Accenture reports that the rate of change in businesses has accelerated 183% since 2019, with a 33% rise in the past year alone. This evolution is faster than ever before and shows no signs of slowing down.
Factors like hybrid workplaces, increased polarization, global conflicts, and AI transformation have contributed. With all this change, it’s no wonder many leaders are feeling overwhelmed. In fact, 71% of CEOs report experiencing imposter syndrome, in part because they’re facing challenges they haven’t been trained to handle.
With such rapid changes in the business world, which issues are likely to become prominent for leaders in 2025? David Rock, Ph.D., CEO of the NeuroLeadership Institute, recently wrote in Fast Company about four trends to keep an eye on in 2025.
1. Investments in DEI will keep increasing – but under different names
With Donald Trump recently elected as U.S. President, there are growing concerns that diversity, equity, and inclusion (DEI) initiatives might face even greater scrutiny than they did after the 2023 Supreme Court ruling on affirmative action.
While these concerns are understandable, it’s noteworthy that most organizations did not significantly cut their DEI budgets in response to the Supreme Court decision. According to a 2024 Littler survey, 57% of executives reported that their organizations increased their DEI commitments, 36% maintained their efforts, and only 1% noted a significant decrease. Although DEI spending isn’t growing as rapidly as it did in 2020, it continues to rise.
Due to legal and political pressures, many companies that are maintaining or expanding their DEI efforts have started using different terminology, such as “inclusive leadership” or simply “good leadership.” We anticipate this trend will grow in 2025, with DEI becoming an integral part of leadership rather than being seen as a separate initiative.
By adopting a science-based approach, organizations can develop DEI programs that are legally compliant, strategically advantageous, and ethically sound.
2. Companies will decide on hybrid work
Recently, several major organizations have announced that their employees will soon be required to return to the office five days a week. In the third quarter of 2024, 33% of companies mandated a full-time office presence, up from 31% in the second quarter. This marks the end of a five-quarter trend of declining in-office requirements.
We believe 2025 will be a pivotal year for companies to make definitive decisions about hybrid work. After five years of experimenting with flexible remote policies, many organizations will commit to their preferred work arrangements and face the consequences.
While returning to the office full-time might seem logical, research highlights the benefits of a hybrid model. For instance, a 2024 study in the journal Nature found that hybrid work at the travel company Trip.com did not compromise productivity or performance but did reduce the quit rate by one-third, saving millions of dollars on recruitment and training.
Our findings suggest that while in-person interactions among colleagues may increase when everyone is in the office, other connections — such as those with leaders, employers, and roles — can weaken, potentially causing return-to-office policies to fail. Therefore, we recommend what we call the Patchwork Principle, a four-part strategy for hybrid work that maximizes the advantages of in-person time while maintaining employees’ sense of autonomy.
3. Leaders will be more cautious toward AI
The initial phase of GenAI implementation was marked by widespread excitement and anticipation. Leaders saw it as a chance to transform their businesses by automating repetitive tasks, providing data-driven insights, enhancing efficiency, and fostering innovation. During the second phase, they began experimenting with GenAI and integrating it within their organizations.
Now, in the third phase, leaders are encountering both challenges and opportunities with the technology and are strategizing their next steps. Issues such as AI hallucinations and biases have emerged. Additionally, there’s a growing awareness of the risks of overreliance on GenAI and the necessity to train employees in critical thinking.
We’re discovering that GenAI can either enhance or hinder creativity, depending on its use, which has significant implications for innovation. A recent study revealed that while GenAI boosted creativity in writing short stories for those who struggle with it, it also reduced the diversity of new ideas. This means GenAI-assisted stories were more alike compared to those created solely by humans.
Furthermore, overdependence on AI can inhibit personal insights. Research on the brain’s insight generation process shows that the strength of an insight is linked to the motivation to act on it. Therefore, if AI generates insights for us, it deprives us of a crucial source of motivation.
In 2025, leaders will likely take a step back and approach AI with greater caution, aiming to use the technology to enhance human creativity and make the workplace more human-centric.
4. Civility will be prioritized
Following a contentious U.S. election, leaders are recognizing the urgent need to address the rising tide of workplace incivility. The Society for Human Resource Management (SHRM) estimates that incivility costs U.S. organizations $2 billion per day. “On average, after experiencing an act of incivility at work, it takes an individual 31 minutes to recover, impacting productivity,” said Johnny C. Taylor, Jr., CEO of SHRM.
We define workplace civility as a set of shared everyday behaviors that include politeness and respect for others. Civility is shown through manners, courtesy, and an awareness of the rights, concerns, and feelings of others. While we may not agree with our colleagues on every issue, we must express our opinions and acknowledge others’ views respectfully.
In 2025, leaders will emphasize the importance of civility. Our research recommends cultivating three habits of civility: 1) noticing our reactions, 2) inhibiting automatic responses, and 3) communicating clearly. These habits help employees engage their thinking brains and communicate more constructively during conflicts.
Amid rapid changes in all aspects of life, leaders must focus on the most critical issues for their organizations. By prioritizing and deeply considering these issues, leaders can turn challenges into opportunities.A version of this article appeared in Fast Company. To read the full article, click here.
