HR Policy Association's 2025 Outlook

Disruption & Evolution: Our Expectations and Wildcard Predictions for 2025

With CEOs aiming for corporate growth through transformation, deployment of generative AI, and talent upgrades, expectations of CHROs are projected to rise amid a disrupted global and domestic public policy environment. 

Global context: A record number of countries held national elections last year and the following trends are instructive as employee voice gains in importance: 

• Voters globally, including in the U.S., jettisoned incumbent parties over concerns about the economy, prices, and social and cultural issues. With electorates sharply split, Pew reports a pronounced increase in support for populist conservative politicians worldwide. 

• Geopolitical instability (Russia/Ukraine, Middle East, Asia) has grown exponentially, and employees are paying attention to how, when and why companies engage and respond. 

• The unprecedented convergence of major HR policy issues across developed countries will continue, with expected action on pay equity and transparency, artificial intelligence, diversity, labor relations, and ESG/supply chain reporting. 

Trump 2.0: In the U.S., President-elect Donald Trump has moved swiftly to choose members of his Cabinet, including a Teamsters-endorsed Secretary of Labor candidate. 

• Embracing AI, Trump has appointed several conservative tech leaders to advisory positions, including tech investor David Sacks as the new cryptocurrency and White House AI czar. While these advisory roles are typically part-time, allowing advisors to stay engaged with industry innovations, they heighten the risk of conflicts of interest with their business operations.

• The practical perspective on skilled talent brought by the tech moguls has led to a clash with anti-immigration Trump loyalists over the H-1B immigration program, with President-elect Trump voicing his support for the program. Will this support last? 

• Tariff policy is top of mind for CHROs as strict tariffs will impact business and talent strategies. It remains to be seen whether increases will be implemented or just used as a bargaining chip. 

Republican Congress facing big decisions with small margins: The 119^th Congress will include the smallest House majority in 16 years, making legislating a challenge. 

• House Republicans start with a four-seat majority and even with President-elect Trump’s strong endorsement, today’s vote to elect Speaker Mike Johnson (R-LA) could be dicey, as Rep. Thomas Massie (R-KY) has vowed to vote against him. The GOP majority will shrink to two seats after Reps. Elise Stefanik (R-NY) and Mike Waltz (R-FL) are confirmed for administration posts. 

• Senate Republicans hold a narrow three-vote majority, 53 to 50. However, passing legislation typically requires broad bipartisan support to surpass the 60-vote filibuster threshold, unless it qualifies for budget reconciliation—a process requiring only a majority vote but limited to measures affecting revenue. 

Please read on as we highlight the most relevant HR trends and policy initiatives of the incoming administration and Congress, including DEI, labor, and SEC policies. 

Talent & Culture: Pressures on DEI & Immigration

The second Trump administration’s expected approach on both DEI and immigration may significantly impact large employers’ ability to find and retain top talent. These changes are likely to push CHROs and their teams to develop new strategies for winning the best talent, regardless of background or characteristics. 

Diversity, Equity & Inclusion: Taking the “woke” out of business has been a major talking point for right-wing politicians for several years and was a main pillar of the Trump campaign. The second Trump administration will capitalize on the so-called “backlash” and promises, like President Biden on labor, an “all of government” approach to ending DEI practices it perceives to be unlawful.  

Promising an anti-DEI crusade is one thing; taking actions that will impact private employers’ DEI initiatives core to their talent strategies is another. Here are some ways the administration’s war on DEI might manifest: 

• Conditioning federal contracts or grants on ending certain DEI practices; 

• Issuing executive orders to target certain DEI practices, such as the anti-DEI training EO issued during Trump’s first term which was largely blocked in court and later reversed by the Biden administration; 

• Pursuing EEOC investigations and enforcement actions targeting employers for perceived unlawful DEI practices; and 

• Ending current federal contractor affirmative action requirements or using current enforcement mechanisms to target DEI practices (see recent story regarding OFCCP action triggered by a conservative group complaint against American Airlines). 

Yes, but:  

• A President’s ability to enact policy by issuing regulations through the federal contracting authority has been increasingly rebuffed by the courts in recent years. Examples include the vaccine mandate, minimum wage hike, and student loan forgiveness. 

• The EEOC is (mostly) limited to investigating charges brought to it by private parties and cannot change the law on its own. Individual commissioners can bring charges, but this tactic is rarely used. 

Takeaways for employers:  

• There is little the Trump administration can do to directly impact private employers (particularly those who are not federal contractors) who comply with federal anti-discrimination laws, such as Title VII.  

• However, anti-DEI rhetoric is expected to be strong. Coupled with heightened scrutiny of large employers, this may have some chilling effect, absent clear guidelines.  

• Now is the time to audit corporate DEI practices to ensure they comply with legal requirements and align with your company’s culture, values, and mission.  

• Effective communication, both internally and externally, will be critical. Employers must be ready to defend their practices not only in legal settings but also in the court of public opinion (see recent coverage of JPMorgan Chase and Costco aggressively defending their DEI strategies). 

Wildcard 

• Growing pressure on DEI initiatives may compel employers to adopt new strategies for recruiting and retaining diverse talent. Even prior to the recent surge in anti-DEI sentiment, many organizations were seeking alternative approaches to more effectively build a diverse workforce. 

Immigration: Curbing both legal and illegal immigration was another major campaign issue of President-elect Trump and a policy focus of his first term in office. Here are some ways that the second Trump administration’s likely actions on immigration could impact employers:  

• Widespread workplace raids and I-9 audits: Expect a wide variety of employer targets for such raids, not just in the typical industries, particularly in the first year.

• Restrictions on H-1B visas: The first Trump administration attempted to reduce employer use of H-1B visas by raising the salary threshold for such workers and publishing the names of companies where such visa holders work. However, the recent skirmish between Trump’s tech titans and more traditional Trump supporters led to the incoming President’s endorsement of the H-1B program. 

• Mass deportations: Focused on undocumented immigrants, the method for identification and deportation is not yet clear. 

• Ending the DACA program: President-elect Trump has a mixed record on this issue, simultaneously calling for an end to the program and expressing a willingness to preserve it, most recently in December.  

Takeaways for employers:  

• The transition back to a more rigid approach to immigration compliance and enforcement will require employers to carefully articulate how immigration fits into their talent strategy. 

• Conduct internal I-9 audits to determine and eliminate risk. 

• Prepare for the impacts of a workplace raid – from individual worker disruption to the emotional shock and toll such raids may have on your workforce as a whole.  

• Prepare contingencies for talent gaps that could arise because of H-1B visa restrictions.  

Wildcard 

• The continued influence of tech leaders on the administration could lead to a revised approach, with a clearer delineation between border control/illegal immigration and skilled talent needs. 

Leadership – CEO and CHRO Trends

We anticipate that the challenges faced by CHROs and CEOs in recent years will continue to grow, requiring new strategies to navigate the evolving business environment. 

CEO turnover: Turnover increased over the past several years with 2024 set to reach an all-time high, according to Challenger, Gray & Christmas. As of October 2024, CEO departures increased 19 percent over last year as CEOs are under increased pressure to generate profits and value. 

CEO security: The tragic murder of UnitedHealthcare CEO Brian Thompson led companies to review their security. An HR Policy Association survey conducted after the murder found 73% of members provide executive security and over half plan to enhance security in the next 12 months.

However, inconsistent IRS and SEC guidelines may pose challenges to beefing up executive security. 

• The IRS allows an exclusion from wage income if an “overall security program” is established and there is a “a business-oriented security concern.” 

• But the SEC offers no such exclusion – security outside the office is considered a perk and must be included in total pay in the proxy. 

Evolution of the CHRO role: As organizations face constant disruption and evolving market demands, the role of the CHRO has become pivotal in driving not only HR transformation but business transformation. 

• Leading change. The modern CHRO is focused on aligning talent strategies with business objectives, fostering a culture of agility, and ensuring workforce readiness. These are challenging tasks that move beyond the traditional realm of HR into shaping the future of the enterprise through its people.

• Wage gap closing. Although still typically the lowest-paid C-Suite position, CHRO pay and parity with other C-Suite roles is growing. Stanford Economist Nick Bloom expects this trend to continue over the next several years as recognition of the importance of the CHRO role grows. 

• Trusted advisor to CEO. Authors of the book The Lifecycle of a CEO spoke about the critical role of the CHRO to CEO success in an Association webinar in November. They noted that the CHRO’s role spans the lifecycle of the CEO: from CEO succession to working with the CEO through all phases of development, and serving as a thought partner, trusted advisor, and confidante.   

Wildcard 

• As the CHRO role continues to evolve, we have seen an influx of CHROs with strong business or financial backgrounds who are new to HR, as well as combined CHRO roles with functions like Communications, Marketing or even IT. This has, in turn, elevated the Head of Total Rewards, Head of Talent and other HR leadership team roles to take on some of the responsibilities that were previously the sole realm of the CHRO. Stay tuned for Association resources aimed at developing these leaders over the next few years.

Labor & Employment Regulatory Landscape

Aside from tax and immigration legislation, policy changes in 2025 will occur primarily through regulation, with a focus on reversing Biden administration rules and implementing key Trump priorities – with a few potential wildcards to look out for.  

Will unions influence labor policy? After the Biden administration’s all-out assault on employers on the labor front over the last four years, many companies are breathing a sigh of relief. However, President-elect Trump’s choice to head the Department of Labor, Rep. Lori Chavez-DeRemer (R-OR), has heightened fears about the developing love affair between certain Republicans and organized labor.  

• A pro-union Labor Secretary: Rep. Chavez-DeRemer is an avowedly pro-union Republican who was one of three Republicans to vote in favor of the PRO Act, a labor law reform bill viewed as anti-employer. Rep. Chavez-DeRemer’s nomination was strongly supported by Teamsters President Sean O’Brien, who worked closely with Trump during the transition. 

• A Republican populist shift towards labor: A growing populist wing of the Republican party, including Sens. Josh Hawley (R-MO) and Marco Rubio (R-FL), is actively courting organized labor amidst a Republican backlash against business over perceived “woke” practices. 

• President Trump’s union support: Blue-collar voters turned out in droves to vote for Trump and he has voiced public support for striking dockworkers – one of several times in which Trump has supported workers over management.  

Yes, but: Despite political rhetoric, expect an overall pro-business regulatory environment (apart from DEI and immigration). 

• The Department of Labor staff positions surrounding Rep. Chavez-DeRemer – including those who set and execute the policy agenda – are likely to be pro-business officials.  

• Expect a renewed emphasis on apprenticeship programs. The goals of these programs by design would benefit employers and organized labor alike.  

• The National Labor Relations Board, the primary entity which implements any administration’s labor agenda, is likely to resemble other Republican-majority NLRBs and will focus on undoing much of the Biden Board’s pro-union precedent-changing actions. 

• The five-member NLRB is comprised of two Democrats and one Republican, enabling Trump to nominate two additional Republicans, securing a majority. 

• Reports suggest the President-elect plans to dismiss NLRB General Counsel Jennifer Abruzzo early in his term, appointing an NLRB employee as acting General Counsel until a new nominee is confirmed. 

Wildcard 

• Politics and the pursuit of a greater voting bloc will continue to drive a shift in Republican party philosophy that will upend traditional business expectations. Will that shift result in greater government interference in corporate decision-making?