HR in 2025: Policy changes and priority areas for employers

Here we share insights into key policy changes that may impact your business’ HR priorities this year.

Employment Rights Bill

In 2024, we saw major changes to the Employment Rights Bill, the most significant upgrade in worker’s rights in a generation.

The reforms include:

• Ending exploitative zero-hours contracts.
• Limiting fire and rehire practice.
• Statutory sick pay.
• Paternity and parental leave.
• Increased protection from unfair dismissal.

Learn more about the changes announced in the bill here.

Mental Health

In 2023, 87% of employees said they felt a sense of work-related dread at least once a month, with nearly half (49%) saying they feel a sense of dread at least once a week.

Here are Headspace’s top five actions to reduce dread for both you and your team:

• Clearly outline responsibilities and allow for flexibility to create a more positive work environment.
• Consistently communicate “The Why.”
• Practice “Ruthless Prioritisation.”
• Focus on what you can control.
• Daily self-compassion and reflection.

Some of the ways we are prioritising our teams mental wellbeing include:

• Having three fully trained mental health first aiders available for our team.
• Opening our office wellbeing room for relaxation, privacy and meditation.
• Quarterly Wellbeing Workshops with WorkLifeWell.
• Number scoring system.
• Access to Health Care Cash Plans.

Inclusion and Diversity

According to a CIPD report, SMEs are less likely than larger organisations to have an I&D strategy and action plan or be proactive in their I&D approach. They are also less likely to have a five-year plan which has a focus on different areas across I&D. Micro (one–nine people) and small businesses (10–49 people) are less likely than medium-sized (50–249 people) and large organisations to use most of the recruitment practices that can help support I&D.

Simple practices to implement:

• Use structured or standardised interview questions.
• Ensure that all involved in recruiting follow objective assessments and scoring criteria.
• Explain expectations about inclusive behaviour when onboarding employees.
• Review job descriptions to accurately reflect the requirements of the job.

Only a minority of micro and small businesses said they train managers to manage people in a fair and inclusive way, it was also noted there was a lack of education around inclusive leadership.

Other practices to consider include:

• Gender neutral bathrooms to allow everyone to feel comfortable using the facilities.
• Gender neutral language in your dress code policy.
• Keep records of chosen names and correct pronouns.
• Encourage name badges and email signatures to display any relevant information.
• Invest in training programs and ensure your employee handbook content is up to date and mindful of the above.

Neurodiversity

Why make changes?

Employees may not choose to disclose (or be aware) they are neurodivergent. It is widely accepted that neuraminates represent in total a large percentage of the overall population, likely greater than 10%. ‘We need to admit that there is no standard brain,’ wrote Thomas Armstrong in his pivotal work The Power of Neurodiversity. The term neurodiversity refers to the infinite range of differences in individual human brain function and behavioural traits. Neurodiverse people can bring unique and valuable strengths to their work and managing with neurodivergent people in mind is likely to benefit the whole team.

Managing with Neurodiversity in mind – here are some things to consider:

• When introducing tasks ensure that communication is clear and easy to comprehend.
• Look to be flexible to an individual’s needs where possible.
• Regularly provide structured and constructive feedback.
• Introduce change sensitively and within a reasonable time frame.
• Provide and raise awareness of any support and pastoral care.

Flexible working

Post-pandemic working arrangements continue to be a hot topic, at times causing contention between employees and employers. People Management reports that a recent poll found that 60% of UK workers would like more flexibility as to when they work, and 75% of respondents said flexible working was the most important benefit. Global figures show that employees only spend an average of 1.4 days a week in the office. Prior to the pandemic, employees were in the office an average of 4 days a week in the UK. There is no automatic right for flexible working to be granted, you can decline the request providing the reason falls into at least one of the following categories:

• The burden of additional costs.
• Detrimental effect on the ability to meet customer demand.
• Inability to reorganise work among existing employees.
• Inability to recruit additional employees.
• Detrimental impact on quality.
• Detrimental impact on performance.
• Insufficient work during the periods that the employee proposes to work.
• Planned changes in the business

Like anything, there are pros and cons. Issues such as measuring productivity and fostering a culture of innovation are often mentioned by employers. It might take some creativity to overcome these and to change the way we work. The risk of not moving with the times is that we become a less attractive prospect to jobseekers.

Supporting new mothers at work

1 in 10 working mothers leave their jobs due to childcare pressures. Only one-third of working mothers have access to the flexible working arrangements they need and working mothers are 1.4 times more likely to feel the financial burden of childcare costs compared to working fathers.

How can we help?

Have a clear policy framework and decide how you will share this with management, parents and those hoping to become parents.

• Use data to understand your retention, training and promotion of employees after they have taken maternity, paternity or parental leave;
• Embed flexible working options.
• Champion affordable childcare.
• Support paternity and parental leave to champion sharing of childcare responsibilities.

The importance of “right to work” checks

To comply with obligations to prevent illegal working, an employer must carry out “right to work” checks on all prospective employees before the employment starts, as well as conducting follow-up checks on employees who have a time-limited permission to live and work in the UK (and keeping records of all the checks carried out). The maximum civil penalty that an employer currently faces is £20,000 for each individual who does not have the right to work. In August 2023, the Home Office announced that in 2024, the maximum civil penalty will be tripled to £60,000 per illegal worker.

Menopause in the workplace

The Equality and Human Rights Commission has published guidance for employers on menopause in the workplace. The guidance explains what menopause and perimenopause is and how the associated symptoms can negatively impact a worker. It also summarises an employer’s legal obligations under the Equality Act 2010, provides examples of suggested workplace adjustments and gives guidance on having conversations about menopause.

New sexual harassment rules

The Equality Act harassment provisions were amended in October 2024 as follows:

• Introduction of a specific duty on employers to take reasonable steps to prevent sexual harassment of their employees.
• Give employment tribunals the power to uplift sexual harassment compensation by up to 25% where an employer is found to have breached the new duty to prevent sexual harassment.

It’s important to remember that employers can be held responsible for harassment in the workplace that is related to any protected characteristic.

National Minimum Wage and Statutory Payment Increases for 2025-2026 announced

Statutory payment rates are set to increase in April as follows:

• National Living Wage (NLW) (21 and over): £12.21 (6.7% increase).
• 18-20 year old rate: £10.00 (16.3% increase).
• 16-17 year old rate: £7.55 (18% increase).
• Apprentice rate (aged under 19 or in first year): £7.55 (18% increase).
• Accommodation offset: £10.66 (6.7% increase).
• SSP £118.75 per week.
• SMP and SPP £187.18 per week.

Our partnership with NatWest Mentor

We offer a range of HR consultancy services to ensure business owners are fully compliant with employment law and health and safety obligations. Our services also ease the burden of people management, recruitment and admin overload. For any queries please contact our HR Manager – Sabah Rafiq. 

As part of our partnership with NatWest Mentor, we are also able to offer you access to an online HR management tool, Mentor Digital, free of charge. Register for Mentor Digital here.

If you would like further advice on your 2025 HR strategy, contact us today.