elementsuite, an HR and workforce management company owned by Zellis, has released new research on the state of UK HR in 2025. The results reveal a difficult landscape for HR professionals. 80.5% of respondents reported that changes to National Insurance (NI), have had a negative impact on cost management and workforce planing. In addition, 62.5% of respondents report that economic pressures and government policies have caused significant or moderate changes in hiring strategies. The research reveals a silver-lining: HR leaders respond with strategic agility and resilience. Over half of UK businesses remain optimistic and are prepared to adapt and plan for success in the face of uncertainty.
This new study, which surveyed HR professionals in the UK’s largest online HR community HR Ninjas and surveyed 490 of them, shows that HR has moved beyond firefighting. It is instead embracing a strategic role that drives workforce efficiency, champions employee wellbeing, prepares for future workforce changes, and embraces a more proactive approach.
Lizzie Henson is the founder of HR Ninjas. She said, “HR has a resilient nature.” No matter what is thrown at them, we have seen how the HR community comes together and solves problems.
Key Findings:
Economic pressures and HR readiness are both real
- 80.5% say that NI has negatively affected cost management and workforce plan, and sectors such as retail, real estate, and agriculture have felt the pinch the most.
- In spite of this, a staggering 74.5% say that they are prepared for the changes in the economy.
HR becomes more strategic
- 72.5% say that their role as HR professionals has changed in the last three years.
- The biggest shifts (80%) are reported by larger organisations (1,000-4999 employees).
The adoption of AI and HR technology is increasing
- AI is being used by 17.9% of HR teams, while 53.1% are exploring or testing AI tools.
- In 2025, despite tight budgets 20,4% of organizations will increase their spending on HR technology.
Some are on the lookout for redundancies
- 31.3 % of HR professionals anticipate workforce reductions by 2025.
- The most likely sectors to be affected by job cuts are retail, education and restaurants, while the least likely (13.6%) is smaller businesses with fewer than 50 employees.
Retention and recruitment remain a challenge
- Due to economic pressures, 62.5% HR teams have changed their recruitment strategies.
- Only 21.8% of organizations say that they have improved their turnover.
Victoria Beaven said that the report was a “raw and honest reflection” of HR in the year 2025. It reflected the challenges of balancing the demands of cost with the needs of people, managing government policies and keeping organisations agile in an ever-changing landscape. It highlights the adaptability and grit of HR teams in the UK.
Additional findings:
Industry divide: Growth or survival?
- 33.1% organizations, mainly in the education, manufacturing and retail sectors, have as their primary strategy to cut costs.
- While growth-oriented industries such as IT & Communications, utilities, and Professional Services are increasing their innovation and expansion, others, like the professional services, utilities and IT & Communications, are also doubling down.
The top HR priority is wellbeing
- In 2025, employee wellbeing is the top priority for HR in most sectors. This includes education, healthcare and hospitality.
- 43.5% HR leaders believe their organizations will increase investments in wellness initiatives.
- The top three sectors for spending on well-being are Education (55%), Hotel (55%) & Financial Services (54%)
ED&I still matters despite budget pressure
- 59% of HR professionals continue to rank equity, diversity and inclusion (ED&I), as a moderate or high priority.
- The most committed are not-for-profit organisations (87%) as well as public sector organisations (81%).
Research
elementsuite and HR Ninjas partnered to better understand the way HR teams adapt to the business environment in 2025. HR Ninjas is the UK’s biggest free online HR community. It provides support and insight to more than 36,000 HR professionals. The survey collected insights from 490 professionals in various industries.
The first time this post appeared was on HR News.
