A growing, evolving APAC posits newer challenges for organisations to navigate. The changes in business, talent, and tech landscape puts HR leaders at the forefront of adopting innovative strategies to address emerging challenges and capitalize on opportunities that enhance business performance. To be successful in this dynamic ecosystem, HR needs to today build the right leaders, address the gaping skills gap, recreate EX strategy and ensure work structures keep up with employee demands.

The demand for these HR strategies today are driven primarily by two key forces.  

Speaking with Eugene Lam, SVP HR at ST Engineering, one of the biggest drivers of change today is the shifting geopolitical landscape. With the rise in focus of tariffs as an economic tool, the impact on the integrated economic system will be profound.

“The current geopolitical climate, especially US foreign policy, is a big unknown. Companies and countries may respond differently, impacting workforce strategy—whether it’s reorganization, shifting workforces, or adapting to new alliances," said Eugene, emphasising the uncertainty that companies across APAC— and specifically Southeast Asia — will experience in 2025.

The second key force of change is the advancements in the field of AI and its growing application across different HR and workflow systems. From smart automation to Agentic AI, it promises business and workforce transformation. But while adoption and implementation of AI varies across the region, Eugene highlights its potential to completely redefine work. "Traditional roles will evolve or disappear, but jobs won’t necessarily vanish. The question for HR is: What are the new value-creating roles? How do we prepare the workforce for them?" he adds, explaining the need for HR to be ahead of the curve, understanding how AI and technology will reshape their industry, workforce, and job roles.

These two key forces, in addition to region-specific demographic and talent shifts, are reshaping the world where HR leaders operate. We now look at strategies that will be necessary for HR in 2025. 

Strengthening leadership development and managerial support

Perhaps the most crucial way of dealing with a complex, uncertain business ecosystem is by having the right leaders in place. For companies across APAC developing effective leaders and managers remains a top priority. A Gartner survey reveals that 75% of HR leaders believe managers are overwhelmed, and 70% feel current leadership programs are inadequate for future needs. To address this, organisations are rethinking leadership development and focusing on equipping leaders with creative problem solving skills, resilience and an ability to harness the potential of technologies like AI and analytics better. Agile leadership has become crucial for companies to be successful.

“Being a business leader today is no longer just about commercial outcomes. Geopolitics and technological shifts are shaping workforce dynamics, and leaders need to be prepared for that reality’ explains Eugune adding it’s necessary to see “how many of our leaders truly understand AI, digital transformation, and their impact on work? HR has a big role in helping leaders bridge that knowledge gap.” 

Skilling, reskilling, and upskilling

The questions around skilling are more relevant than ever before. In APAC today around 7 in 10 companies state they are facing skills shortages. “The workforce needs to be future-ready, but that’s a big challenge. HR must continuously assess how market changes affect employee skills and capabilities,’ says Eugene, reflecting on how changing work reality and tech usage further accentuate business demands. “Industries are shifting. In engineering, for example, we’re moving from traditional vehicle maintenance to electric and autonomous technologies. How do we upskill workers for this new reality?”

The solution: focus must be on skilling, reskilling, and retooling employees to ensure they remain relevant in a rapidly changing work environment. Tools like skills intelligence provide a robust mechanism for HR leaders to track and deliver on business expectations. The use of GenAI and personalised learning programs will play a major role in equipping HR leaders to tackle the challenges of an evolving skills landscape. 

Navigating flexible work arrangements

The debate over flexible work arrangements continues in APAC, with varying approaches observed across different markets. In Australia, for instance, discussions around the feasibility of a four-day workweek are gaining traction, with companies like Medibank and Bunnings exploring this model to enhance work-life balance and productivity.

Conversely, some organizations are advocating for a return to traditional office settings to foster collaboration and mentorship, highlighting the need for a balanced approach that considers both organizational goals and employee preferences. With hybrid work also becoming a mainstay, HR leaders will have to take a proactive approach of finding the right balance between business demands of return to office and employee expectations around flexible work arrangements. 

Enhancing EX and engagement

“In uncertain times, HR must double down on employee experience—ensuring employees feel prepared for the future and have opportunities for mobility and development,” explains Eugene. To raise experience and engagement, HR will have to closely align personal aspiration to career growth opportunities. “Career paths are no longer linear. Employees today want options—lateral moves, skill diversification, and fulfillment beyond traditional hierarchies,” he adds.

The next is to listen to employees. With companies across APAC being at different stages of growth, workforce preference differs. For Eugene it's crucial that companies craft relevant initiatives and “employee needs vary across regions. A young workforce in Vietnam has different expectations from an aging workforce in Japan or Korea. HR must stay close to these evolving dynamics,” 

Optimising HR technology usage

Leveraging technology is transforming HR operations. The integration of AI and People Analytics enables data-driven decision-making, enhancing employee retention and satisfaction. These technologies allow for personalized employee experiences and proactive management of potential turnover, even addressing skill gaps that many across APAC face today.

"HR needs better analytics to drive decision-making. Without solid data, how do we know what workforce challenges are emerging or where talent gaps exist?” explains Eugene. WIth the talent and business landscapes becoming more complicated, it’s necessary for HR to leverage newer technologies but also go back to core problem statements that it wants to solve. Experimentation with latest developments in AI and predictive analytics gives HR— and by extension the companies— a competitive advantage which will play a crucial role in 2025. 

Outlook for 2025

2025 is going to witness rapid shifts across the geopolitical, demographic, and technological landscape. Growing threats of tariffs, advancements in AI that are predicted to reshape the connection between employees and their work, climate change, all today force companies to think beyond their day-to-day work. For HR leaders implementing future-ready strategies around skilling, leadership development, tech usage and EX design will play a critical role in ensuring they are ahead of the curve.