The top 4 HR priorities for 2025

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September 19, 2024

What concerns should you anticipate and prepare to address in 2025?

All signs are pointing to a “back to the basics” resetting of sorts when it comes to compensation practices. Companies are not paying premiums to new hires, nor are they increasing base pay with market adjustments to retain people. Merit increase budgets are also getting closer and closer to pre-pandemic levels each year.

So, what can you do to prepare for 2025? Let’s take a look at four top priorities.

Prioritize these 4 HR concerns for 2025

1. Modernize your merit process

Too often, the next year’s proposed merit budget is simply an adjustment from the prior year, with some influence from market data like Mercer’s Compensation Planning survey. But, is that the best way? There is not enough consideration given to how competitively you are currently paying and which jobs might need pay adjustments such as equity or market. Additionally, managers are often in the dark about how to explain the budget and allocations, putting them in a sticky spot with employees. For 2025, why not take a fresh approach to the merit process?

Set budgets: Use data to determine the true budget, rather than just following last year’s numbers.
Allocate wisely: Assign additional budget to areas in need rather than assigning the same percentages for all departments.
Close gaps: Address pay equity gaps while targeting desired market positioning and compa-ratio.
Empower managers: Avoid relying on managers who don’t have enough information or the skills to explain the budget and allocations.
Comply inherently: Capture necessary FLSA, cost of living, and minimum wage adjustments.

2. Understand your legal landscape

Focus on compliance and mitigating legal risks in your compensation practices by keeping your leadership team and HR team updated on evolving employment laws and regulations, including FLSA and pay transparency. To do that, you will need to find a source of information that you can rely on for accurate, timely reporting. Finding a resource that’s efficient for you to leverage is even better.

3. Actively address pay equity

With heightened pay transparency requirements, your organization should have a sense of urgency to proactively analyze and address any gender or minority pay gaps, fostering a fair and inclusive work environment. The first step is understanding where you are and what opportunities there are for improvement. A mitigation plan as well as communication to all stakeholders are equally important. Don’t be afraid to engage experts in employment law and communication — better to be careful than to risk impacting employee engagement and trust.

4. Tell your story, transparently

The journey to pay transparency requires strategic planning and a thoughtful approach in order to manage expectations, enhance the company’s culture, and support the compensation philosophy. Again, engage a law and communication expert to partner with you as you assess your situation, define your story, solidify foundations, implement the strategy, share your story, and measure the impact.