Key Talent Management Trends to Watch in 2025

February 18, 2025 – Talent management is rapidly transforming as AI advancements, hybrid work models, and shifting leadership expectations reshape the employee experience. To capture these changes, Odgers Berndtson surveyed HR leaders and identified five key trends for 2025 that present both opportunities and challenges for the way organizations manage and engage their top talent.

1. Talent Attraction: Building the Workforce of Tomorrow.

Twenty-five years since the term “war for talent” was first coined by Steven Hankin at McKinsey & Co., fierce competition for skills and experience still emerges as a critical priority among organizations, above all other talent challenges. Talent attraction is not just a short-term priority—it’s a long-term competitive advantage. We must rethink how we position our organizations as employers of choice, one respondent said.

Odgers Berndtson found that 73.1 percent of HR leaders cite talent attraction as either very important (42.3 percent) or critical (30.8 percent). External factors such as industry-specific skills shortages (61 percent) and market competition (50 percent) remain key challenges in efforts to attract and retain talent. Based on Odgers Berndtson’s survey, small organizations (500–999 employees) will heavily depend on AI-driven recruitment tools to scale efficiently. Mid-sized firms (1,000–4,999 employees) balance attracting new talent with retaining existing employees through internal mobility programs. For large, globally operating enterprises, aligning employer branding strategies across multiple markets is a complex task. Some companies emphasize industry collaboration to collectively meet talent demands, with many moving towards emphasizing skills-based hiring over hiring for roles.

2. Engagement, Well-Being and Retention: Putting Employees at the Center.

Another key area of focus for organizations in 2025 will be in their ability to retain talent through better engagement and employee well-being efforts, according to the Odgers Berndtson report. “Burnout is our biggest challenge,” shared one respondent from the energy sector. “Leaders must learn how to manage workloads while maintaining engagement.”

“With hybrid models embedded, large organizations need tools to measure engagement and manage workloads,” commented an HR leader in a financial services firm. The report found that 76.9 percent of respondents cited talent retention as either critical (53.8 percent) or very important (23.1 percent). Key ways to keep employees engaged with the organization: career growth & learning opportunities (cited by 92 percent of respondents), meaningful work (65 percent), and inspiring leadership (50 percent). “This reflects the long-term nature of efforts in engaging and retaining talent,” the Odgers Berndtson report said.

In Australia, for example, large enterprises report burnout and stress as their primary engagement challenge. Southeast Asian respondents highlight turnover challenges and limited career progression, particularly in smaller organizations. Mid-sized organizations face a dual challenge: managing career stagnation while maintaining trust and team cohesion in hybrid environments.

“The solution requires a multi-faceted approach: organizations must rethink recognition, career pathways, and leadership development to reduce fatigue and improve morale,” the Odgers Berndtson report said. “Specifically for employee well-being, some strategies organizations are planning for 2025 include expanding mental health support (61 percent of respondents), creating opportunities for social connection (58 percent), and stress management/resilience building programs (50 percent).”

3. Leadership Development: Evolving Requirements.

A good 65 percent of respondents said that their talent management budget would remain unchanged in 2025. ”Areas of spend priority will be in talent development and leadership programs, besides more general skills upskilling,” the Odgers Berndtson report said. “While driving performance remains essential, organizations increasingly value empathy, inclusivity, and resilience as core leadership skills. These themes resonate across industries, workforce sizes, and regions.”

The most critical leadership skills/themes to augment in 2025 would be:

Coaching and mentoring, together with EQ/self-awareness, were cited by 38 percent of respondents. Further down the priority list, was four percent citing ethical leadership as a focus area for development among senior talent. Leaders must create cultures that balance high performance with inclusion, particularly in hybrid and global teams, according to one chief people officer.

Related: 2025 Talent Trend: New Leaders Focusing on Team Alignment and Impact

In the defense and industrial sectors, Odgers Berndtson found that there is a particular emphasis on innovation and creative problem-solving, reflecting sector-specific needs to adapt to technological disruption. One HR director in the financial services industry said: “In 2025, resilience and emotional intelligence will separate good leaders from exceptional ones.”

4. Skills Development: Supporting Talent Growth

As industries accelerate towards digital transformation, there is wide recognition that the workforce must upskill and adapt. One respondent in healthcare said: “Skills like data analysis and AI optimization will define workforce readiness in the coming decade.”

There is also a sense that there is not so much a “skills shortage” but rather a shortage of individuals with the right mix of skills and experience fit for the organization’s purpose. “Hence developing internal talent to round out diverse aspects of their expertise will be critical,” the Odgers Berndtson report said.

In 2025, the most critical functional and technical skills/themes to augment will be:

“Further, small organizations are prioritizing digital literacy and AI skills to optimize processes,” the Odgers Berndtson report said. “Mid-sized firms are focused on critical thinking and problem-solving to foster innovation, and larger firms highlight a growing need for cybersecurity expertise and data analysis to future-proof operations. Of note is the lower priority respondents have placed on skills and knowledge in risk management and sustainability/ESG. Responses reflect a universal recognition that the future workforce must balance technical agility with critical decision-making capabilities.”

5. Innovation and Technology Adoption: Embracing Change.

Technological transformation remains a cornerstone of talent management strategies, with leaders prioritizing tools that enhance efficiency, decision-making, and workforce engagement, according to the Odgers Berndtson report.

“Adopting new technologies requires alignment across global teams, which adds layers of cost and complexity,” shared a respondent from the professional services sector.

In terms of technology supporting talent management, respondents most interested in adopting:

• AI-based recruitment and screening tools (50 percent cited this).
• Employee engagement analytics (46 percent).
• Predictive analytics for retention (42 percent).

Global enterprises, meanwhile, face barriers like cost and data privacy concerns, alongside challenges in aligning tools across diverse markets. Twenty-three percent did cite virtual and augment reality for training as something to explore/adopt in 2025. More “classic” and staple technologies have slipped down the priority list, e.g. L&D platforms was cited by 34 percent of respondents.

Related: Redefining Talent Management for the Modern Age

Respondents also cited that cost constraints/budgets could impede their efforts with adopting new technology. Additionally other challenges include skills available internally to implement new technology especially AI tools, change fatigue, competing priorities (and trying to engage the workforce in learning technologies), and linking new technology with current.

Overall, 73 percent of respondents felt their organizations were somewhat prepared to meet talent management demands in 2025. For the most part, companies have a talent management strategy to execute, however Odgers Berndtson found that they anticipate a few things can get in the way of their ability to deliver:

• Day-to-day demands of business taking time away from upskilling/development efforts.
• Competing priorities of TM teams – hard to find time to train, to mature and to scale capabilities.
• External issues and pressures (regulatory concerns, immigration policies impacting talent pools, etc.).
• Fast moving market and evolving skills – unlikely to ever be fully prepared (need to be responsive/flexible).

Looking Ahead: Beyond 2025

Odgers Berndtson’s CPOs and HR leaders also offered their collective insights on the direction of Talent Management in the near future:

Related: AI and the Workforce: Navigating the Balance Between Productivity and Uncertainty

Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor  – Hunt Scanlon Media