Zarah ChoudharyMore than four in five HR professionals said changes to National Insurance (NI) have negatively affected cost management and workforce planning, according to new research from elementsuite, a Zellis company.
The data, gathered from 490 UK HR professionals in the HR Ninjas community, revealed that 80.5% were feeling the pressure from NI changes, particularly in sectors such as retail, real estate and agriculture.
Alongside this, 62.5% reported that economic pressures, Government policy, and skills shortages have forced them to make moderate or significant shifts in hiring strategies.
Almost a third (31.3%) of respondents were expecting redundancies in 2025, with retail, education and restaurants among the sectors most likely to face job cuts.
However, smaller businesses with fewer than 50 employees appearred less exposed, with only 13.6% expecting workforce reductions.
Despite the difficult environment, 74.5% of HR professionals said they feel prepared to tackle economic challenges this year, and over half (50.3%) remained optimistic about the current business climate.
The research pointed to a profession that is moving beyond firefighting and taking on a more strategic role, with 72.5% of HR professionals saying their role has become more strategic over the past three years.
This shift is most pronounced in organisations with 1,000 to 4,999 employees, where 80% reported increased strategic focus.
Technology adoption is also accelerating.
Over half (53.1%) of HR teams are piloting or exploring artificial intelligence (AI) tools, and 17.9% are already using them.
Despite budget constraints, 20.4% of organisations planned to increase their HR tech spend in 2025.
Recruitment and retention remained ongoing challenges.
While 42.6% of organisations are confident in attracting top talent, only 21.8% said they have made improvements to staff turnover.
Cost-cutting remained the main strategy for 33.1% of businesses, particularly in sectors such as education, manufacturing and retail.
In contrast, growth-focused industries including IT and communications, utilities and professional services are prioritising innovation and expansion.
Employee wellbeing has emerged as the leading HR priority for 2025.
Some 43.5% of HR leaders said their organisations will increase investment in wellbeing initiatives, with education, hotels and financial services reporting the highest planned spend, at 55%, 55% and 54% respectively.
Equity, diversity and inclusion remained a focus for many, with 59% of HR professionals ranking it as a high or moderate priority, and the not-for-profit and public sectors showing the highest levels of commitment at 87% and 81%.
Lizzie Henson, founder of HR Ninjas, said: “HR as a function is nothing but resilient by nature.
“No matter what gets thrown in their way, we’ve seen time and time again how the HR community rolls up their sleeves, comes together, and figures it out.”
Victoria Beaven, HR Ninjas HRIS partner at elementsuite, added: “What I found most fascinating about the findings in this report, is that it’s a raw and honest reflection of the current reality of HR in 2025: balancing cost pressures with people priorities, navigating evolving government policies, and ensuring organisations remain agile in a constantly shifting landscape.
“But more than anything, it highlights the sheer grit and adaptability of HR teams across the UK”.
