HR Trends for 2025: Part 1 Technological Transformation

Episode 21: HR Trends for 2025: Part 1 Technological Transformation

Trina Sunday: Over the next three episodes, I’m unpacking AI HR’s HR Trends Report for 2025. 2025 will be a year of transformative change, again with disruptive forces set to really reshape the world of work. And this episode focuses on how technology and AI are now the business reality, transforming how organisations function at every level. Welcome to Reimagining HR with Trina Sunday, the rule breaking podcast where we challenge our thinking and our current people practise. This podcast is for time poor HR teams and business leaders who are feeling the burn, lacking laughs and not feeling the love. I’m Trena, your host and I’m here to cut through the bs, explore different ways of thinking and create high impact HR functions. Because happier, healthier organisations are better for our people and our bottom line. So if you are keen to flip traditional HR on its head, hit the follow or subscribe button so you’re the first to know when new episodes drop. I’m here to help and also to shake things up. So let’s get started. AOA HR have released their HR Trends Report for 2025 and it’s all about embracing disruption. We kind of thought we might be getting over that right team, but we’re not. And over the next three episodes I’m going to unpack what the main themes are, behind the research and what looks to be ahead of us in 2025. This episode is about technological transformation and how it’s become our business reality. Technology and AI are no longer a future trend, right? It is our current reality. It’s transforming how our organisations function at every single level. And the pace of change continues to get faster and faster. It’s accelerating, right? And it’s making the effective integration of technology in AI really critical for organisations to stay competitive. And it feels like a tectonic shift to most of the HR people in my community. And it’s requiring us to really be strategic about rethinking roles, skills and processes.

And it’s prompting us in HR to consider how these transformations are going to reshape the organisation. our workplaces and how we manage our people. But it’s beyond adopting new tools, right? HR needs to focus on instilling a really different mindset here and it’s embracing innovation and agility and anti fragility, which I’ll talk about later in our employees, to really take full advantage of technological advancements. And there’s a few different trends that AI HR have kind of come up with as part of this theme. On technological transformation. So I thought I’d deep dive into what they’re about and the world according to Trina. One of the first trends is around us moving from AI adoption to AI adaption. So they’re talking about the fact that there’s untapped value in AI. It increases employee productivity and a recent study showed by BECG Consultants was that it achieved a 40% increase in the quality of their work by using ChatGPT. But to unlock these gains, employees need to have the confidence to explore its potential without fear of mistakes. And for those of us in hr, we have minor conniptions around the accuracy of AI and the impact that it might have on our compliance if we don’t get it right. And so we have this AI technostress that’s happening. We’ve got the accelerated adoption of generative AI gen AI and resulting integration into everyday work processes. And that’s really quickly changed how jobs are performed. And our regulatory bodies are struggling to keep up with the realities of AI on the ground and our company policies are lagging behind as well. So employees are also worrying on top of all of that, that their roles will become obsolete because of AI adoption. So stressing everybody out, right, AI stress heads, unless you’re a part of the technology transformation and you’re on the flip side of being a master at that. So it’s all about balancing interest, though. So as a result, HR is being pulled in multiple directions as we try to manage the organisational need for cost efficiency with workforce anxiety. So we have the opportunity, though, to be the expert in the room.

We have the opportunity to be leading edge HR teams who are taking control and enabling the organisation to achieve AI readiness, right? And in doing so, to adapt to what are now unavoidable technological shifts, like they’re here to stay. And so one of the key takeaways for us is that we have a role where we can guide the organisation and your workforce through the shift to AI. And so things that AIHR have talked about is how we can encourage experimentation and training. So how do we offer really comprehensive training that boosts skills and also reassures employees that AI is meant to change, augment their work and productivity, but not necessarily replace it. It can enhance it, right? If we boost our skills, we can enhance our productivity and our work, not replace ourselves. But we need robust training and upskilling to help allay those fears so that our employees will adapt and thrive in AI enhanced roles. And so this is going to include us in hr, we need to increase our own understanding of AI and its impact on work so it can continue to support employees and our businesses. And part of that is around establishing, in part, an AI strategy. I don’t have many clients that are at this level at the moment.

You might, and I’d love to hear if you’ve got some examples of AI strategy that’s evolved in your workplaces. But although 79% of leaders agree that AI adoption is critical to remain competitive, 60% of those leaders admit that their organisation lacks a vision and a plan to implement it. So we need to spearhead the creation of a really clear AI strategy and collaborate with leadership to align it with where our organisations are heading. Right. Like what is the contribution going to be to our goals? So we’re going to need to be really transparent in our communication around the role of AI, its potential and its impact on jobs. And for us at work in hr, this is going to be a really critical element around our job design. Job design is going to need to level up at a level that we haven’t seen for a really long time. Because in reality, with the adoption of AI, every single job description you have in your business should be changing, at least in some part. Right? And so we need to create some governance systems. We need to put some guardrails around it so that we can be really safe in adapting it, and ensure that employees kind of understand where we’re going with AI and not see it as a threat, but more so something that can help them with their growth. But responsible AI is going to require us to have some really good playbooks, right? For us to define accessibility, to set some boundaries and to provide some guidance really on how we can make and monitor AI driven decisions. I mean, we’ve got leaders that don’t want to delegate decisions to real humans, right?

So how comfortable are we giving it to a machine? And in reality, if you’re listening to this and thinking probably more comfortably than the humans in our organisation, maybe lean into that because it’s probably telling you something else about how you view your workforce. But really, at the end of the day, we want to help employees view AI as an asset rather than a strength in terms of AI in hr. One of the things that I’ve been looking at, and I’ve been looking at the AI HR report to see if it gives me some insight into this, is whether AI in HR is being hyped up or underestimated. But I really do feel like and agree with AI. HRs report where they talk about HR missing key opportunities really to improve our efficiency and our effectiveness through AI. Like we are traditionally rooted in compliance and we’re a bit risk adverse. We’re always trying to protect our organisations from biassed decision making, right? Legal risk, data breaches. And this has slowed the adoption of new technologies. We’ve been a bit slow in the uptake, right? So AI adoption’s had a real lag and HR professionals, and especially those in my community, haven’t really integrated AI into their workflows. So while 34% of marketing departments regularly use Gen AI, only 12% of HR departments have adopted it. So that’s just a third of HR leaders who are exploring potential gen AI use. And that’s a bit of a worry. It’s also about unblocking AI. So AIs got the potential to transform key functions, right, from recruitment to talent management beyond. But low AI adoption in HR is concerning given HR’s role in leading the organisational change. So we kind of need to address AI adoption blockers like our, lack of digital skills, our uncertainty about which tools are suitable because it’s a minefield out there, right? And generally we have a lack of clarity on AI’s potential and understanding the benefits are absolutely critical. And so when we look at the state of AI in HR, 76% of HR professionals fear falling behind in their organisation if it doesn’t adopt AI tech in the next 12 to 18 months. So Gartner says that 76% of HR professionals fear falling behind if their organisation does not adopt AI tech in the next 12 to 18 months. But at the same time, AI HR’s research shows us that 41% of HR professionals have the competencies to keep up with the HR digital transformation. So if 76% of us are worried that we’re going to fall behind, but only 41% of us have the competencies to keep up, we’ve probably got some challenges there, right? Another key takeaway is around how do we lead AI practises? Like how do we lead by example in this? Like how can HR adopt an AI growth mindset? And really it’s about developing competence and confidence, right? With my coaching clients I’m always talking about clarity, capability and confidence. And I feel like it’s the same with adopting and expanding our AI skills mindset. It’s about hands on learning and practical experience. So I would encourage people to really start practically integrating GenAI into your work every day. Develop a mindset around experimentation and use AI to help you solve problems and make some decisions, but then make sure you or another human expert is in the loop. The other thing we can look at in terms of leading AI practises by example is around developing a risk framework. So it’s important to recognise that avoiding AI is a risk. So if we’re in the business of risk management here in HR, we need to, as HR teams, leverage our risk management expertise to establish strong AI governance. Like, we need to use a risk framework for AI adoption in HR that can give us a clear roadmap for safe and effective use. That can help identify key areas where AI can enhance our operations and prioritise ethical consideration and really help us to work cross functionally with teams of experts. Right. So experts in AI, experts in hr, experts in legal, for example. So together cross functionally, we can evaluate tools and establish best practise. A best practise is an elusive beast. Right. And I always caution just blindly following best practise because there’s no such thing. You’ll need to look at best fit. Your organisation will be unique, the culture may be a barrier, your technological foundations might be different. So you’ve got to look at best fit, but you still need that cross functional expertise, right, where you’re bringing your tech AI experts into the room, your HR legal experts, and then make sure you putting that in parallel with what the operational needs are. no point coming up with best practise when your managers don’t want to use it. So to support that, the other thing we can do is then monitor AI performance. So if we want to understand the effectiveness of AI technologies in enhancing productivity and decision making, it’s kind of critical to analyse performance and outcomes to ensure the tech’s going to meet productivity and quality benchmarks. So we’re going to need some regular assessments and adjustments to optimise AI applications so that we can kind of use them in a wider array of tasks and make sure that we’ve still got alignment. So we need to monitor. Right. But I do feel like we are at a tipping point for the skills mismatch here. So employers believe that 44% of workers skills will be disrupted by 2030 and that 6 in 10 workers will require additional training before 2027. So we have a massive skills gap that’s becoming a pretty big imperative for HR. Right. And 70% of company leaders see that skills gap in their organisations negatively impacting business performance. So if we think that nearly half of our workers skills will evolve in the next five to six years and that 60% of our workers will absolutely require additional training before 2027.

Our capability mandate is going to explode and it’s becoming a tipping point. Right? So there’s going to be new standards for this. The skills needed in workplaces are rapidly shifting as this new tech emerges and organisations are struggling to really clearly identify and anticipate the skills that are needed in the medium and the long term. So where that leaves us is pretty vulnerable, like vulnerable of decreased productivity and innovation and not being competitive because the market is evolving all the time. M and so that’s going to create a really widening gap. So AI is reshaping labour markets and 60% of jobs are becoming automated or augmented. So they’re changing in some way. Right? So we need to bridge that massive skills gap in our organisations and we’re going to need to fundamentally rethink our approach to workforce management. Because if we don’t have strategies in place before the end of 2025, so at the time that this episode drops, that’s a year from today. If over the next 12 months we don’t have really good strategies in place for addressing the widening gap, then we’re going to have massive operational disruption because the skill mismatch is going to be too great for us to recover from. So prioritising training investments where we’re going to get the biggest yield, the biggest return on investment, that’s going to be where we’re going to see the most rapid change. So another key takeaway for us is that we really need to pivot off the back of that to a really genuine skills based approach. And what I mean by that is I kind of feel like we go through the motions in the capability space and we have some processes that we’ve constructed around our performance management and our learning and development and how we figure out what the gap is, how we figure out what people need and how we give it to them. In some organisations it feels a bit, I, don’t even know how to describe it. Just not disingenuous, but not hitting the mark. Right? So we need to identify core skill gaps, we need to collaborate with the business, we need to define and forecast skill requirements based on your industry and the technological advancements. So coming off the back of that, we’re going to need to create a really detailed skills matrix taxonomy, something to identify both the current and the future skills requirements that will drive success in each role in our organisation. And that skills matrix will serve as a foundation, right, for our, talent Management. But it also is really critical to help HR align workforce capability with those evolving business needs. This to me is strategic workforce planning 101 and it’s not about manpower or resource planning. This is where we deep dive. It’s not just the number of people that we have in certain occupational groups, it’s the skills that those areas of our workforce need. And so we’re going to need to acquire, develop and deploy the right skills for us to be able to move forward. And what I mean by that is we need to establish development opportunities and hiring practises, our talent acquisition recruitment functions that address the skills gaps.

So this is what I mean by saying we need to prioritise training investments where they’re going to get us the biggest bang for buck. And we’re going to need to align our talent acquisition and development and performance management with that skills based approach. So if we’re not allocating and redeploying employees to different roles or projects as needed, we’re not going to be helping our employees to explore new career paths and that’s not going to help them expand what their skill sets are and the gap’s going to continue to widen. So we really do need to integrate our technology solutions and implement talent marketplaces really like the conventional approach to this is the job, it sits in this team. Here’s the position description. Stay in your lane. Those days are over. Like those days are over. we’re going to need to have a fluidity around the fact that we’re going to need strategies to help us close the gap with technology by moving some people around. You may have people that have mad skills sitting over here on the left, but they’re not required to use those skills in the job that they have. But how cool would it be if we knew what those mad skills were so that we could redeploy them or deploy them to projects on the right where they’re going to be able to add significant value. So AI and automation can help standardise skill matrices in some areas. But it also infers that skills from job roles and training might help maintain an up to date skills inventory of sorts and also help us to identify emerging gaps in training needs. But having a talent marketplace that can offer an immediate solution to address skills gaps by enabling kind of more flexible work and skills based internal mobility. It’s going to be key. Like it’s going to be key. And so one of the things that I talk about, and even in a HR context, people talk to me about qualifications all the time. And I’m a bit of an anti qualification person but I’m also not naive in the fact that all of our talent acquisition algorithms and automation so far screens people if they don’t have a piece of paper. we need to look at that because the reality is competence versus credentials.

There is a four fold increase in job adverts at the minute without degree requirements. But you know what, only 1 in 700 hires is actually a skill based hire based on competence over the credentials. So we’ve taken the degrees off the ads, being all innovative, taken the degrees off the ads, but when we come to who we choose to put in the job, we’re still mostly putting the people in the job that have the piece of paper. So the reality for our talent marketplace is that we need to look at that and what executives are telling us is that, despite 40% of execs believing AI will drive growth, only 26% of organisations use talent marketplaces. So we’re not innovative around how we’re going to embrace the gig economy and the skills that people have through their side hustles. And instead we’re staying threatened by those instead of embracing them as something that can really help us in our skills gaps and addressing and narrowing that gap in our organisations. Because the reality is there’s a blue collar and a new collar. That’s AIHR’s term, not mine. New collar, jobs bloom. So you have younger workers, right, who are prioritising job stability, fair pay and upskilling opportunities over new tech disrupted jobs. So Gen Z for example, they are increasingly favouring stable sectors. And this research is really interesting to me that we have a growth in Gen Z going into sectors like government or healthcare where there’s more security and purpose and less likely to experience layoffs. So there’s some uncertainty out there that’s really shifting even in our young workforce where some security is being sought out because of where we are in the economy, right, and cost of living. The blue collar is back baby as well. Blue collar is back. Not that it ever went away, but the blue collar job market is once again it’s booming.

We’ve got massive opportunities, higher pay and we’ve got an increased interest from younger generations choosing to go into blue collar because of the economic stability and some of the earnings, capability and opportunity that’s in there. So while the tech sector is cutting jobs, manufacturing jobs have gone up like 46% or something. And so what we’re seeing is despite the tech boom and the AI and the Automation, there’s still a really high demand for skilled physical labour. in manufacturing, sanitation, construction, especially in Australia, the construction industry is absolutely booming. But then you have this new caller. So this is what AIHR are calling jobs that require, really advanced skills in high tech areas like AI and cybersecurity, but not necessarily advanced degrees. So these jobs provide really significant opportunities for skilled workers who have the necessary soft skills or mindset to learn new skills through practical experience or occupational training. So we’re looking at really tech savvy, cyber AI interested peeps who are going to be fast tracked and learning on the job. Because by the time you get through a lengthy degree when you’re in the tech sector, half of what you’ve learned will have been superseded. So by the time you get to market after doing that degree, things would have moved on. Right. And so what’s starting to emerge is this new collar where it’s, basically acknowledging that we want really high tech skills, advanced skills in AI and cyber, for example, and we’re going to train people on the job to be able to do it. But one of the things we need to look at with all of this, right, is having a level playing field for all of the different types of workers that we have. And so a few things to think about with that is we really do need to rethink our job definitions. And the requirements, like a strategic workforce plan accommodates that, right, by shifting the focus away from just the numbers of bums on seats to skills based hiring. So it’s the skills people have, not the qualifications. And that’s going to mean us adapting job descriptions for skills rather than traditional qualifications. So we’re going to need to rethink how work is defined and what the job requirements are. So skills based hiring practices tap into a much broader talent pool which focuses on those practical skills over the degrees, right, which creates opportunities for those that have been overlooked by traditional hiring. We have a lot of people that are struggling to get back into the workforce or who have been laid off and they’re trying to move into different roles. And we know that ageism is playing into this as well, where if we’re looking at skills based hiring practises that maturity and extensive experience, if people have shown capacity to transfer into different areas and to be agile in terms of learning new things, we are missing out on a whole bunch of really phenomenal people. So we need to be able to look at that and to do that we’re going to need to fix some of Our fundamentals really so aihr talk about a need to redefine the employee value proposition, EVP to reflect the changing priorities. So EVP is much more than just this employer brand brought to life advertising campaign. Right. EVP done properly is where we see an alignment between what’s written on the label to what’s in the jar. When people start the culture, you know that you can’t say you’re a really tech savvy organisation, then you come in, you’ve got computers from 10 years ago that can’t even do anything, it does what we advertise match what people’s experience is when they come in. And so with blue and new collar roles for example, and those being absolutely vital to infrastructure and any customer facing operations, really compensation doesn’t always reflect their value. We know that if you’re ever having a conversation with a police, a teacher, or a nurse, when we look at customers facing critical operations, compensation doesn’t always reflect that value.

So we are going to need to reevaluate and fix some fundamentals around how we measure job value, job worth and fair wages, overtime pay, our benefits, improved work conditions, all of that, which will level the playing field and foster more long term retention. Because at the end of the day it’s all about improving the employee experience. If we don’t implement accessible tools for training, performance management and career development, those are the things that would be boosting engagement, productivity and the skills growth. Like the key, right? The key elements for talent attraction and retention. Especially if we’ve got deskless workers who lack access to resources and feel completely disconnected from all of these advancement opportunities I’m talking about, I have clients who have field operative workers who never come into an office and barely turn on a computer. Some don’t even have email addresses. So as we strive for this really technologically savvy, disruptive world in 2025, we need to keep that in mind because at the end of the day there is a shift towards trades at the moment. So due to increasing college costs and student loan debt, hecs debt in Australia we expect to see more and more youth who are choosing trades to give them a really stable good earnings and the side hustle, the things that are going to light them up. And often that workforce that I just talked about is overlooked and under-resourced and that’s our deskless workers who make up 80% of the global workforce. Yet do you know how much they receive of our software spending like our computer budgets? 1%. There’s a lack of training and limited growth opportunities because we’re like, well, don’t have a computer. Why bring them into the conversation? So as I close out this chat and this reflection on the AI HR HR Trends report for 2025, I think we need to reflect on the incredible shift that we are witnessing where technology and AI are, no longer on the horizon, right? They’re here. They’re reshaping every aspect of how businesses operate and the pace of that change, it’s only accelerating, it’s getting faster and it’s challenging us in HR to step up and lead the way. So this isn’t just about adopting new tools, it’s about reimagining roles, redefining skills and rethinking processes to keep pace with the transformation.

HR has a unique opportunity to foster a culture of innovation and agility and resilience and enabling organisations and people to thrive in a really, really cool, dynamic landscape. So what if we reimagine HR to embrace these technological possibilities to spark growth and create impact? Imagine that before you go. This episode’s the first of a three part series unpacking AIHR’s HR Trends for 2025 report. So tune in to our next episode where I explore the shifting talent dynamics and the roads that led us here. See you soon, game changers. Thanks for tuning in and leaning in to this week’s episode. As we look to reimagine how we show up for our people, organisations and community, reach out to us via our website at reimaginehr.com.au with your HR horror stories or suggestions of people you’d love to hear from or topics you want to explore. It’s all about people, purpose and impact and we are here for all of it.

Until next time, take care, team.