HR’s Strategic Role Stalls as Priorities Shift: McLean & Company

Despite strides in formalizing strategies, HR’s role as a strategic partner to organizations has not grown as anticipated, according to McLean & Company’s recently published HR Trends Report 2025. While 48% of HR organizations report having a formal HR strategy, the report underscores the need for HR leaders to adapt to evolving priorities and effectively demonstrate the value of their initiatives to sustain and strengthen their strategic influence.

The report highlights that broader economic pressures and a competitive labor market will affect HR’s priorities in 2025. While in recent years recruitment dominated agendas, HR’s top priorities now focus on leadership development, employee retention, labor cost management, employee experience, and recruitment. This pivot reflects the growing importance of internal talent cultivation and cost-effective workforce strategies, reads the report.

“From 2020 to 2024, HR was instrumental in navigating the pandemic, remote work, and shifting workforce expectations,” says Will Howard, Practice Lead for HR Research and Advisory Services, McLean & Company. “Looking ahead, HR must pivot quickly to deliver value in areas like leadership development and retention while using data to prove their impact on organizational goals.” 

The report also highlights the growing complexity of leadership roles, as leaders are tasked with balancing employee wellbeing and organizational performance. According to McLean & Company, people managers experience 1.7 times higher stress levels than individual contributors. Organizations excelling in leadership development are nearly twice as likely to achieve strategic goals, optimize costs, and drive revenue growth, reads the report.

Another critical trend is the adoption of AI in HR functions. While AI has the potential to enhance recruitment, talent management, and learning and development, HR’s technological capabilities lag. The report ranks tech enablement as HR’s weakest competency.