How much have economic pressures affected your HR budgets for the year ahead?

Published in January 2025, Fosway’s HR Realities research looks at the challenges, strategies and priorities of HR leaders in the business world – here Fosway analysts look at the trends in budgeting and investment aims of HR teams.

Economic pressures continue to bite into HR budgets

In an almost identical pattern to 2023, economic headwinds continue to bite with 75% of HR professionals reporting that the economy had put their HR budgets under pressure, and there seems to be little immediate prospect of that situation changing. The need to do more with less or the same appears to have become entrenched in today’s HR team and that is sending out ripples of disruption.

Organisational agility and enabling strategic workforce planning leads HR’s systems investment priorities

There isn’t an area of HR technology that doesn’t show some positive momentum, but some are trending more strongly than others.

Learning, skills, strategic workforce planning, analytics and workforce intelligence are top of mind in HR teams’ investment in 2025. Reading between the lines, there is clearly a fresh impetus behind enabling agile organisations, based on the people skills and capabilities that power success in the future. And these themes look like the growth areas of the HR systems market over 2025, enabled with AI.

Understanding where organisations are today with future resilience through skills and having workforce intelligence about what sorts of skills and engagement underpin that, is a significant part of the story for HR in the coming years. It is not enough to operate on intuition and guess work. Data and strategic people intelligence is critical to helping guide organisations in an unpredictable and high change world.

So, it’s important not to simply see them as separate functionalities, but a connected chain of decision making – which leverages data and market and people intelligence to help organisations and individuals to think about how they best execute future business strategies.

This is an excerpt from the Fosway’s HR Realities research 2024. Get the full insight and discover all the latest market and solution trends by viewing all the infographics here.

What should you do next?

• How will future AI developments affect your HR investment challenges? Take part in Fosway’s strategic project for 2025: ‘AI in HR’.
• How do you validate your vendor options as a HR leader? Read the latest 9-Grid^TM for Cloud HR report.

Other recommended reading

• Other Fosway research related to Cloud HCM and HR strategy.
• Underinvesting in skills and people development is killing your organisation.

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