This article was first published in the Irish Examiner on Friday 17 January 2025.
Employers will need to embrace change in 2025 as they seek to attract and retain talent within Ireland’s increasingly competitive and diverse workforce.
Mairéad O’Mahony, head of human capital at professional services firm Aon Ireland, says that as businesses face heightened volatility in 2025, their success will depend on the strength and agility of their workforce to navigate the challenges ahead.
In this Q&A interview, she looks at the vital role that business and HR leaders will play in managing the pay expectations of employees, while also ensuring the smooth rollout of the EU’s pay transparency directive, pensions auto-enrolment and other changes on the horizon for Ireland’s workforce.
What are the most immediate priorities for business leaders in 2025?
It is crucial that leaders move quickly in preparing their workforce for the evolving people landscape of 2025. Employers who embrace change with agility, authenticity, and foresight will unlock the full potential of their people, driving sustainable growth and success.
Organisations are only as strong as their people. From attracting talent in a competitive labour market to the introduction of landmark new legislation around pay equity and pension auto-enrolment, employers across Ireland are facing mounting pressures from all sides.
Taking the right steps to develop a resilient and high-performing workforce is critical to successfully embracing these changes and unlocking business growth in the months ahead.
To support leaders in 2025, we’ve outlined some of the key workforce-related challenges over the months ahead. By identifying challenges and changes on the horizon business and HR leaders in Ireland can make better decisions as they build an agile workforce fit for the future.
What can employers do to attract and retain top talent?
With the unemployment rate forecast to remain close to record lows in 2025, employers look set to continue navigating a highly competitive market for talent over the months ahead. This tight labour market presents challenges for many businesses in attracting and retaining the high calibre talent to meet their skills needs.
Successfully recruiting early career talent will be a strategic imperative in 2025. Winning over this cohort of jobseekers will require employers to be authentic, digitally prepared, and more proactive than ever before. Demonstrating investment in young talent is key to appealing to high-potential employees.
In an age of disruption, it is more important than ever that employers make sure that this talent also has the future skills to thrive in a dynamic business environment. By identifying and cultivating the workforce skills that are critical to an organisation’s ongoing success, leaders can empower their workforce to operate in a more agile and resilient way and better manage change at scale.
In what ways are workforce expectations likely to change this year?
The demographics of the workforce look set to continue evolving in 2025, with an increasingly multi-generational workforce taking shape in many businesses.
Shifting employee expectations around flexibility, compensation and benefits will put increased pressure on employers over the coming months.
In 2025, businesses should consider how their talent strategies meet evolving professional preferences and needs. A competitive base salary is a fundamental pillar in an organisation’s talent offering in the context of an elevated cost of living. The availability of flexible working arrangements also continues to rise up the employee agenda, with recent research indicating that nearly half of professionals would turn down job opportunities that do not offer hybrid or remote working.
Will the introduction of pensions auto-enrolment be challenging?
The implementation of a long-awaited pension auto-enrolment system in September 2025 presents a unique opportunity to enhance the financial resilience of Ireland’s workforce.
While the introduction of the scheme is a landmark moment in pension reform that will bring 800,000 new savers into the pension safety net, many organisations will need to take significant action across payroll, people and processes to prepare for the seismic change ahead.
Aon’s Pension Auto Enrolment report shows that 67% of businesses in Ireland have concerns about the introduction of the new system, primarily around the increased costs and complexities of the new scheme.
The most important step that employers can take is to seek professional advice about the new scheme in the context of their own specific circumstances to understand fully its likely impacts and benefits. This will be particularly important for employers who wish to avoid the necessity of running two schemes — occupational and auto-enrolment — in parallel to each other.
Taking action today to prepare for these complex changes will be crucial to ensure their business can harness the opportunity ahead and deliver better outcomes for their people in 2025 and beyond.
Are businesses in Ireland ready for pay transparency?
With the countdown to the introduction of the EU’s pay transparency directive accelerating, a dedicated programme of change will be required for many companies to address the root causes of pay gaps in 2025.
This landmark set of rules will help to create a more equitable pay landscape across Irish businesses and help close the gender pay gap in Ireland which currently stands at 11.3%.
Given the complexity of the legislation and its wide-ranging impact across legal, finance, and HR, employers will need to kick-start a multi-year programme of change. Acting now can and will ensure that employers successfully transform critical people policies and procedures and make the most of this opportunity for their entire workforce.
How will rising costs for staff healthcare and benefits impact employers?
As business costs look set to continue rising in 2025, employers will need to consider how best to manage the increased costs of employee healthcare and benefits. Research shows that employers have dealt with up to 20% increases in employee health insurance plans over the past year with further rises expected over the next 12 months.
To keep costs in check and provide competitive health and benefits to employees, companies will need to reduce ineffective spend through value-based strategies. More flexible and online-based models are an important component that can help mitigate the impact of rising costs and personalise benefits to meet the needs of the workforce over the coming months.
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