If 2025 was a workplace thriller, HR leaders didn’t just watch it; they lived it. The monsters under the bed had names: Skills Gaps, AI Backlash, Quiet Cracking, Culture Drift, and a new villain that crashed the party: DEI Whiplash.
Let’s break down what really kept HR leaders awake this year, and how they can finally get a decent night’s sleep heading into 2026.
Talent shortages aren’t going anywhere, but HR has new levers
Recruiting in 2025? Brutal. According to SHRM, 69% of organizations still can’t fill roles, ghosting is at an all-time high, and external hiring pipelines look like they’re running on fumes. More interestingly, a third of organizations are upskilling their own people because external talent isn’t there.
The new play
HR leaders who win in 2026 will:
- Build internal talent marketplaces so talent can flow instead of stagnating.
- Use apprenticeships, internships and mentorships to widen pipelines.
- Shift to skills-first hiring and rethink the obsession with degrees.
Translation: stop fishing in the same empty pond. Farm the talent you already have.
AI is a double-edged sword: HR needs tech strategy and empathy
AI became HR’s new coworker in 2025. SHRM reports AI use in HR jumped from 26% to 43% in a single year, but excitement quickly turned into tension.
Leaders use AI as if it were oxygen. Employees? More like pepper spray.
A global study found that 87% of executives use AI at work, while only 27% of employees do. That isn’t adoption. It’s a trust crisis.
And in the shadows, a new behavior quietly exploded: quiet cracking employees who look engaged but are emotionally collapsing. When AI-powered performance tools are not properly set up, people are penalized instead of supported.
The new play
HR needs a two-track AI strategy:
- Productivity tracking: automation, analytics, efficiency
- People tracking: trust, transparency, well-being, fairness
And the cherry on top would be:
- Human-in-the-loop oversight
- AI literacy training for the entire workforce
- Clear communication about how algorithms make decisions
AI can be a teammate, not a threat, but only if HR leads that shift.
Leadership development takes center stage because managers are the glue
2025 was the year HR realized not all managers were built for hybrid work, AI-infused workflows, or teams stretched across six time zones.
So leadership development, once a “nice-to-have,” skyrocketed to the #1 priority for more than half of HR leaders.
Why? Because culture, communication, clarity and care don’t happen by accident.
The new play
- Coaching and peer-to-peer programs train leaders with leaders
- Make people-development metrics matter more than task-completion metrics
- Hardwire adaptability, emotional intelligence, and resilience into leadership DNA
And while leaders were battling AI anxiety, another crisis grew louder: employee wellbeing.
Employee wellbeing is non-negotiable and more complicated than ever
Employee wellbeing officially graduated from “bonus perk” to “business-critical.” Telemedicine, mental health coverage and financial planning are all rising as a response to a pandemic of stress and burnout, especially with AI surveillance fears creeping in.
AI can boost productivity, but if it’s implemented poorly, it becomes “Big Brother with spreadsheets.”
The new play
- Build holistic wellbeing programs (mental, physical, financial)
- Use analytics responsibly to detect burnout, not punish it
- Train managers to recognize emotional load, not just workloads
- Create psychological safety so employees speak up before they crack
Burnout isn’t a KPI failure; it’s a leadership failure.
Culture is now a strategy, not a slogan
Hybrid work didn’t fade in 2025; it calcified. But along with dispersion came erosion of culture, rising silos and engagement cliffs.
SHRM research shows HR leaders are under pressure to build a culture that travels across WiFi, office walls and multiple time zones.
The new play
- Make culture portable: rituals, digital communities, and intentional onboarding
- Use people analytics to spot where engagement is dropping
- Hold managers accountable for connection, inclusion and psychological safety
In 2026, culture isn’t posters or perks. It’s a system. And just when HR thought things couldn’t get more complex, DEI entered its most volatile year yet.
DEI is under attack. HR must get smarter, not softer.
Here’s the plot twist no one could ignore in 2025: DEI backlash surged.
Companies like Rolls-Royce have publicly scaled back their DEI efforts. Starbucks and Target were sued over DEI-related issues.
Executives got cautious. Investors got loud. Politicians got louder. As I highlighted before, HR executives must stay informed because “What happens outside the office inevitably shapes workplace behavior.”
See also: Will corporate DEI survive a growing ‘anti-woke’ movement?
Why HR must care
Because this hits every strategic nerve:
- Legal risk
- Brand reputation
- Talent retention
- AI fairness
- Employee trust
Ignoring DEI isn’t neutral; it’s a risk multiplier. As I told Forbes: “Diversity is not optional, bullying won’t be accepted and inclusion is a force that cannot be ignored.”
The new play
HR leaders must:
- Audit DEI programs for impact, not optics.
- Validate AI tools for bias and add human oversight.
- Rethink DEI framing: focus on inclusion, belonging, equity.
- Train managers for real conversations about race, bias, and culture.
- Tie DEI outcomes to business outcomes everyone can stand behind.
- Build crisis plans for the political and legal landscape ahead.
Real inclusion is quiet, consistent, structural, not loud, reactive, or performative.
Systemic obstacles demand strategic HR, not tactical HR
Underneath all these challenges lies a deeper issue most leaders overlook: organizational architecture. SHRM found 34% of HR executives cite organizational barriers, not talent issues, as their biggest challenge.
HR is struggling because the organization is fragmented.
Strategic HR isn’t about putting out fires but fixing the wiring.
The new play
- Embed HR into business strategy.
- Build cross-functional partnerships with other departments.
- Quantify the ROI of learning, technology, and culture.
- Lay out a governance model where HR leads the future of work.
Put it all together, and the message is clear: 2025 was the wake-up call to:
- Be the architect, not the firefighter.
- Lead with purpose and humanity.
- Bring HR strategy into the business core.
In 2026, HR has the mandate and momentum to lead the transformation.
