Strategic human resources management: a 2025 guide

People are a business’ greatest asset, making human resources management a top strategic priority for 2025.

However, HR teams are facing mounting challenges in today’s economic climate. Half of HR leaders have dealt with budget cuts in the past year, and 60% struggle to build HR business cases due to limited data and People insights.*

Modern HR software can help overcome these hurdles, enabling organizations to navigate constraints and unlock the potential in their People strategies. But to utilize this technology effectively, HR teams must understand the role human resources plays in achieving broader business objectives. For this, you need a strategic human resources management approach that links People goals with long-term company outcomes.

This guide explores the top trends shaping strategic human resources management in 2025, offering expert insights and actionable advice to help HR professionals align People strategies with broader organizational goals.

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*Leapsome Workforce Trends Report, 2024
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Strategic human resources management defined & explained

Strategic human resources management is the process of aligning HR initiatives with wider business goals. Unlike traditional HR management, which focuses on day-to-day functions like administrative work, recruitment, onboarding, and payroll, strategic HR is proactive.

Strategic HR connects People processes to organization strategy and prioritizes activities based on business impact.

Key responsibilities of strategy HR management include:

• Workforce planning
• Employee engagement
• Learning and development
• Talent management
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Traditional vs. strategic HR management

Before digging in, let’s quickly explain the key difference between traditional and strategic HR management.
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Traditional HR management

Focuses on current needs and short-term department goals, addressing day-to-day functions like recruitment and payroll.
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Strategic HR management

Integrates People processes with company strategy, positions HR as a boardroom partner, and uses data-driven insights to support long-term success. 

By adopting strategic HR management, People professionals can better showcase HR return on investment, build effective HR business cases, and gain buy-in from the C-suite.
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6 top trends shaping strategic human resources management in 2025

The business landscape continues to change, driven by evolving employee expectations, technological advancements, and talent shortages. Strategic HR enables teams to adapt to these changes, forecast workforce demands, and align People initiatives with business needs — ultimately helping build resilient, future-ready organizations.

Let’s explore the six trends driving strategic HR management in 2025.
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1. Adopting HR technology

HR technology is now mission-critical for businesses, with 98% of companies relying on it to streamline core HR and employee enablement processes.

Features like analytics and AI help HR teams save time and streamline tasks across the employee lifecycle — from learning and development to reviews and surveys. But without a robust, integrated tech stack, teams may struggle to collaborate efficiently, manage data securely, and gain holistic insights to make informed decisions.

Interconnected HR platforms like Leapsome can help People teams enable collaboration, enhance employee engagement, and support decision-making. 

“HR platforms are more than just payroll and transactional functions now — they’re actually thinking with you,” noted Leapsome’s VP of People & Culture Luck Dookchitra in a conversation with HR Brew. “Including generative AI and other advanced features really makes these solutions smart for smart people in the modern workforce.”

Looking ahead, our 2024 Workforce Trends Report identified the top three tasks HR wants to automate:

1. Analytics and reporting (41%)
2. Reviews and performance management (36%)
3. Employee data management (36%)

Automating these functions will allow HR teams to move beyond routine administrative tasks and collect richer, more unified insights into how People initiatives impact both employee satisfaction and company objectives. 
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2. Embracing AI in HR

AI and process automation are transforming HR, reducing the time spent generating reports, analyzing data, and developing actionable plans. 

Tracy Avin, Founder of TroopHR, highlights the potential of these technologies to drive innovation: “By adopting AI, People leaders will be better prepared to design advanced strategies for employee engagement and organizational success, driving innovation at an unprecedented pace.”

However, despite the rush to embrace popular tools like ChatGPT, employees aren’t using AI as much as HR leaders and managers. Only 42% of individual contributors (ICs) in tech and consulting currently use it at work — the so-called “AI fear” is creating job security concerns, holding some professionals back. 

But as Marie Richter, Fractional Chief People Officer and HR Consultant, puts it, “AI and automation aren’t replacing HR — they’re empowering it. By embracing these technologies to handle routine tasks, HR professionals can focus on what truly matters: strategy, employee experience, and driving organizational change.”

AI-powered HR and people enablement tools like Leapsome can help refine your strategic human resources management approach to build high-performing teams and retain top talent. From facilitating training for remote team members to enhancing employee engagement and nurturing performance, these solutions can provide crucial insights to yield results across your company.  
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3. Leveraging HR as a strategic business partner

Many HR professionals face an uphill battle to convince stakeholders of the need to invest in modern People processes. 

Melanie Naranjo, Chief People Officer at Ethena, recently discussed this issue: “The sad reality is: Most business leaders dismiss their HR counterparts before they’ve even entered the room.”

This perception often stems from HR being seen as “out of touch” with business needs, despite clear evidence linking HR initiatives to reduced turnover and improved productivity.

Strategic human resources management addresses this challenge by embedding HR into the organizational decision-making framework, emphasizing the value of quality HR data and insights in driving executive decisions — especially during periods of change.

By collaborating with leadership, HR teams can proactively anticipate how changes will affect people, roles, and workflows, allowing them to mitigate potential issues and ensure effective communication. 

Granular HR data can also offer the insights necessary to shape more people-focused goals grounded in your company’s current reality. These capabilities can drive high performance across key areas, including: 

• Aligning business goals with workforce capabilities to ensure targets can be met

• Developing competitive recruitment, onboarding, and retention strategies

• Fostering a healthy and inclusive work environment that encourages honest communication

• Creating a culture of continuous learning to boost engagement and fill skills gaps

• Outlining individual and team performance development plans to support progression   

HR tech systems should provide real-time data and analytics to track and optimize these activities over time. Katerina Arsova, Leapsome’s Head of People & Talent Operations & Partnerships, offers advice for those who feel overwhelmed by this process: 

“Start simple and have clear objectives — whether that’s reducing turnover, improving employee engagement, or enhancing the training programs you have in place. Be clear about what your strategic objective is and how it adds value to your business. From there, you can map out the data you need to measure success.”

4. Upskilling & reskilling talent (especially in AI)

Over a third of HR leaders have experienced hiring freezes and layoffs in the last year. Managers are stretched thin, and employees are forced to wear many hats to keep up. With that in mind, upskilling and reskilling for skills agility (the ability to harness the right skills at the right time for the right work) has become critical.

💬 “Ensure you’re hiring talent or upskilling the team you have to make sure they’re able to work with and understand your HR data and how it ties to the bigger picture of your company’s strategic objectives.”

— Katerina Arsova, Head of People & Talent Operations & Partnerships at Leapsome

LinkedIn’s 2024 Workplace Learning Report highlights a key strategy for unlocking skills agility: leveraging AI to streamline time-consuming learning content creation.

AI-powered HR tools like our very own Learning and Competency Framework modules can be game-changing for People teams. These features effortlessly help users build learning courses, quizzes, and competency framework templates while saving hours of effort. 

In addition, according to our 2024 Workforce Trends Report, knowing how to use AI is the number one skill employees want to learn right now. Upskilling or reskilling in this area is crucial to addressing knowledge gaps and increasing HR tech adoption, which will be a prerequisite for success moving forward.

“Each employee has their own aspirations, experiences, and strengths,” Shruti Bharadwaj, Head of Talent, Learning & Culture at Airtel, told LinkedIn. “AI will enable more and more learners to tailor their learning and shape their careers.”
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5. Rethinking work models

Several companies are rethinking their approach to hybrid and remote work. Some are shifting toward stricter in-office policies — for example, Amazon CEO Andy Jassy announced that tens of thousands of employees would have to return to the office five days a week, marking the end of the company’s hybrid model introduced during the pandemic.

In contrast, other organizations are doubling down on flexibility to protect the remote employee experience. Spotify’s CHRO, Katarina Berg, rejects rigid mandates for Spotify employees.

“It’s harder and we all struggle to collaborate in a virtual environment,” Katarina told Raconteur. “But does that mean we’ll start forcing people to come into the office as soon as there’s a trend for it? No.”

The ongoing debate between remote and in-office work reflects broader changes in employee expectations. For instance, our research reveals a disconnect between managers and individual contributors (ICs): While managers often lean toward in-office or hybrid setups, 30% of ICs report being more productive in fully remote roles, and 43% favor a hybrid environment. 

Balancing leadership expectations against employee demands is always challenging. Flexible working remains a top priority for today’s professionals, with 69% saying the ability to work remotely is important. So, if your organization adopts an in-office approach, HR must track its impact on employee retention and engagement. 

Additionally, by choosing an integrated HRIS software solution like Leapsome’s HRIS, you can connect your People management processes to create a single source of truth for all your HR activities — regardless of where your team members operate.

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6. Investing in diversity, equity, inclusion & belonging (DEIB)

Strategic human resources management should consider every aspect of the employee experience, especially regarding diversity and inclusion. Yet, experts have commented on a decline in DEIB efforts among US companies due to economic pressures and political challenges. 

Unfortunately, these initiatives are often deemed expendable in these circumstances — but in reality, DEIB surveys can significantly improve an organization’s competitive position.

Many DEIB leaders have demonstrated the positive effect a mature DEIB strategy has had on their business. According to a TechTarget report:

• 63% attested that DEIB efforts extensively positively impacted agility/innovativeness
  
  
• 68% saw a vast positive impact on brand perception
  
  
• 64% saw an extensive impact on recruitment and retention

However, these results reflect the degree of DEIB integration and alignment with business strategy. The most successful DEIB initiatives go beyond surface-level actions to facilitate a deeper understanding of how diversity can benefit teams, build resilience, and drive organizational success.
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Examples of strategic HR management models

Strategic human resources management looks different for every business, and the approach you choose will depend on your specific priorities and objectives. 

Still, there are tried-and-tested models you can use to base your strategy around. Here are a few examples of these models and why you might want to use them in your HR plans:

• The high-performance work system model — This approach focuses on creating a culture of continuous growth by following HR best practices and emphasizing employee autonomy. It’s well-suited to companies that want to boost team member engagement by encouraging people to contribute their ideas and expertise through surveys and feedback, resulting in improved organizational performance.  

• The agile HR model — The agile model emphasizes flexibility and responsiveness to ensure HR can adapt to changing business needs. It promotes cross-team collaboration with regular feedback loops and focus groups to improve organizational visibility, drive innovation, and enhance decision-making.

• The Harvard framework model — This people-centered model focuses on the impact of HR practices on stakeholders, from business leaders and shareholders to employees. Like any strategic HR management approach, it links HR processes with business goals to help make a stronger case for boardroom-level buy-in.

• The resource-based model — The resource-based model centers on human capital, viewing organizations as a collection of valuable people resources and HR as a driver of competitive advantage. It encourages the strategic and continuous training and development of talent, leveraging employee strengths to align HR processes with broader business goals.
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Foster resilient teams with strategic human resources management

💬 “One of the things I love about Leapsome’s platform is that you have this ability to provide feedback and evaluate performance but then you also have the tools to support that. It’s not just empty words going out there, but there’s actual training and education and content to support what those next steps are.”

— Tracy Avin, Founder of TroopHR

HR teams have showcased remarkable adaptability in recent years, from facilitating remote work to advocating for employees and doing more with fewer resources. Yet, almost half (47%) of HR leaders struggle to align their initiatives with business goals — a gap that needs to be bridged.

As budgets shrink and technology transforms the landscape of People management, demonstrating HR’s value on a company-wide scale is vital. The key to this? Having accurate, relevant data on hand that can quantify the impact of People initiatives and link employee engagement to company performance. This is where AI-powered HR software comes in. 

Our people-centered HR platform enhances performance reviews, goal-setting, and employee development with powerful automations, AI insights, personalized recommendations, and detailed analytics. With all the tools you need in one place, your teams can drive continuous improvement and track HR’s impact on everything from productivity to company culture over time.

“Consolidating HR systems into intuitive, all-in-one platforms is crucial for optimizing processes, enhancing user experience, and safeguarding data integrity,” says Jenny Podewils, Co-Founder and Co-CEO of Leapsome. “By providing AI-driven tools for better insights and more, companies can stay agile, reduce overwhelm, and build a more resilient workforce.”

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FAQs about strategic human resources management

Why is strategic HR important?

Strategic HR is important because it ensures your People processes bring you closer to meeting organizational targets. It provides a framework linking people management strategy and development initiatives to long-term business goals, matching resources to future needs and placing talent at the forefront of organizational success.

By aligning HR activities with broader company objectives, you can ensure you have the right people in the right roles to drive performance. Plus, strategic human resources management tends to prioritize employee enablement, fostering a more inclusive, engaging company culture.