2025: A make-or-break year for HR leaders

According to one expert, 2025 could be a make-or-break year for HR leaders across Australia, as new compliance regulations and technological advancements make the space more complex than ever.

Jarrod McGrath, author and chief executive of Australian HR tech consultancy Smart WFM, has shared some predictions for what 2025 may have in store for HR leaders across Australia, labelling it as a make-or-break year.

“From the 1st of January 2025, the game changes for one of multiple industries’ major industrial relations (IR) issues: wage theft and underpayment. Employers will be criminally penalised for intentional underpayments once the new year kicks in, meaning fines of up to three times the value of the underpayments, as well as potential jail time,” said McGrath.

“Candidly, it’s not an issue many employers or even HR teams have had as a top priority, despite the focus on the issue in recent years. It’s a challenge as it involves multiple teams across multiple disciplines – human resources, boards, IT, IR, accounting, and sometimes more. There’s a widespread lack of collaboration and leadership on the issue.”

Penalties for lack of compliance are indeed a headache for HR teams, yet nothing has been more talked about than the constant changes AI poses to the Australian business space. McGrath strongly claims that the right systems, data, and processes must be in place for AI to succeed as a tool for Aussie organisations.

“AI is bringing new hope for tech’s ability to solve our productivity woes. Unsure about how to use it but very clear that they should use it, many business, tech and people leaders are looking to deploy AI applications that will help them do more with less. But if we follow the same pattern we have with technology broadly, we’ll have the same issues.

“AI needs the right systems, data, processes, buy-in, training and – frankly – trust to succeed. Without these, it’ll just be another underutilised tool. This is already being demonstrated by new tech players entering the market in areas like compliance and what appear to be countless other niches popping up as a result of AI and the need to be more productive.

“AI can only learn from us at this stage – bad systems in, bad outcomes out,” said McGrath.

Doubling down on the AI discourse, McGrath believes we will reach the stage very soon where we see digital workers having a legitimate, entrenched role within an organisation, posing interesting questions.

“AI is not just going to start taking over processes within the workplace; I believe we’ll see full ‘digital workers’ and robots deployed into workforce teams across the country.

“We’ll reach a stage where we’ll be able to ask our digital worker team member about compliance, how to upskill, and how we can improve our experience, just as we might do with our human peers today.

“With these developments comes a major shift the HR and WFM industries need to consider – how do we measure and evaluate digital workers’ or AI’s performance? How will we structure performance reviews, set goals and KPIs, and monitor and measure improvements or deteriorations? A few outliers have already attempted this and been pressured to remove it. But this is delaying the inevitable,” said McGrath.