With people leaders looking to leverage AI and data analytics to boost talent development and retention in the new year, research shows they must first improve their existing data and technology skills.
By Maggie Mancini
Amid continued economic pressures, HR teams are increasingly challenged to develop internal talent pipelines, retain employees, and manage labor costs, according to a preview of McLean & Company’s HR Trends Report. The report finds that just 29% of HR organizations are effective at facilitating data-driven people decisions, with respondents reporting that their proficiency in data and technology skills is lacking.
Still, HR plays a key role in advancing AI as businesses turn to 2025. With AI and its impact accelerating at an unprecedented rate, HR has a significant role to play in organizational technology enablement. While 42% of HR respondents say they currently use AI, only 7% report that their HR organization has a formal, documented AI strategy that is broadly communicated and is the main driver for relevant initiatives. HR plays a key role in helping the organization adopt AI, but HR’s effectiveness in technology enablement remains low, ranking last across the strategic skills and competencies surveyed.
The report finds that HR’s ability to play a role in the selection, implementation, and use of AI will be critical in enabling business success. While effective in this, they are also four times more likely to be highly effective at enabling the organization’s adoption of new technology, which will be a key element for long-term success as the future of work continues to trend toward rapid change and advancement.
“As we move into 2025, HR must insert itself into the AI conversation,” says Will Howard, practice lead, HR research and advisory services at McLean & Company. “When HR partners with the organization in its AI strategy, they are almost 12 times more likely to be at the most advanced levels of AI maturity and transformation.”
Howard explains that this may be due to HR’s ability to implement change management strategies to help with the adoption of AI, assess and close skills gaps to prepare the organization to use AI, and anticipate the challenges that may arise.
“On the flip side, HR also needs to work on its own technology and data skills to make even more progress. AI use is still low within HR itself, and the top two barriers to HR not using AI are lack of expertise within HR as well as HR’s lack of understanding of capabilities and benefits. HR needs to improve its data and technology skills to go beyond just supporting the rest of the organization and start taking advantage of AI itself.”
In addition to improving AI and data skills in 2025, the report finds that the role of leadership will continue to evolve. Effective leaders who possess the skills and competencies to help others thrive in today’s increasingly tech-focused environment are of critical importance for organizations, with 73% of leaders indicating they feel their skill sets—particularly relating to technology and data analytics—will need to change to adapt to the future of work. Failing to effectively develop leaders risks decreased organizational performance.
At the same time, holistic well-being is at the forefront of HR strategy going into the new year. As the environment increasingly impacts employees’ lives at work and at home, organizations are called to play a role in supporting holistic well-being. The report finds that economic uncertainty puts pressure on workers, but organizational investments in financial well-being are falling short.
Though 70% of respondents reported economic stability as the largest threat to the well-being of their workforce, financial well-being ranked last. And data analytics play a key role here, too—research from Optum finds that just 42% of organizations are highly effective at leveraging data to manage their wellness programs.
In 2025, HR’s key strategic contribution will be driving talent development and retention, the report finds. To harness the benefits of AI advancement and data analytics to improve employee development and boost retention, improving these competencies is essential.
