The 4 hot topics for HR in 2025

2025 promises to be the year in which several transformative HR trends will reshape both Australia’s workforce and workplaces. We explore four that your organisation needs to know about.

1. AI-driven HR

AI is revolutionising the way many sectors work, but – to date – HR has been slower to adopt these advancements than functions such as marketing or finance.

While 34% of marketing departments use generative AI regularly, according to one study, only 12% of HR departments have followed suit. However, AI’s ability to enhance HR efficiency and decision-making makes it a potential game changer for the future of human resources.

For instance, AI can streamline hiring by automating job ad creation, candidate screening and cultural fit analysis. Meanwhile, tools such as Employment Hero’s ‘Swag’ can already predict hiring needs and match candidates to roles.

AI also has the potential to transform performance management by aggregating information from multiple sources, and analysing it to deliver data-driven reviews.

Some organisations are already using chatbots (e.g. Telstra’s ‘Darcy’) to provide instant HR support, while people analytics tools identify trends such as attrition risks and help drive targeted training programs. These applications take care of a lot of the routine HR, freeing up HR professionals to focus on where they can really add value.

At the same time, AI adoption in HR isn’t without risks. Algorithms can be biased (as Amazon found out) and safeguards need to be included. So, reliable data and transparent practices are essential.

Still, for all the potential pitfalls, McKinsey estimates that generative AI could reduce administrative work in HR by up to 70%. And 2025 will be the year a lot more companies begin their AI journey.

At Catalina we are taking a deep dive into the ways we can transform our processes using AI so that we can provide our clients with greater efficiency and better data.

2. Tapping into the skills of an older workforce

For many Australians, the concept of retiring at 65 is rapidly becoming outdated. With people living longer, staying healthier, and remaining productive well into later life, older workers represent an increasingly valuable (and significant) segment of the workforce.

In fact, the proportion of Australians aged 55 and older in the workforce more than doubled in the 20 years from 1991 to 2021, from 9% 19%. This was driven in part by more women re-entering the workforce after having children, as well as people delaying retirement.

The signs are that this trend will accelerate over the next decade. After all, by 2030, Australia will have more people aged over 65 than under 18, according to McCrindle.

To tap into this resource effectively, businesses will increasingly need to adopt age-inclusive strategies.

For instance, CEPAR (a cross-university thinktank) highlights the need for organisations to adopt approaches such as the 3i Framework: Include workers across all career stages, Individualise responses to their unique needs, and Integrate mature-age employees into organisational structures.

To do this, it recommends developing workplace policies such as flexible work arrangements, health programs and lifelong learning opportunities.

Again, at Catalina we are looking for ways in which our clients can remove age-related barriers so that our clients can take advantage of this growing demographic.

3. Integrating HR and recruitment

As we move into 2025, the lines between HR and recruitment are blurring. Traditional recruitment models are giving way to integrated approaches, where HR and recruitment work hand in hand to drive long-term success. Catalina Consultants’ Talent Advisory service exemplifies this shift, helping businesses make more strategic employment decisions.

Catalina launched its Talent Advisory service in response to client struggles with filling roles efficiently. By bridging HR and recruitment, we’ve created a process where recruitment supports broader business strategies and better aligns to the HR function. We collaborate with clients to analyse goals, identify talent needs, and develop plans to ensure the right people, with the right skills are in place when needed and ensuring seamless transitions into the workplace for the candidates who are successful.

This integration offers a strategic, cost-effective alternative to traditional recruitment. Instead, recruiters are brought in where their expertise adds maximum value, while HR manages cultural fit and onboarding, ensuring talent acquisition aligns with retention efforts.

4. DEI 2.0

In today’s social and political climate, Diversity, Equity, and Inclusion (DEI) efforts are under more scrutiny than ever. While DEI initiatives have expanded rapidly across workplaces, many HR leaders are facing frustration and pushback from employees.

Data from a 2022 US-based Gartner report highlights these challenges:

• 31.4% of employees report DEI has received more attention within their organisations in the last two years.
• 44% agree a growing number of their colleagues feel alienated by their organisation’s DEI efforts.
• 42% say their peers resent DEI initiatives.

These statistics reveal that, while DEI programs are essential, they also need to evolve.

In 2025, we’ll increasingly see companies take a “whole person” approach that moves beyond demographic box-checking. This will involve properly recognising employees’ multifaceted identities—an employee from a minority background might also identify as LGBTQ and be a caregiver, while a white male employee could have a disability and face visa issues. Instead of labels, empathy and belonging must take centre stage.

Organisations embracing this shift will focus on tailored support for employees, addressing their unique challenges and needs. By investing in these programs, businesses can say to employees, “We see you, we support you, and you belong here.” In doing so, they’ll help create inclusive cultures that thrive in 2025 and beyond.

And in a period where the new psychosocial laws are likely to be tested through the court system, it will be more important than ever that businesses recognise the responsibility they have to provide a safe and inclusive workplace for their people.

Want more?

These are four key trends we believe will shape Australia’s workplaces over the next year and beyond.

If you’d like to know what your company can do to respond to – and capitalise on – them, get in touch.