5 HR Workforce Trends for Employers to Watch in 2025

As the first several weeks of 2025 have shown us, employers need to be ready to navigate sudden and unexpected changes. Not everything is unpredictable, however: below are five developing trends OneDigital’s HR Consultants are monitoring for 2025.

1. The New Hybrid Standard and “Quiet Vacationing”: A National Compromise with Some Downsides

Key Takeaway: After a years-long tug-of-war between employees and management, hybrid work has cemented its place as America’s preferred post-pandemic working model for those with office jobs.

This development is a compromise in the truest sense of the word, with many unsatisfied people on both sides who strongly believe that fully remote or fully in-person working models are superior. However, efforts to bring employees back to physical offices more frequently is often met with pushback and may have negative effects on recruitment and retention.

"Quiet Vacationing," where employees work from vacation destinations instead of taking PTO, is on the rise.

This is further complicated by the rise of "Quiet Vacationing," where hybrid or fully remote employees work from vacation destinations rather than formally taking time off. While these employees may still be getting work done, their level of productivity and focus is debatable. Employers may also find themselves inadvertently operating their business in another jurisdiction, where there may be additional licensing and registration, taxation, and other compliance issues. This phenomenon may signify cultural challenges within organizations, with recent studies showing that roughly 50% of employees are uncomfortable taking time off, and that, when they do, they feel pressure to remain available. To combat burnout, employers must foster a culture that encourages true disconnection during leave. One of the best ways to do this is for leaders at the top of the organization to practice what they preach and not expect responses when an employee has a scheduled day off.

2. The Expanding Reach of State-Level Employment Laws

Key Takeaway: Across the country, states are beginning to take the lead on employment regulations due to an absence of clear federal leadership.

This development is creating a series of patchworks are a headache for multi-state employers must navigate. For example, several state governments have passed pay transparency laws that require employers to disclose pay scales in job postings and during internal discussions which are often written to apply to companies even if they only have a small number of fully-remote workers in an affected jurisdiction.

Similarly, paid family and medical leave (PFML) and paid sick leave laws are expanding, mandating employers to provide paid leave for family and medical needs in many states on top of standard unpaid federal requirements. Employers must stay proactive to remain compliant and competitive in this evolving regulatory landscape.

3. A Generational Shuffle in the Workplace

Key Takeaway: The demographic transition is reaching a crescendo, with baby boomers increasingly hard to find in American offices.

10,000 Americans are turning 65 every day, and Baby Boomers are continuing to retire at a staggering pace. This is freeing up leadership roles and increasingly allowing Gen X and Millennial employees to move up the chain. Millennials now constitute the single largest generational cohort in the American workforce. Meanwhile, Gen Z is now flooding into American offices, occupying a position that is similar to the one Millennials held in the early 2010s.

Millennials now constitute the single largest generational cohort in the American workforce.

We know that different generations have different preferences and values, making it impossible to use a ‘one size fits all’ approach when considering how to attract, retain, and communicate with diverse generational teams. As such, organizations must make an effort to learn and understand these differences, and work to adapt their strategies to ensure they don’t fall behind.

4. AI Matures and Permeates the Workplace

Key Takeaway: Generative AI is moving beyond a novelty that employees sneakily use behind the scenes to an official, permissible tool of the modern workplace that is subject to both internal and external regulation.

Ambitious state legislatures are also working to regulate AI in the workplace and articulating legal guidelines for its use in hiring, monitoring, and productivity tracking. Many organizations are formally integrating AI into their processes, while employees increasingly adopt AI tools to streamline tasks and boost productivity. AI is now widely used in recruitment, employee engagement, performance analytics, and more.

Looking ahead, AI is expected to further evolve, supporting personalized learning paths, predictive workforce planning, and advanced decision-making. Employers should focus on ethical and transparent AI implementation that retains resources for the training, development, and re-skilling of those whose positions are impacted most.

5. Employee-Centric Benefits Design

Key Takeaway: Competitive employers are increasingly leveraging hard data about the preferences of their employee population and new benefit analytics tools to move away from one-size-fits-all benefits.

Instead, employers are turning their attention towards customized offerings that are designed to cater to the needs of their existing employee base and specific subgroups that they are hoping to attract. Insights from workforce survey data is an essential tool in this transition that allow employers to tailor offerings, enhance satisfaction and better measure ROI.

Findings from OneDigital’s Employee Value Perception Study highlight the importance of aligning benefits with life stages, seniority, and other measurable traits. For example, younger employees may prioritize career development and flexibility, while older workers value retirement planning and financial wellness. By strategically using data, employers can create benefit packages that resonate across demographics and improve retention and employee engagement.

Employers are turning their attention towards customized offerings that are designed to cater to the needs of their existing employee base and specific subgroups they are hoping to attract.

Competitive employers will need to balance evolving compliance obligations with ongoing social, demographic and technological changes in the workforce. Leverage your relationship with a trusted HR partner to adapt to changing circumstances, strategize for the future, and become an employer of choice.

For real-time updates on some of the biggest events affecting employers this year, check out OneDigital's Federal Policy Updates for Employers: What to Watch in 2025.