2. Structural Agility Is Redefining How HR, Finance, and IT Work Together
As pressure mounts for businesses to innovate, well-designed people systems have become the foundation for how innovation happens. HR has always played a central role in this effort — but today, that role is becoming more operational, cross-functional, and strategic.
As the backbone of business operations, HR is being propelled into new cross-functional territory.
According to a 2025 report from Deloitte, the number of unique skills expected of CHROs rose 23% between 2018 and 2024, with demand for financial experience rising 34%.
This shift isn’t just playing out in job titles or skills — it’s changing how organizations design the structure of their people systems. Biotech company Moderna, for example, opted to merge its HR and IT departments to integrate emerging tech into the employee experience.
The move underscores that when all people systems are designed to work as one, it can become an innovation driver. Enabling this starts with reimagining HR as function-agnostic — embedded across the business and evolving beyond departmental silos.
Build greater cross-functional agility by:
- Centralizing data flow and insights across HR, IT, finance, and other departments to create a unified, real-time view of key workforce, business, and operational metrics.
- Provisioning shared access to key people, systems, and platforms to enable more efficient collaboration and eliminate rework.
- Establishing joint decision-making processes to evaluate people-focused business decisions together across departments, rather than in separate reviews.
- Redesigning HR roles to be more function-agnostic and embedded within broader teams and business processes.
3. Succession Planning Is Evolving Beyond the Traditional Career Ladder
The demographic clock has been ticking for a while. As Baby Boomers start to age out of the workforce and elder Gen Zs find their feet on the career ladder towards their first management roles, the race is on for HR to fix the leaky leadership pipeline before it trickles dry.
And HR leaders are definitely feeling that pressure: Leader and manager development is the number one priority globally for the third year in a row, according to 2024 Gartner data.
But as with every generation, there’s a catch. With a strong preference for flexibility and work-life balance, Gen Z is finding alternative paths to career success — often in gig work, or roles that prioritize autonomy over advancement.
As a result, Gen Z employee retention is far lower than that of senior peers, with only 6% of Gen Z employees saying their primary career goal is to reach a leadership position, according to 2025 Deloitte data.
While they may not be in a rush to climb the career ladder, Gen Z employees appear seriously invested in growth and development. Innovating learning design that leads to leadership hinges on seeing it as a continuous process.
Invest in emerging leaders by:
- Identify and prioritize a pipeline of leadership skills that are critical to future business success and innovation to increase workforce adaptability — rather than taking a role-based approach.
- Use predictive analytics with employee lifecycle data and succession planning to identify top-performers and high-potential employees early.
- Focus on continuous talent development and regular skills assessments in the leadership track that align with business needs.
- Balance employee future skills needs alongside growth opportunities that your employees find meaningful to their career aspirations.
4. Employee Well-being is About Work Design, Not Perks
When your employees are well, your business is too. But in 2025 and beyond, meaningfully supporting employee well-being requires more than a health package and a few gym membership perks — it’s a system design issue.
Results from Paylocity’s benefits survey revealed that that 82% of employees would consider leaving their job, citing burnout as a top reason why.
The most innovative organizations aren’t responding to this risk with surface-level fixes. They’re integrating well-being into the fabric of how they work, and redesigning work to address the root causes of poor employee well-being so they can keep their people focused, motivated, and healthy. This repositions well-being from just a benefit to a performance driver for the whole business.
Understanding the intersection between well-being and performance means asking better questions about how it connects to the core of your business success.
Reflect on how your employees’ well-being drives organizational outcomes:
- How does positive employee well-being advance our strategic goals?
- How are we measuring employee well-being across the organization?
- Where do our processes and systems create friction for employees — and what’s the cost in productivity, performance, or retention?
- What patterns in how we work — such as meeting patterns or flexibility norms — consistently undermine well-being?
- How much ownership do teams have to govern and manage their own well-being?
Turning HR Innovation into a Competitive Advantage
At its heart, HR innovation doesn’t look like following the latest tech trends or jumping on every emerging bandwagon. It’s a long-term transformation — one that hinges on adaptability, systems built to flex, and an organization-wide appetite for change.
Some fixes are complex. But others might be as simple as rethinking how teams stay connected, or giving employees access to the tools that help them work more efficiently.
And when done well, innovation delivers tangible results — stronger culture, lower turnover, and measurable business impact that primes both the organization and its employees to perform at their best.
Paylocity helps HR teams scale their innovative impact through connected systems, integrated insights, and the power to design people strategies that deliver real business outcomes.
See what that looks like in practice — or request a demo.
