HR leaders in the UK have had their work cut out for them in 2025. Persistent macroeconomic troubles, geopolitical uncertainty, burdensome domestic legislation and the ascent of AI have created difficulties for HR teams across all of their primary responsibilities, from recruitment to workplace management.
Here, we look at seven quotes that reflect the challenges senior HR leaders have faced in the first half of the year.
“It’s easy to make a statement about diversity and inclusion. The real work, however, is to hold yourself accountable for making progress.”
For many people chiefs, the demise of DEI has been the greatest workplace tragedy of the past year. Facing political and professional backlash, primarily in the US, organisations including BT, Google, Meta, Deloitte, Goldman Sachs and the UK’s Financial Conduct Authority have diluted their diversity initiatives or scrapped them entirely.
But some business leaders, including Josh Harris, the CEO of Neverland, a creative agency, warn that by deprioritising DEI, firms are not only helping to perpetuate social and workplace inequalities, they are also ignoring potential solutions to their own problems, such as skills shortages.
To reverse the trend, Harris says, organisations must collaborate, lead by example and hold themselves accountable for progress towards diversity goals. “Leaders must be directly involved in diversity and inclusion efforts. Set the tone from the top, mentor diverse talent and ensure that inclusivity is embedded in every aspect of the business,” he says.
“Almost every organisation says they can’t find the skills they need. But too many are focused on hiring oven-ready employees – and they don’t exist.”
Finding skilled employees has long been a headache for UK hiring teams – and the problem has become more acute in 2025. New employment legislation has increased the cost of hiring, the upheaval of the international trade system is creating existential uncertainties for businesses and the AI boom is reshaping the skills requirements for many employers.
According to Peter Cheese, the CEO of the Chartered Institute of Personnel and Development, employers must change their tactics if they wish to plug their skills gaps. A new hiring task force, announced in May, could inject some life into the UK’s recruitment market. But rather than seeking out “oven-ready” employees (which, Cheese notes, don’t really exist), firms should instead focus their efforts on training and upskilling.
“We want to understand our employees’ needs and ambitions and that’s the same for every single person, regardless of whether they’re a year away from retirement or a school-leaver.”
There are at least four generations of employees in today’s workplaces and each has different needs, preferences and goals. Harmonising these groups, therefore, will be key to developing a robust company culture and strong employee engagement.
Vishal Thanki, director of talent and culture at B&Q, says that doing so means stamping out ageist attitudes, making training opportunities accessible for all staff and ensuring appropriate workplace flexibility to enable all employees to perform at their full potential. “An employee’s age doesn’t matter. We’re a business that welcomes everybody,” Thanki says.
“There is often a built-in assumption that employees who work from home will somehow take advantage or skive. However, there is almost no evidence that this is true.”
Hybrid working is a matter of constant debate. Research from Raconteur and Attest found that 58% of remote workers have completed household chores while they should have been working, 30% have enjoyed a quick kip and 15% have indulged in some afternoon delight with a partner.
However, more than 80% spend an hour or less on non-work activities in a typical remote-working day. And, according to Gemma Dale, a senior lecturer at Liverpool John Moores University, many people actually work longer hours away from the office. “I don’t see this as a productivity issue,” she says. “I see it as people managing their life around their work.”
Many firms attempting to mandate a return to the office have faced considerable backlash and the Raconteur research found that nearly half (46%) of employees would immediately seek new employment if their employer were to enforce a full office return. With employers struggling to find critical skills, business leaders would do well to reconsider their commitment to inflexibility.
“There is a real risk that this legislation imposes a thicket of regulation across all businesses which prevents them from creating the high-quality, secure jobs which we all want to achieve.”
That was the reaction of Rain Newton-Smith, CEO of the Confederation of British Industry, to the Labour government’s flagship employment rights bill, which aims to improve workplace security and productivity. Included in the document are provisions for statutory sick pay, day-one rights for parental leave, an increase to the minimum wage and limitations on zero-hours contracts.
Two weeks after the publication of the bill in October 2024, Rachel Reeves, the UK chancellor, announced in the autumn budget that employers’ National Insurance contributions would increase from 13.8% to 15% from April 2025.
The bill is expected to pass this year. And, although many of the reforms will not take effect until at least 2026, businesses, especially small and medium-sized firms, are already feeling the impact. Hiring intentions in the UK are at a record low, excepting the pandemic years and experts worry that the size and complexity of the legislation will overwhelm companies already struggling to survive in the current operating environment.
“Businesses could face a challenging spike in HR turnover at a time when they want their teams performing at their best.”
Employee wellbeing became a hot topic during the pandemic, with workers secluded from their colleagues and many lacking sufficient support networks. HR professionals at the time were charged with managing the welfare of employees. But, in the process, it seems that the welfare of HR may have been overlooked.
Over half (52%) of HR professionals have experienced burnout since the pandemic, according to research by Personio, an HR solutions provider. Lenke Taylor, its chief people officer, says businesses must increase investment in the function if it is to achieve its strategic goals of creating an engaging, rewarding and productive work environment.
“We’re at a point with AI where there are more questions than answers. We do not have the playbook for what it means to bring AI into our workforce.”
In July 2024, Sarah Franklin, the CEO of Lattice, a technology company, announced on LinkedIn that her firm had created employee records for “digital workers”. Her post was immediately met with a flood of criticism, as tech experts and business leaders decried the move, which they saw as a step towards large-scale job displacement.
Franklin, however, insists that the uproar was the result of a misunderstanding. “We want AI to be in service of people, not just in service of the business,” she says.
People are understandably worried about the impact of widespread AI adoption on human workers. Will most of us lose our jobs? Will the few remaining human employees be left handling the least fulfilling tasks? For Franklin, HR will be essential for ensuring that human workers are not left behind in the race to implement AI tools: “We don’t have to wait for regulation to be responsible stewards of technology.”
HR leaders in the UK have had their work cut out for them in 2025. Persistent macroeconomic troubles, geopolitical uncertainty, burdensome domestic legislation and the ascent of AI have created difficulties for HR teams across all of their primary responsibilities, from recruitment to workplace management.
Here, we look at seven quotes that reflect the challenges senior HR leaders have faced in the first half of the year.
“It’s easy to make a statement about diversity and inclusion. The real work, however, is to hold yourself accountable for making progress.”