Talent predictions for 2025: Insights from Mercer’s Global Talent Trends HR Pulse Survey

Back at the start of 2024, 美世 unveiled four new Global Talent Trends based on insights from thousands of employees, HR professionals, C-suite leaders, and investors:?

1. Drive human-centric productivity?
2. Anchor to trust and equity?
3. Boost the corporate immune system?
4. Cultivate a digital-first culture?

We’ve checked in with over 1,800 HR leaders to see how their organizations are progressing against these trends. What they told us is a good indication of what 2025 might have in store and which issues require fresh thinking.??

Here’s what HR leaders are forecasting:???

The Talent innovation gap between leaders and laggards will widen???

Last year, there was a stark contrast between the strategies that high-growth companies (those self-reporting 10%+ top-line growth in 2024) pursued compared to their slower-growing peers (reporting 3% or less growth). Now, high-growth firms are significantly ahead in all four of Mercer’s Global Talent Trends, particularly in relation to their progress in anchoring to trust & equity and boosting the corporate immune system.??

In addition, high-growth firms are more likely to be doubling down on AI investments in 2025, ushering in starkly different work experiences for those operating in low versus high growth environments. These actions will potentially exacerbate the innovation gap between leading and lagging businesses.?HR in the Technology, Media & Communications, Financial Services and Manufacturing sectors are the most poised for growth this year. Regardless of sector, 11% of executives expect that workforce restructuring or reorganization will have the most impact on cost optimization in 2025. ?

HR is tasked with cultivating continued innovation while maintaining a healthy work culture in a climate where opportunities are high yet budgets are tight.?

Renewed focus on the role of people managers???

While AI can enhance technical capabilities, it cannot replace good leadership. In recognition of this, improving people managers’ skills tops the priority list for HR leaders for the first time since the inception of the Global Talent Trends Study, in all 16 industries and 17 geographies. ?

Executives are acutely aware of this skills gap. Insights from Mercer’s upcoming 2025 Executive Outlook Study (publishing February) suggest there is a need to rethink goal cascade, strategy execution and governance as organizations resize and reshape. With 25% of HR looking to AI coaching to boost individuals’ and managers’ capabilities in 2025 and 20% using assessment to improve succession slates for critical/senior roles, this is an area where human/machine teaming can help. AI is already spotting performance trends, nudging managers into action and suggesting more personalized developmental intervention.??

To successfully align people performance with shifting strategic goals, building a leadership mindset and skill set that drives change is mission-critical.?

Skills momentum is starting to snowball???

The transition towards skills-based talent and reward practices is continuing to gain traction. While only 17% of the HR leaders driving human-centric productivity say their business is making considerable progress or see themselves as industry-leaders, a notable 92% report that they are already on their journey to becoming a skills-powered organization. It’s no surprise that designing talent processes around skills has jumped from eighth to third position on HR’s 2025 priority list this year.?

If you’ve not already, check out Ravin Jesuthasan, CFA, FRSA and Tanuj Kapilashrami 's book on skills-powered organizations.?

AI will become a productivity differentiator, despite lackluster impact in 2024 ??

Less than a third (31%) of companies currently use Generative AI. But the organizations that are furthest ahead on driving human-centric productivity already see efficiency gains from AI (67% versus 54% of lagging firms) and 59% also report improved innovation from AI (versus 31% of laggards).??

Organizations that are further ahead are going beyond pure AI deployment and the democratization of access to AI tools. They are twice as likely to prioritize redesigning work to incorporate AI and automation and to?be very confident in the progress they’ve made in using objective data to inform their talent decisions. Redesigning work and understanding people’s motives, skills and interests are key to unlocking AI’s potential. AI will not just drive productivity gains this year, but stimulate leaps in commercial advantages as businesses scale the Proof of Concept and work with a new agentic workforce.??

Our upcoming Executive Outlook Study also shows that C-suite leaders remain firm believers in AI’s transformative potential. Augmenting our systems and processes with AI is a top three priority for the majority of executives in 2025, and 58% expect AI and process automation to help with cost optimization by eliminating manual work and/or improving workforce productivity.

I anticipate these productivity gains will come to fruition this year, as companies figure out how to redesign work alongside their people for an accelerated uplift.??

Trust and equity will continue to have an outsized impact on employee sentiment??

Of the four Global Talent Trends, HR believes their organizations are making the most progress in anchoring to trust and equity. A remarkable 59% of HR leaders reported positive strides in this area, which shows great progress given the impact trust has on indicators of employee sentiment such as employees’ sense of thriving and intent to stay.??

Employers have heeded the warning signs of declining employee trust in recent years, spurred on by regulation and sustainability reporting. High growth companies are more likely to be very confident their organization has driven positive outcomes by improving pay transparency (1.4 times more likely than low-growth firms) and closing equity gaps (1.3 times more likely). ?

Equipping managers to have effective discussions on topics such as pay, flexibility, and career moves makes all the difference – and brings us back to the importance of tackling skills gaps at managerial level.?

Sustainability efforts will focus on delivering on brand commitments ?

Broadly, employers are mostly focused on governance matters regarding sustainability including setting and publicizing their sustainability goals (52%) and keeping up with sustainability reporting and transparency (47%). Forty-five percent of HR leaders are committed to reducing pay equity gaps as part of their sustainability commitments, with 46% very confident that they have done enough to achieve positive outcomes in the last 12 months.??

This focus is paying dividends: When executives rank the People initiatives that they believe will deliver the largest ROI in 2025, improving sustainability accountability, metrics and reporting is their #2 and delivering on the World Economic Forum’s Good Work standards is at #4. ?

More can be done to communicate multi-stakeholder goals and ensure both leaders and workers have goals that align to this broader mission.?

New talent strategies will emerge as leaders navigate ambiguity and a heightened risk landscape???

With the pace of change set to intensify and nascent tech in our midst, embedding a risk mindset across the workforce is key. Of those focusing in this area, half of HR are somewhat confident their organization has built risk awareness into its DNA, while 37% are very confident, highlighting that many firms are focusing on building individual resilience.?

For example, high-growth firms are 1.6x more likely to have redesigned work for employee well-being and 1.8x more likely to align leader incentives to employee well-being outcomes. But it is fortifying enterprise resilience through embedding a cyber security mindset, tackling the talent implications of macrotrends?like longevity or extreme weather conditions, and scaling ethical AI practices that will grow in criticality in 2025.??

As part of these resilience-building efforts, the role of leaders in embedding psychological safety, risk-awareness and governance-led culture is now in focus. In fact, as HR reflects on what will differentiate good versus great leaders in 2025, nearly half (49%) say that having a risk management mindset is a critical success factor. However, Mercer research shows that just 19% of leaders are effective at managing leadership paradoxes such as balancing short-term and long-term goals, meeting business demands while maintaining high integrity standards, and driving results while caring for employees' well-being. ?

Marrying leadership development efforts with succession strategies/gig opportunities and intergenerational teaming will make a difference.???

HR will take up the digital mantle as companies build digital-first cultures??

2024 was a year of embracing AI but, by their own admission, HR often found themselves inheriting talent issues stemming from technology last year, rather than leading on change adoption. ?

This is set to change in 2025 as HR asserts its position in leading on the work experience and aligning talent priorities to transformation goals. The good news? Technology is already freeing HR up from transactional tasks. High-growth firms are 1.3x more likely to already use AI to field employee self-service and 1.2x more likely to plan to use AI to automate HR tasks in 2025 compared to lower-growth peers. The focus on bolstering HR’s tech expertise and rethinking existing processes through an employee experience lens has contributed to the reshaping of the HR role, with 75% of HR reporting their job has become more strategic since 2020.

Other than insufficient budget, the biggest challenge that organizations foresee this year in fostering a digital-first culture is a lack of capability and skills on the ground. HR can be a role model: 34% of organizations are very confident in their recent efforts to increase the digital competence of their HR function, and 45% of HR leaders report they have become more involved in digital/technology projects in recent years, including working closer with IT/Digital teams. Executives see the value: Actioning investment in HR digital advancement is high on their wishlist for 2025, making this a year to stride ahead.?

To succeed in sustainable change adoption, HR will want to level up their digital capabilities to continue to play their role in an effective digital culture.?

Is your business ready to invest with intent in 2025??

2025 will be a year of transformative and relentless change that challenges businesses to push and reset boundaries. While our upcoming Executive Outlook Study indicates that globally, many executives are bullish on growth (although this optimism is not shared across all geographies and industries), this also comes with increased scrutiny of the ROI of HR initiatives and people-related costs.??

Key to making budgets meet their ambition necessitates HR being highly intentional in where they invest their time and money. As we kick off a new year, the question for us all is...?

What will you let go of and where will you double down in focus and effort????

I’d love to hear your thoughts on the actions at the top of your agenda.?

Coming soon: 2024-25 Global Talent Trends?

To support your decision making in driving quality growth, we’re updating our Global Talent Trends report to reflect the latest insights from HR and our related advice, some of which I've started to explore in this blog. Stay tuned as the updated report will be released in the coming weeks!?

If you are keen to hear more in the meantime about our previous Global Talent Trends findings, check out this podcast episode with Gord Frost and I. Or catch me with my colleagues Jason Averbook and JESS VON BANK at their Digital Meet Up on Friday 24 Jan.