The biggest risks to company culture in 2025

From “hushed hybrid” to labour constraints, three industry leaders reveal what they anticipate will be the key risks that will significantly impact company culture.

In conversation with HR leader Lana Johnston, the founder and CEO of Taking It Forward, Simone Gigg, the head of people and wellbeing at Hazelbrook Legal, and Tiffany Slater, the CEO and senior HR consultant at HR Tailor Made, shared their insights on the top risks poised to impact company culture in 2025. They also provided valuable guidance on addressing these challenges while fostering a positive and resilient organisational culture.

The cultural divide of ‘hushed hybrid’ work

Johnston believes that the growing issue of “hushed hybrid” work will have the most significant impact on company culture this year.

“The rise of ‘hushed hybrid’ – where employees quietly work more from home than policy permits – is creating a cultural divide that’s hard to ignore,” Johnston said.

This shift has created a cultural divide, with Johnston revealing how “office-based staff report feeling they carry a heavier load, while those workers mostly working from home feel unfairly judged despite maintaining productivity”.

Johnston advocated the importance of a nuanced approach, urging leaders to balance business needs with employee expectations rather than relying solely on one perspective.

“Leaders face a complex balancing act. They must support organisational needs for collaboration and culture building, while responding to employees’ demands for flexibility,” Johnston said.

To overcome this divide, Johnston suggests that leaders focus on creating “meaningful office experiences” that go “beyond policy enforcement”.

She proposes initiatives like “‘deep dive days’ where teams tackle complex problems together in person, or ‘connection days’ where there are regular team meetings and opportunities for relationship building”.

Johnston also noted that the most effective approach to addressing this challenge involves implementing “clear expectations, transparent reasoning for office requirements, and regular check-ins to assess what’s working and what isn’t”.

Losing the critical human element of HR through AI

As organisations increasingly rely on AI tools this year, Slater highlighted concerns regarding their potential impact on company culture, noting how these advancements may lead to the replacement of human resources professionals with software solutions.

“With the increasing reliance on AI tools, I fear companies failing to recognise the value of HR professionals will begin replacing them with software. In doing so, they risk losing the critical human element HR brings to the workplace,” Slater said.

While Slater highlighted how HR professionals are frequently perceived as the “big bad wolf” within organisations, she emphasised that their role encompasses a more profound purpose.

“HR can be seen as the ‘big bad wolf’ – sometimes deservedly so – effective HR professionals serve as the heart and conscience of an organisation, doing their best work when supporting the team.

“They help navigate workplace challenges, mediate conflicts, champion the growth and development of the workforce, and foster safe spaces for authenticity. They also ensure policies and practices support a culture where employees feel valued and motivated to stay and thrive,” Slater said.

As AI continues to advance within the current workplace, Slater expressed that while this technology offers numerous advantages, it fails to replicate the unique qualities that HR professionals attain.

“AI tools offer efficiency and automation but lack the empathy, nuance, and human connection a great HR professional provides. While technology can assist, it should never replace a human’s role in shaping a positive, people-centred workplace.

“AI should support HR teams by handling clerical and time-consuming tasks such as writing job descriptions and workplace policies, drafting emails, and generating ideas for annual strategic planning, to name a few,” Slater said.

Although she acknowledges that AI can potentially threaten company culture this year, Slater remains optimistic regarding its capacity to enhance the efficiency of HR and ultimately create more opportunities for meaningful human interactions.

“While I worry that the growing dependence on AI tools will pose a significant threat to company culture in 2025, I remain hopeful that AI will enhance HR’s efficiency, creating more opportunities for meaningful human connection,” Slater said.

Retention and recruitment in a tight labour market

Gigg anticipates that one of the most significant challenges companies will face this year in relation to company culture will be retaining top talent and recruiting new teams amid the increasingly competitive labour market.

“Retaining your strong performers while attracting more employees in a tight labour market can often put pressure on culture if HR and firm leaders are not careful,” Gigg said.

She explained that this is a critical issue, as the pressure to hire new employees often results in neglecting the needs of existing team members, which, over time, can lead to fatigue, frustration, and a decline in overall team morale.

“We can become so focused on finding new team members to fill the gaps that those picking up the slack can sometimes be overlooked.

“This can be detrimental to culture as a strong, happy culture can become tired, overworked, and mistrusting that new team members are coming,” Gigg said.

In the current tight labour market, it may be tempting to settle for candidates who are not the ideal fit. However, Gigg cautions against rushed recruitment processes, emphasising the importance of protecting and preserving company culture.

“However, it’s a balancing act – in a tight labour market, it can become tempting to take near enough is good enough when you are understaffed, and you’re seeking to ease the pressure on the existing team.

“However, as leaders know, it can do more harm than good, especially to your firm’s culture,” Gigg said.

“If you hire someone who isn’t the right fit, is not well suited to the role, or doesn’t have the right skill set, it can create more work for already stretched teams and more work for management as they spend time to train them up and then potentially have to move them on and start again.”

To navigate these challenges effectively, Gigg stressed how clear and open “communication is key” with the team throughout the recruitment process to maintain transparency.

“Keep the whole team informed about the recruitment, including the challenges, keep talking to your current performers, giving them regular feedback and breaks when needed.

“Encourage them to get involved in interviews and refer the role to contacts. Feeling they have an input keeps your current performers more engaged,” Gigg said.