Top Talent Management Trends to Watch in 2025

The 5 Key Talent Trends for 2025

1. Talent Attraction: Building the Workforce of Tomorrow

Twenty-five years since the term "War for Talent" was first coined by Steven Hankin at McKinsey & Co., fierce competition for skills and experience still emerges as a critical priority among organisations, above all other talent challenges.

In regions like Australia, building domestic talent pipelines is paramount. For small to mid-sized organisations, the ability to attract niche skillsets is especially challenging.

Highlights:

• • 73.1% of HR leaders cite Talent Attraction as either:
    
    
  • External factors such as industry-specific skills shortages (61%) and market competition (50%) remain key challenges in efforts to attract and retain talent.

Based on our survey, small organisations (500–999 employees) will heavily depend on AI-driven recruitment tools to scale efficiently. Mid-sized firms (1,000–4,999 employees) balance attracting new talent with retaining existing employees through internal mobility programs. For large, globally operating enterprises, aligning employer branding strategies across multiple markets is a complex task. Some companies emphasise industry collaboration to collectively meet talent demands, with many moving towards emphasising skills-based hiring over hiring for roles. 

2. Engagement, Well-Being and Retention: Putting Employees at the Centre 

Another key area of focus for organisations in 2025 will be in their ability to retain talent through better engagement and employee well-being efforts. 

"Burnout is our biggest challenge. Leaders must learn how to manage workloads while maintaining engagement", shared one respondent from the Energy Sector.

"With hybrid models embedded, large organisations need tools to measure engagement and manage workloads", commented an HR leader in a Financial Services firm.

Highlights:

• • 76.9% of respondents cited Talent Retention as either Critical (53.8%) or Very Important (23.1%).
  • Key ways to keep employees engaged with the organisation: career growth & learning opportunities (cited by 92% of respondents), meaningful work (65%), and inspiring leadership (50%). This reflects the long-term nature of efforts in engaging and retaining talent.
  • In Australia, large enterprises report burnout and stress as their primary engagement challenge. Southeast Asian respondents highlight turnover challenges and limited career progression, particularly in smaller organisations. Mid-sized organisations face a dual challenge: managing career stagnation while maintaining trust and team cohesion in hybrid environments.

The solution requires a multi-faceted approach: organisations must rethink recognition, career pathways, and leadership development to reduce fatigue and improve morale. Specifically for employee well-being, some strategies organisations are planning for 2025 include expanding mental health support (61% of respondents), creating opportunities for social connection (58%), and stress management/resilience building programs (50%).

3. Leadership Development: Evolving Requirements

A good 65% of respondents said that their Talent Management budget would remain unchanged in 2025. Areas of spend priority will be in talent development and leadership programs, besides more general skills upskilling. While driving performance remains essential, organisations increasingly value empathy, inclusivity, and resilience as core leadership skills. These themes resonate across industries, workforce sizes, and regions.

Highlights: 

• • The most critical leadership skills/themes to augment in 2025 would be:
    
    
  • Coaching and mentoring, together with EQ/Self-awareness, were cited by 38% of respondents. Further down the priority list, was 4% citing ethical leadership as a focus area for development among senior talent.

In the Defence and Industrial sectors, there is a particular emphasis on innovation and creative problem-solving, reflecting sector-specific needs to adapt to technological disruption. One HR Director in the Financial Services industry commented "In 2025, resilience and emotional intelligence will separate good leaders from exceptional ones."

4. Skills Development: Supporting Talent Growth

As industries accelerate towards digital transformation, there is wide recognition that the workforce must upskill and adapt. One respondent in Healthcare said "Skills like data analysis and AI optimisation will define workforce readiness in the coming decade."

There is also a sense that there is not so much a “skills shortage” but rather a shortage of individuals with the right mix of skills and experience fit for the organisation’s purpose. Hence developing internal talent to round out diverse aspects of their expertise will be critical.  

Highlights: 

• • In 2025, the most critical functional and technical skills/themes to augment will be: 
    
    
  • Further, small organisations are prioritising digital literacy and AI skills to optimise processes. Mid-sized firms are focused on critical thinking and problem-solving to foster innovation, and larger firms highlight a growing need for cybersecurity expertise and data analysis to future-proof operations.
  • Of note is the lower priority respondents have placed on skills and knowledge in risk management and sustainability/ESG. 

Responses reflect a universal recognition that the future workforce must balance technical agility with critical decision-making capabilities.

5. Innovation and Technology Adoption: Embracing Change

Technological transformation remains a cornerstone of talent management strategies, with leaders prioritising tools that enhance efficiency, decision-making, and workforce engagement. 

“Adopting new technologies requires alignment across global teams, which adds layers of cost and complexity,” shares a respondent from the Professional Services sector. 

Highlights:

• • In terms of technology supporting TM, respondents most interested in adopting: 
    -    AI-based recruitment and screening tools (50% cited this)
    -    Employee engagement analytics (46%) 
    -    Predictive analytics for retention (42%)
  • On regional differences, Australian & New Zealand organisations show a strong interest in AI-driven recruitment tools and engagement platforms to address workforce challenges. Whereas in Southeast Asia, smaller organisations focus on learning platforms to enhance workforce agility. Global enterprises, meanwhile, face barriers like cost and data privacy concerns, alongside challenges in aligning tools across diverse markets.
  • 23% did cite Virtual and Augment reality for training as something to explore/adopt in 2025. More “classic” and staple technologies have slipped down the priority list, e.g. L&D platforms was cited by 34% of respondents. 

Respondents also cited that cost constraints/budgets could impede their efforts with adopting new technology. Additionally other challenges include skills available internally to implement new technology especially AI tools, change fatigue, competing priorities (and trying to engage the workforce in learning technologies), and linking new technology with current. 

The Other Findings 

Overall, 73% of respondents felt their organisations were somewhat prepared to meet talent management demands in 2025 (7.6% fully prepared and 19% Neutral or Somewhat Unprepared). For the most part, companies have a talent management strategy to execute, however they anticipate a few things can get in the way of their ability to deliver:

• Day-to-day demands of business taking time away from upskilling/development efforts
• Competing priorities of TM teams – hard to find time to train, to mature and to scale capabilities
• External issues and pressures (regulatory concerns, immigration policies impacting talent pools, etc.)
• Fast moving market and evolving skills – unlikely to ever be fully prepared (need to be responsive/flexible)

Our survey also offered some surprises. “Hot topics” in the current literature such as Remote & Hybrid Work Optimisation featured far lower on talent management priorities among our respondents (11.5% said this was Not Important, while only 7.6% felt it was either Critical or Very Important).    

Similarly, Diversity Equity Inclusiveness and Belonging as a topic did not feature as prominently as a priority (only 34.6% said it was Critical or Very Important). It would be interesting to consider whether this may be because it is now an accepted and expected part of the talent management conversation, or if resources and energy will indeed be moved away from this.

Looking Ahead: Beyond 2025

Our CPOs and HR leaders also offered their collective insights on the direction of Talent Management in the near future:

As we navigate the complexities of 2025 and beyond, talent management will be crucial for organisations. Our survey highlights the need for strategic, data-driven approaches to attract, engage, and retain top talent. Addressing skills shortages, enhancing employee well-being, fostering inclusive leadership, and embracing technological advancements present both challenges and opportunities. How do these insights align with your organisation’s goals?

At Odgers Berndtson, we help organisations thrive in this dynamic environment. We offer tailored solutions that align with your strategic goals, leveraging our industry expertise and extensive network to provide actionable insights and innovative strategies. Whether you need support in executive search, leadership development, or organisational transformation, our team is here to guide you.

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