Embracing transformation in 2025
As the realities of 2025 continue to unfold, the narrative has become more complex. While markets are soft, real opportunities are emerging with AI. Vast enterprise transformations are underway but remain largely in the pilot phase. Transformation winners will be those that can scale AI for lasting impact, embed continuous transformation into a new operating model, treat intelligence as a foundational backbone and bridge the employee-trust gap through experience-centric design.
Transformation isn’t about launching tools.
Transformation is a mindset.
To help organizations achieve sustainable transformation, Mercer recommends seven priorities for intentional focus in 2025 and beyond.
1. AI for HR — Impact, but scale it
Why this matters in 2025:
AI is a practical tool for driving efficiency and liberating HR teams from administrative burdens. Conversations are moving past curiosity to governance, capability-building and performance pressure. Enterprises are no longer experimenting. They’re being asked to prove value, avoid risk and rewire work.
- 1 What good looks like:
- 2 Questions to ask yourself:
- AI is embedded into daily HR workflows (e.g., case management, scheduling, policy answers).
- Generative AI supports content creation, communications and knowledge curation.
- Predictive models drive proactive talent and risk decisions.
- Are we still treating AI as a side experiment, or is it embedded into how HR operates?
- Have we identified the highest-friction areas where AI could deliver real value?
- Are we enabling our people to trust AI tools and use them confidently in their daily work?
2. HR tech stack — Helping or hindering?
Why this matters in 2025:
Complexity kills value. Most organizations over-invest in fragmented or poorly deployed systems. Doing more with less isn’t just about cost savings; it’s about delivering real value and making an impact. That’s what your infrastructure needs to support.
Learn how to design your HR technology ecosystem to support continuous change, enable decisions and deliver connected experiences across the enterprise.
- 1 What good looks like:
- 2 Questions to ask yourself:
- You have rationalized systems with clear ROI and adoption metrics.
- User experiences are streamlined to minimize friction.
- You proactively identify gaps that could hinder AI integration and advanced capabilities.
- Connected tools talk to each other, reducing manual effort and letting data flow.
- Is our HR tech strategy engaging or enraging employees?
- Which tools are mission-critical versus legacy baggage?
- Are we forcing user adoption, or is the tech supporting human adaptation?
- How are we governing our tech landscape to drive value — not just manage vendors?
3. Skills intelligence as the new operating system
Why this matters in 2025:
Thanks in part to AI, jobs are changing too rapidly to rely on fixed organizational charts and job profiles. In 2025, everything should be dynamic, adaptable and fluid. If it’s static, it’s stagnant, which is on the way to becoming obsolete.
Skills have become the basis for understanding how best to deploy talent (supply) to meet business needs (demand). A skills-powered organization can redeploy talent and teams more effectively, guide intelligent learning, and quickly respond to changes in the environment.
- 1 What good looks like:
- 2 Questions to ask yourself:
- Real-time skills inventory spans the enterprise.
- Learning, recruiting, and talent mobility align with current and future skill needs.
- An internal talent marketplace helps unlock untapped potential.
- Do we have visibility into our workforce’s actual and desired skills?
- Can we “see” hidden talent?
- Are we designing work and career paths around evolving skills?
- How are we using skills data to inform workforce and business strategy?
4. Designing employee experience for the now of work
Why this matters in 2025:
Employee expectations are shaped by consumer experiences. A seamless, personalized digital experience is now a top driver of retention, engagement and productivity. Digital workforce experience isn’t just about moments that matter. When it comes to our everyday work experience, every moment matters. Communication, connection and clarity are as important as white glove experiences. It’s 2025 outside work; what year does it feel like inside work?
- 1 What good looks like:
- 2 Questions to ask yourself:
- You’re leveraging end-to-end journey mapping to pinpoint real friction points.
- Human-centered design is applied to onboarding, mobility and well-being.
- Real-time feedback and experience metrics guide continuous improvement.
- Where do our people experience the most friction? Do we think we know, or do we actually know?
- Are we intentionally designing experiences that feel human, not transactional?
- How do we measure and act on employee experience data?
5. Reimagining the HR operating system
Why this matters in 2025:
The old HR operating model wasn’t built for now, let alone next. It was built for compliance, not innovation. It was built for control, not co-creation.
To meet today’s demands, HR needs a new engine — one built for speed, collaboration and flexibility. Everything about work has changed, so HR needs to change how it delivers value. Redesigning the HR operating system will unlock new capabilities, not just for HR but for the workforce and the entire enterprise.
- 1 What good looks like:
- 2 Questions to ask yourself:
- Teams are organized by value streams and business outcomes.
- Capability models include tech, data and change fluency.
- Agile operating rhythms and faster decision-making structures are in place for risk awareness and resilience.
- Is our HR function structured to solve problems or run processes?
- How quickly can we shift priorities in response to business needs?
- Do our HR teams have the capabilities needed to lead in a digital world?
6. From projects to programs — Deploy for value, not just go-live
Why this matters in 2025:
Go-live is not the goal — behavior change is. We call this “go begin.”
Sustained adoption and ongoing optimization define success and deliver business impact. Too many organizations (67%, in fact) implement technologies without changing how they work. Technology isn’t the same as transformation, and digital isn’t the same as technology. Digital is a mindset, transformation is a capability, and technology is the means to scale and measure value.
- 1 What good looks like:
- 2 Questions to ask yourself:
- Deployment plans extend beyond launch to include enablement, continuous improvement and feedback.
- Success metrics are tied to behavior change and business impact, not technology and program go-lives.
- The focus is on co-created, user-centered design and rollout.
- Are we measuring deployment success by outcomes, not timelines?
- How are we supporting users beyond go-live?
- What’s our plan to track, evolve and scale adoption?
7. Transformation as a service — Building change muscle
Why this matters in 2025:
Transformation isn’t done in a sprint, a project or a technology implementation. It’s a business capability to be built and trained like muscle. Organizations that operationalize transformation — like a service — will adapt faster, avoid burnout and unlock continuous improvement.
HR transformation must shift from projects with completion milestones to programs focused on long-term value realization.
- 1 What good looks like:
- 2 Questions to ask yourself:
- You have standing transformation offices or agile change functions.
- Change resilience is actively measured and managed as part of organizational culture.
- Sequenced initiatives reduce overload and increase readiness.
- Is our organization designed to handle continuous transformation?
- Are we overloading our people with uncoordinated change?
- How are we building leadership and team capacity for sustainable change?
Now of Work takeaway:
The now of work is no longer about launching tools; it’s about fostering a digital mindset. Organizations that embed transformation as a core operational capability powered by AI, skills and change capacity will win this half of the year and define the next.
Talk to Mercer to see how your transformation roadmap stacks up in the now of work.
