HR Priorities Shift in 2025: Leadership Development and Retention Take Center Stage 

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As HR leaders seek to prepare their teams and organizations for a future defined by rapid technological advancements, shifting organizational priorities, and an uncertain economic landscape, they are increasingly challenged to identify the most critical areas of focus that will support long-term organizational success. To provide HR leaders with guidance as they navigate the future of work, McLean & Company’s recently published HR Trends Report 2025 offers data-backed insights into the top five priorities for HR in 2025. The new report emphasizes that recruitment has been displaced as HR’s top priority for the first time in five years, replaced by developing leaders and reflecting a growing emphasis on internal talent cultivation and cost-effective workforce strategies 

The annual report draws on insights from 779 HR and business professionals across diverse industries and regions, including North America (84%), Europe (6%), Asia (4%), Oceania (2%), Latin America (2%), Africa (2%), and Middle East (1%). Respondents’ industries included manufacturing, finance and insurance, healthcare and social assistance, educational services, public administration, retail trade, construction, transportation and warehousing, professional, scientific, and technical services, and more. The wide scope of feedback highlights the critical role HR plays in preparing organizations for the unpredictable future. 

“It is time to push the boundaries of HR’s comfort zone. HR leaders have a unique opportunity to redefine their impact in 2025 by prioritizing leadership development and retention,” says Will Howard, practice lead, HR Research & Advisory Services at McLean & Company. “These areas not only address immediate organizational needs but also lay the foundation for long-term growth by ensuring a strong internal talent pipeline.” 

In the report, McLean & Company outlines the top five priorities for HR in 2025, as detailed below: 

1. Developing Leaders. Leadership development ranks as HR’s foremost priority in 2025. HR’s effectiveness at developing leaders has an immense impact on financial outcomes like optimizing costs and growing revenues. The case for increasing investments in HR’s ability to develop leaders is clear, with research revealing that organizations excelling in this area are 1.9 times more likely to be high performing at achieving strategic goals and objectives and 1.7 times more likely to be high performing at revenue growth.
2. Retaining Employees. Employee retention is a new addition to the firm’s reporting and ranked exceptionally high on the list of critical HR priorities as organizations shift focus from external recruitment to strengthening internal talent pools, helping to mitigate high turnover costs. The report’s findings point to strategic listening as integral to delivering on HR’s second and fourth priorities in 2025 – retention and the employee experience. Despite the important role employee listening plays in retention, few organizations are listening to the employee voice strategically. McLean & Company’s new report spotlights that only 23% of organizations have a formal employee listening strategy, emphasizing the need for HR organizations to take steps to improve in this area.
3. Controlling Labor Costs. Labor cost management remains a key priority amid continued economic pressures, prompting HR to adopt strategic workforce planning and cost-optimization measures. As explained in the firm’s report, being strategic about total rewards is key to controlling labor costs. When HR has a formal total rewards strategy, they are 1.9 times more likely to be highly effective at controlling labor costs and maximizing the value of labor spend compared to those with no total rewards strategy. Labor costs are often the organization’s biggest expense, making a total rewards strategy essential to ensuring investments are directed in a controlled and impactful way.
4. Enhancing Employee Experience. Providing a positive employee experience remains critical in maintaining engagement and productivity. McLean & Company’s trends report notes that when used in HR, AI enhances key employee experience outcomes, including talent acquisition, the candidate experience, talent management, and learning & development. Though AI adoption within HR is increasing, there is still much progress to be made, with only 42% of HR respondents indicating they have implemented AI in HR. This is an indicator that HR must continue to work to elevate its data and technology skills, which will significantly impact the employee experience.
5. Recruitment. For the first time in five years, recruitment is no longer the top priority for HR in 2025. This drop in priority suggests that organizations may be shifting priorities to emphasize important areas like leadership development, where effectiveness has stalled over the past several years. However, recruitment continues to play a vital role in addressing talent gaps and building organizational capacity. The firm’s research findings explain that pay transparency is improving recruiting effectiveness, with organizations that have or are working on improving pay transparency being 18% more likely to report they are highly effective at recruiting compared to those who have not increased pay transparency.