Navigating the current HR landscape in the UK during 2025 presents a myriad of challenges for business owners. From legislative shifts to evolving workplace dynamics, staying informed is crucial.
We speak to employers dealing with HR issues on a weekly basis, many of whom have tried to do their own HR and are not aware of up to date legislation
We have gathered togther an overview of the top five HR issues currently impacting UK businesses that we see business experiencing.
1. Lack of knowledge about employment law and reforms and compliance
The introduction of the Employment Rights Bill created significant changes, and addressed the one-sided flexibility, ensuring that jobs provide a baseline of security for workers
Here are some of the changes - read more here.
The end of exploitative zero hours contracts by introducing rights to guaranteed hours, reasonable notice of shifts, and payments for short-notice cancellation of shifts, with corresponding rights for agency workers.
The end of unscrupulous ‘fire and rehire’ and ‘fire and replace’ practices by considering dismissals for failing to agree to a change in contract as automatically unfair, except where businesses genuinely have no alternative.
Remove the two-year qualifying period of employment for the right to claim unfair dismissal,making it a day-one right, while simultaneously enabling employers to ensure the employee is a good fit for the job by establishing a new statutory probation period.
Strengthen collective redundancy rights by ensuring obligations to consult and notify apply when: (a) employers propose 20 or more redundancies at one establishment or; (b) employers propose an amount of redundancies which meets a new threshold to be established in secondary legislation.
Establishing day-one rights for unfair dismissal claims.
Extending the time limit for bringing employment tribunal claims from three to six months.
While these reforms will enhance worker protections, it does also increase the compliance burden on employers. This will lead to a rise in tribunal claims.
2. Workplace culture and behaviour
Employers must create a positive workplace culture to demonstrate that they protect their workers and offer support and safety. Training and incentives to retain staff have never been more critical. Businesses should create a culture that sets clear boundaries between work and personal time, promoting the value of rest and burnout prevention.
Persistent issues like bullying and workplace toxicity must be addressed along with robust anti-bullying policies and training programs to foster inclusive and respectful work environments.
There is also a newly added duty to prevent sexual harassment; employers must proactively address workplace behaviour and ensure robust policies are in place. Employers will be mandated to take "all reasonable steps" to prevent harassment, including from third parties. This would include conducting regular risk assessments and implementing robust policies. There should be a straightforward procedure for handling complaints. If companies do not comply, this could increase compensation for successful claims, underscoring the need for proactive measures.
3. Diversity, equality & inclusion (DEI) and family-friendly rights
Do you have strong and clear DEI policies? These are vital for attracting and retaining great people. In 2025, it is important to be an employer willing to accommodate family-friendly rights, such as flexible working arrangements, supporting employee wellbeing and compliance with evolving regulations. If you don't, you risk losing staff to companies that offer this.
The recent UK Supreme Court ruling defining "woman" by biological sex will mean you might have to reassess your inclusion policies.
Businesses now have to consider balancing providing inclusive environments with compliance with legal definitions, often considering solutions like gender-neutral facilities.
The code of conduct expected from all employees must be clear, and responsive mechanisms must be in place to ensure a respectful workplace.
4. Wellbeing and Mental Health
A huge concern for UK businesses in 2025 is the wellbeing of their staff. This has been driven by rising mental health challenges, increased long-term sickness, and evolving workplace expectations.
Workplace stress and burnout remain alarmingly high. A YouGov poll for Mental Health UK revealed that 91% of UK adults experienced high or extreme pressure at work in the past year, with 20% taking time off to recover.
All employers should implement proactive mental health strategies, including formal wellbeing policies and psychological safety initiatives. You must ensure your workplace is one in which employees feel safe to be vulnerable without fear of retribution.
Ensure your managers have been trained in mental health first aid and empathetic communication. Spotting problems in the early stages can lead to resolving situations more quickly.
All employers should invest in mental health support and create inclusive environments to support their teams.
5. Artificial Intelligence (AI) Integration
AI is transforming HR processes, from recruitment to performance management. While AI offers efficiency gains, it raises concerns about job displacement and ethical considerations. Employers must balance innovation with responsible AI adoption, ensuring transparency and fairness in their HR practices. It is also important not to rely on AI to answer HR questions! Or create your contracts, policies, and manuals using AI! These can often be incorrect and may cause you problems at a later date. There is no substitute for a qualified professional to check these documents. There are lots of useful tools but do your research carefully.
Also, be careful when using AI systems for recruitment, as they can inadvertently perpetuate existing biases. Amazon discontinued an AI recruitment tool favouring male candidates over female ones! Such biases can result in violations of the Equality Act 2010, exposing employers to legal liabilities. Again, there is no substitute for reading C.V.s yourself when looking for new staff members!
We haven't covered any of these topics in huge detail, each one has a lot to consider. This list is about raising awareness of these issues and make you consider your policies and procedures.
If you need help with your HR do get in touch and don't try to do it all by yourself!
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