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null Three challenges changing leadership in 2025 – and how to prepare

THREE CHALLENGES FACING LEADERSHIP IN 2025 - AND HOW TO PREPARE

In our 2025 ‘Anti-Trends’ article, one our headline predictions focused on leaders – and how underprepared they are for the year ahead.
 
You can dig deeper into all five anti-trends here, but in brief, “digital acceleration, alternative work models, economic uncertainty – the future of work is a fusion of opportunities and challenges. But tomorrow’s leaders aren’t ready.”
 
It’s a problem which most organisations are well aware of. A survey of nearly 1,500 HR professionals ranked leadership and managerial development as their number one priority for the new year.
 
But what exactly are the challenges facing leaders? What’s pushing your talented people at the top to feel overwhelmed, stressed and frustrated? We give our take on the key trends forcing leadership to evolve, with actionable advice for senior leaders to help you adapt in the year ahead.
 

Challenge #1: Digital acceleration is setting the pace

After years of stagnating productivity levels, it’s an exciting time for leaders.
 
The latest AI Jobs Barometer from PwC illustrated how sectors with a high exposure to AI are achieving five times the rate of growth in labour productivity, compared to markets with lower exposure rates.
 
Those that seize the opportunity presented by evolving technologies will be rewarded. But it’s putting leaders in a difficult position where they need to make complex decisions on tech stacks and operating models, with a varied understanding of the immediate and long-term impacts, as well as the return on investment.
 
How to prepare for a tech-first future
 
Most leaders aren’t digital natives. They are powerful strategists, good at managing people and knowing how to get the best out of their teams. But as technology becomes a key part of this dynamic, leaders must learn to seamlessly integrate human and machine intelligence.
 
As James Milligan, Global Head of Technology, Engineering and Contracting at Hays stated, “you will be left behind if you don’t embrace new technologies like AI.”
 
Knowledge is power – so our top tip is to dedicate time to upskilling in technologies such as Generative AI. Satya Nadella, CEO at Microsoft advocates being a ‘learn-it-all’, rather than a know-it-all. Make sure you’re AI literate, but also get comfortable with not always having the answer - it fosters innovation, trust and shared learnings.
 
Amid a busy schedule, it can be difficult to make time for learning. For Jerrell Moore, Chief Human Resources Officer at Cadence Bank, it’s all about identifying the symmetry between personal and business growth.
 
“What I see in a lot of companies is two different paths – one for leadership and the other for the business. If I’m a leader, learning can feel like additional work, but if it’s aligned to my company goals and it feels like what I’m doing is cohesive, then I’m more likely to dedicate time to it.”
 

Challenge #2: The world of work is more fragmented than ever

The return-to-office debates rumble on, with Amazon and JP Morgan both enforcing a full five-day office return in the first quarter of 2025. But employees aren’t willing to concede their hard-fought flexibility just yet. A recent survey found that 46% of workers in the US would rather find a new job than give up working from home.
 
It’s putting many leaders in an unenviable position as they try to marry company expectations with employee preferences.
 
And location will become an even more complex challenge in the year ahead. Facing ongoing talent shortages and cost pressures, organisations are increasingly exploring opportunities to outsource and offshore entire functions.
 
How to prepare for evolving team dynamics
 
Many organisations are feeling the pressure as industry leaders lay out their roadmap for returning to the office.
 
Uncertainty breeds anxiety, so it’s important that you approach your location strategy with both purpose and visibility. For John Dore (Programme Director, London Business School), a “wait-and-see approach” by leaders may do their organisations a “disservice” for differing their conundrum to another day.
 
However, rushing into a decision could be almost as damaging as not making one at all.
 
Our advice? Tailor your approach to your specific talent needs. If you’re searching for:
 
  • specialist IT skills,
  • underutilised talent, including care-givers and parents, and
  • previously overlooked talent, such as neurodiverse candidates, it’s likely you’ll need to be more flexible in your offering.
 
Of our top 10 IT contracting roles, flexibility and balance consistently take podium positions in employer value propositions. While compensation and innovation are important, people in high-demand roles including Data Engineers, Business Analysts and Java Developers are all searching for a good work-life balance. *
 
You need to ensure your value proposition matches the talent you’re trying to attract.
 

Challenge #3: Another 'Great Resignation' looms

More people are contemplating leaving their job than during the mass resignations witnessed in 2022. Cost pressures – a primary focus for leaders – are manifesting for employees in the form of bigger workloads, change fatigue and pay freezes.
 
If you need proof that your teams are feeling the pressure:
 
 
The level of fatigue in your workforce is probably pretty high, given the challenges faced over the last few years. But as an organisational leader, you’re likely looking at 2025 with the hope of implementing new technologies, new team structures and new processes in order to get work done more effectively.
 
How do you retain top talent while transforming your organisation?
 
How to prepare for a possible exodus
 
You can’t win the ‘talent war’ if you keeping losing your best people. But how do you plug the gaps?
 
Ongoing economic uncertainty adds another challenge, given that tight budgets won’t always permit you to simply increase salaries as an incentive to stay. You’ll need defined development and retention strategies that nurture the health, success and stability of your organisation.
 
These will need to be tailored to your organisation (as explored in this blog), but your foundations should include:
 
  • Opportunities to upskill: Career development is a key driver behind many departures, with almost 70% stating professional development as their reason for leaving. You need to demonstrate how their ambition is best suited to your organisation.
  • A focus on wellbeing: As Randall S. Peterson explains, “we used to be able to see if someone was struggling, but now we often have to rely on what people choose to show us, oftentimes over a screen.” Given the skyrocketing rates of employee burnout and stress, your wellbeing efforts will need to go beyond social events and free food.
 

Is leadership losing its attraction? 

Digital acceleration, fractured workforces and looming resignations are just the tip of the iceberg. Look across the C-Suite and individual functions are facing their own battles.
 
CHROs are tasked with succession planning at a time when ‘ambition’ is changing. Our recent edition of the Talent Blueprint explores how Gen Z are favouring personal growth, focusing “on the day job and getting results,” rather than climbing the organisational hierarchy.
 
For CFOs, the move to mandatory sustainability reporting and assurance is proving complex. The digital mandate for reporting under the Corporate Sustainability Reporting Directive is due to come into effect this year, creating a standardised digital format to allow for easier checking and comparison across businesses.
 
What’s clear from the challenges facing leaders this year is that traditional forms of authority will not be effective. “The command-and-control style of leadership is over”. 2025 will require leaders who practice both active listening and learning, show empathy, build trust and can motivate and engage people “in the ways they want to be engaged.”
 
Good organisations are built on the actions of good leaders. Make a difference with our support.
 

Discover more leadership hacks here: 

AUTHOR

Nigel Kirkham
CEO, Enterprise Solutions at Hays

Nigel Kirkham has spent the last 30+ years driving growth in major global businesses. A strong, transformative Chief Growth Officer, he brings a Big 6 Consulting Partner background as well as large-scale BPO and outsource business experience. A blend of strong business acumen and C-level operating experience help deliver high revenue growth and business expansion.

His most recent positions include TMF Group, the global Financial Services business where he sat on the ExCo as Chief Client Officer; Avanade, the JV between Accenture and Microsoft, a global tech giant and largest implementor of Microsoft technology in the world, where he was Global Head of Sales; CSC (Computer Science Corporation), the tech giant (now DXC Technology), where he ran several Industry Verticals, including Financial Services, Retail & Consumer Goods, Transport and Technology.

Prior to this he ran Xansa’s consulting business in the US, where he was based in New York. He also spent 12 years in KPMG Management Consulting, the last 5 years as a Partner in KPMG Consulting in the UK. In this role he also spent 4 years in the Middle East, setting up and running KPMG’s business in the Lower Gulf, where he was based in Abu Dhabi.