efforts appear highly productive and impactful to their managers and colleagues.

This raises several questions, including:

• Should organizations distinguish between mediocre performers bolstered by AI and actual high performers?

• Without distinguishing between augmented and independent performance, how can employers retain high performers and ensure effective internal talent pipelines and succession plans?

Current best practices suggest managers should focus on the outcome of the work, not the process of getting there. But in the long run, organizations will need to figure out new ways to define and reward high performance as it becomes harder to differentiate employees whose work quality stems from their own efforts from those who are reliant on AI.

HR will need to develop clear guidelines on the AI-generated work that is and is not acceptable and train managers to recognize when employees are relying too much on AI and to intervene appropriately. In some cases, organizations may need to make a more fundamental shift in how they recognize and reward employee contributions.

6. Organizations will shift focus to inclusion and belonging — with unexpected benefits.

In 2024, DEI initiatives faced increasing politicization and scrutiny, creating considerable anxiety for executives, who find themselves in the tricky position of preserving the benefits of DEI while navigating complex and rapidly shifting external dynamics.

In 2025, most organizations will shift their investments toward fostering greater inclusion and belonging for all employees, as opposed to focusing primarily on representation and underrepresented talent. Leveraging inclusion and belonging will be seen as offering a competitive edge.

This shift does not mean workforce diversity becomes unimportant; instead, it becomes a consequence of successful inclusion and belonging programs, rather than the center of attention. Organizations that develop inclusive cultures and fair processes, such as standardized recruiting practices that benefit all candidates, inclusive management, and a focus on collaboration and connection, will experience balanced growth in hiring, promotions, and retention across demographic groups. In this way, workforce diversity becomes an outcome to monitor rather than the goal. If representation of diverse groups declines in the workforce, that serves as an indicator that there are issues with the inclusion and belonging initiatives. With this pivot, organizations will be able to maintain or enhance their workforce diversity while improving talent outcomes and innovation via increased inclusion and belonging.

Emerging Talent Risks to the Organization

7. “AI-first” organizations will destroy productivity in their search for it.

AI can create serious risks, unpredictable costs, and negative behaviors that harm the organization. Many new AI tools come with higher out-of-pocket costs and create significant indirect costs, such as increased work friction, the need for new role design and workflows, barriers to adoption, and more.

A July 2024 Gartner survey of more than 3,500 employees revealed one in five report that the technology their organization has adopted in the past two years has made their job harder, rather than easier or having no impact.

This year, progressive organizations will use an employee-centric lens with people at the center and technology features second. HR should take a leadership role in AI governance conversations to incorporate employee feedback about which workflows can be improved to increase productivity and innovation. This may include advocating for:

• The need for retraining

• New role design and workflows

• Performance measurement that incentivizes new behaviors they want employees to demonstrate

• Learning curves and high workloads that prevent adoption

When organizations take a human-first approach to AI, Gartner research has found that employees are 1.5 times more likely to be high performers and 2.3 times more likely to be highly engaged.

8. Loneliness becomes a business risk, not just a well-being challenge.

In 2023, the U.S. Surgeon General called loneliness a public health crisis. Loneliness isn’t just a well-being risk, it’s an acute business risk. When employees are lonely, their engagement levels lag and their performance suffers. A 2024 Gartner survey of 18,000 employees revealed only 29% of employees globally feel satisfied with the interactions they have with coworkers, down from 36% in 2021.

Proximity alone will not cure loneliness. Gartner analysis revealed on-site workers have been even less satisfied with their interactions at work than hybrid or remote workers every year since 2021.

Progressive organizations will take steps in 2025 to mitigate loneliness as they would any other business risk. Many will begin by targeting interactions within the workforce — actively guiding how employees collaborate with one another by identifying personalized connection needs and providing structured opportunities for employees to learn (or re-learn) how to interact positively with their colleagues. Gartner research finds that organizations that adopt this type of guided collaboration meet their profit goals 10% more often than peers that don’t.

The push to mitigate the business impacts of loneliness can also extend to when employees are off the clock, with some organizations compensating employees for engaging in social activities of their choice. For example, Hinge offers employees a monthly $100 stipend to use for dates, and an increasing number of organizations are offering days off for volunteering activities.

9. Employee activism drives companies to adopt responsible AI norms.

Continued adoption of AI and automation in the workplace is inevitable. But in 2025, employee activism will be a driving force for defining what the employee–AI partnership looks like.

In a July 2024 Gartner survey of 243 CIOs, only 21% said they focus on mitigating the potential negative impacts of AI on employee work, and only 20% said they focus on mitigating the potential negative impacts of AI on employee well-being. If technology leaders are not attempting to assess and reduce the harm caused by AI to their organization’s employees, who is?

In the absence of organizational, government, or vendor action, employees are stepping up to shape the norms of human–technology collaboration themselves via collective action, protests, open letters, and internal advocacy. Progressive organizations will embrace this, co-creating their AI strategy and values with employees, including crowdsourcing AI use cases directly from employees before deciding which capabilities to pilot and incorporating multiple avenues for collecting and evaluating employee feedback.

. . .

Trends lists like this are meant to provoke and inspire, but the sheer pace of change can make it difficult for executives to move past initial interest to substantive action. While most organizations cannot act on each of these nine trends, executive teams should work together to evaluate:

• Which trends are likely to disproportionately impact your organization?

• Which trends are most likely to impact critical talent segments for your organization in the next two years?

• Which trends pose a threat to your strategic goals if you don’t act on them?

The next step is to evaluate which trends offer an opportunity to differentiate your organization with talent or customers. Identifying the trends that offer a comparative advantage will lead to a larger, more substantive return on your investment.

CV Viverito, Ben Cook, Kelly Armstrong, Kate McLaren-Poole, and Michael Falbo also contributed to this research.