If you told “2020 me” that we’d still be discussing how we work in 2025 (At home! In person! Both! At the same time!), I don’t think I would have believed you. That has to be resolved by then, right? But if you also told me we’d be on the precipice of uncovering the myriad ways AI could automate away many of the day-to-day tasks of People professionals, I don’t know if I would have believed the extent to which that’s happening today.

We recently surveyed BCV’s global community of People and Talent leaders to get their take on the state of People in 2025. Looking at the results, one thing in particular jumped out at us: The surfaced themes aren’t brand new, but the flavors of these themes look very different this year compared to past years.

We’ve heard “AI this, AI that” for the last two years, but 2025 is shaping up to be one where AI adoption actually gets traction within the People function. And long-standing hot topics like How We Work, Building Culture and Managing Performance and Compensation have a little bit of a different twist this year as companies navigate building organizations suitable for this next wave of (hopeful) growth.

1. AI Adoption

Unsurprisingly, AI Adoption is at the top of the agenda for People leaders across our portfolio, though admittedly most feel like they are still in early innings. The places where companies are getting wins starts with the low-hanging fruit: optimizing or replacing highly manual processes.

Laura Thiele, Chief People Officer at Optimizely, is leading the charge on developing a native AI tool to support previously analog People processes. In her words, “We will soon launch an HR Assistant that will answer basic employee questions related to HR programs and HR policies…[We] anticipate that it will reduce HR tickets and maximize client experience.”

One day soon, we’ll wonder how we ever lived without something like this. Gone is the world of searching on a company’s intranet to find your list of holidays or finding someone on the People team to ping about your leave policy. Employees want information how and when they need it — technology should meet them where they are.

That work feels like Step 1 of “AI in the People function,” but like AI in most functions, the possibilities are endless. And with those endless possibilities always comes some version of the question, “when will AI take my job?”

There was a time when writing a job description required 1) finding an old one you could tweak, 2) copying it and 3) spending hours trying to find creative ways to market the day-to-day tasks of a job. Although I have a bit of nostalgia for the days of using a thesaurus to find alternatives to “build” and “create,” those days are behind us.

In truth, 2025 begins an era where the best recruiters will be judged on how resourceful they were — not the amount of brute force they used–to get the job done.

2. How We Work

Hybrid work has been all the rage for the past few years, but 2024 began the headlines of big companies pushing their employees back to the office (with varying degrees of success, but that’s a topic for another time).

Lara Morgenthaler, Chief People Officer at ShipBob, puts it well: “This is an evolving subject for many companies, and it will likely continue to be a hot topic. All three models – fully remote, hybrid and fully in office – have merit and can be effective. The key to success is being honest with your leadership and your employees about why you are following a certain approach. Employees have a choice, and they will choose a company with a work model that aligns with their needs – and those needs will likely change! For ShipBob, we are in person in our warehouses, hybrid for our entry-level sales roles (helps drive learning and productivity in a tough role) and remote for all others. We are very clear about our ‘why’ and the expectations for each working model.”

Our survey results support this perspective. Within the group, 50 percent of organizations are hybrid, 30 percent are fully in-office, and 20 percent are fully remote. For the companies that are hybrid, most require somewhere between one and three days in the office every week.

When I led People at Navan, we hosted an annual company offsite which, at the time, seemed both natural for us as a company focused on building in-person connections, but also a luxury for a high-growth startup 4x-ing headcount in one year.

Flash forward to today, those all-company gatherings aren’t as unique across all sizes and stages. Seventy percent of our People leaders surveyed host an annual company-wide offsite and 80 percent host more frequent departmental offsites. Even if office time is down from years ago, IRL collaboration is very much alive and here to stay.

3. Building an Inclusive Culture

Culture is key to differentiation. It’s also complex to measure – especially when it comes to impact on business success and profit or ROI. The most obvious single “measure” of culture remains the same – eNPS via an engagement survey (average among our survey respondents was ~55), but companies are also looking for creative ways to measure inclusion.

According to Laura from Optimizely, “We take great pride in our recent Matthison scores that validate we are best in class in sustaining an inclusive culture. Through ERGs, Opti Gives Back and Women in Tech Events, we focus on attracting and retaining people that contribute their diverse thoughts and experience.”

Five years ago, DEIB initiatives were front and center at companies of all sizes. Today, companies are quietly (and some not-so-quietly) scaling back given limited resources. The challenge for People leaders in 2025 lies in building that inclusive culture employees are asking for without the same level of obvious rigor and investment in years past.

Given this, there’s huge value in making sure your inclusion strategy is really driven bottoms-up from your employees with top-down buy-in.

Lara from ShipBob talks about how this approach has worked for them: “We have taken an internally focused approach, relying on our values and employee led Culture Committees and ERGs, as well as senior leaders to build a culture of humility, resilience, creative problem solving, and safety that delivers on our value promise to our customers. We continue to get high marks from employees and candidates about how we live our values, especially around how leaders are open to new and different ideas. Employees take the lead in driving awareness and visibility into our efforts, with leadership reinforcing our values.”

4. Performance Culture & Compensation

It’s been an odd past few years to think about employee compensation. Companies are tightening their belts on cash to extend their runway. Down rounds are real and public markets are all but closed, making it harder for employees to accurately process the value of their equity.

But the show must go on and the data shows it has. According to the survey, 60 percent of companies surveyed maintained the same merit increase budget as last year (three to five percent of total compensation).

But at the same time, the new “flavor” of this topic going into 2025 is around an increased focus on pay-for-performance. More and more resources are being poured into retaining the best people vs. ensuring a broader group of employees receives “something” in exchange for good (but not great) work.

When I worked at MuleSoft, we took this premise seriously. When we did annual refresh grants, the sub-five percent of the company that received the top performance rating got 2.5+x the average refresh grant given to the cohort rated just below them. We put so many of our chips in the “top performer” basket because we believed those 10x employees were worth it (spoiler alert: they were).

Survey Says: Legacy priorities continue to evolve in 2025, but AI in People is now the hottest topic

“Make new friends, but keep the old” seems to be the theme for 2025. Embrace the new (AI), but don’t lose sight of the oldies-but-goodies (culture, compensation, and optimizing the ways we work). Maybe just change the lens you use to look at them this time around.

We’re in the earliest innings of AI in the People space and 2025 is likely to bring some real momentum around leveraging AI to support basic People processes and optimize recruiting flows, laying the foundation for 2026 and beyond. People leaders leaning into the change and seeking to reinvent themselves and their teams will no doubt be the ones who win in this next cycle.

Interested in BCV’s POV on People and Talent megatrends or learning how our team engages with the global community of People leaders? Reach out to my colleague, Megan Kageleiry, at mkageleiry@baincapital.com.