As we approach 2025, the workplace continues to rapidly change. This shift is due to many factors, including advances in technology, changing employee expectations, and added compliance challenges. For small businesses, keeping up with these changes is about staying competitive, retaining employees, and creating a thriving workplace.
At Paper Trails, we understand your concerns. Managing payroll, HR, and compliance is a constant battle, especially when HR resources are tight. We’re here to guide you through these challenges, helping to understand emerging trends and providing solutions. In this article, we will take a look at the 2025 HR trends and offer some advice that small businesses like yours can take to prepare for a successful 2025. By the end of this article, you’ll understand the five biggest HR trends shaping the workplace in 2025 and learn three simple, actionable ways to apply these insights to your business. Let’s begin!
Top HR trends coming in 2025
According to experts, HR in 2025 will revolve around innovation, flexibility, and employee well-being. Let’s explore five trends that every small business should know about:
Trend 1: Remote work
Remote and hybrid work are no longer temporary fixes—they’re the new standard. 2024 surveys showed that 82% of executives planned to offer remote work options at least part-time. This is expected to continue in 2025. For small businesses, remote work means access to more potential candidates and reduced operational costs.
However, remote work does come with some challenges, especially from a compliance standpoint. Small businesses that operate in one state and have employees working remotely in a different state have to be aware of the labor laws in the state in which employees work. Further, remote work requires certain strategies to maintain employee morale, productivity, and culture. We suggest having a specific remote work policy in your employee handbook that covers items like performance and productivity expectations, working and availability hours, security and equipment, and more.
Trend 2: Skills-based hiring
In 2025, employers will be moving away from traditional hiring practices. Traditional practices looked for certain degrees and previous job titles. These practices will be moving towards a skills-based approach. Employers are focusing on applicants abilities, their potential, and their adaptability.
This trend allows small businesses to find talented individuals who might have been overlooked by traditional hiring methods. It also allows employees to gain opportunities to showcase their skills, regardless of their educational background.
Trend 3: Pay equity and transparency
Many states have passed pay transparency laws, and more are expected to follow. Even some cities have specific requirements that employers must disclose salary ranges in job postings. These laws aim to close pay gaps for cartain protected classes and strengthen the trust between employers and employees.
For small businesses, compliance with these laws is crucial. Compliance will prevent legal issues and help build a reputation as a fair and equitable employer. Conducting regular pay audits and benchmarking salaries against industry standards are essential steps in this process.
Trend 4: Technology and AI
From recruitment to training, technology has become a key piece in all HR processes. There are AI tools that can create job descriptions, screen resumes, and even assist with employee onboarding and required training. Virtual reality (VR) and augmented reality (AR) have become effective tools for immersive employee training. According to the World Economic Forum, VR/AR can improve learning outcomes by 75% compared to traditional methods. While these technologies offer efficiency and cost savings, they also require careful implementation to avoid issues.
While AI can definitely help and streamline certain HR processes, small businesses should focus on tools that deliver measurable results. And as with all AI assistance, always be sure to double-check the work of AI before implementing or publishing anything.
Trend 5: Employee well-being
Employee well-being has been at the forefront of HR for the last few years, and that focus isn’t going away. Employee mental health support, flexible work arrangements, and holistic benefits are top priorities for employees in 2025. Knowing why employees are staying or leaving their jobs is key to learning what drives employees. For small businesses, addressing well-being doesn’t have to mean expensive programs. Even small changes such as employee assistance programs, employee trainings, or access to affordable mental health resources can make a big impact on employee satisfaction and retention.
How to apply these 2025 HR trends
Understanding trends is one thing—but it is important to put that information to use. Here are three practical steps small businesses can take to prepare for the 2025 HR trends and set their teams up for success.
Step 1: Create a remote-work strategy
If it is not currently part of your business, ask yourself if it would make sense in your business. Not all businesses are setup to accommodate work from home, but many employees look for potential work from home opportunities when exploring new jobs. If remote or hybrid work is applicable to your business, develop a clear strategy to make it successful. Start by setting clear expectations for communication, productivity, and work hours. Use the right tools, like project management software or virtual meeting platforms, to keep your team connected.
Don’t forget about your company culture. Finding ways to work on team bonding even when employees aren’t in the same physical space. Virtual team-building activities, regular check-ins, and celebrating achievements can help maintain a sense of connection for those employees not working in the office.
Step 2: Embrace skills-based hiring
Rethink how you approach your hiring practices. Instead of using your traditional hiring methods, think about focusing on the specific skills a role requires. This may open you up to candidates with nontraditional backgrounds. You should also adjust your job postings to emphasize the skills and experience you are looking for rather than just educational degrees.
Using your current team is just as important when looking to improve employee morale and retention. Identify areas where employees can grow and provide access to training programs, workshops, or online courses. This is known as upskilling your employees. By building your employees’ skills, you can boost morale and prepare your business for future challenges.
Step 3: Prioritize employee wellness
To prioritize employee wellness, work on creating a workplace that actively supports employees. This can be their mental, physical, and emotional health. Begin with small, meaningful changes such as flexible scheduling to reduce burnout, offering access to mental health resources like Employee Assistance Programs (EAPs), or even organizing team activities.
You should train managers to recognize signs of stress or burnout and promote open communication so employees feel comfortable discussing challenges. It is important to understand your employees’ wellness needs and adapt your benefits accordingly. Remember, prioritizing wellness is an investment in your team’s productivity, engagement, and retention.
Conclusion
The workplace in 2025 will be shaped by trends like remote work, skills-based hiring, pay transparency, and advancements in technology. While these changes can feel overwhelming, they also offer opportunities for small businesses to thrive. At Paper Trails, we’re passionate about helping small businesses navigate these trends and build workplaces where employees and businesses succeed together. If you’re ready to tackle payroll, HR, or compliance challenges with confidence, we’re here to help.
Contact us today to learn how we can support your business. Together, we’ll make managing your workforce simpler, smarter, and stress-free.