04/11/2025
Recruiting enough qualified workers, retaining existing talent, and managing rising costs are among the biggest challenges facing UK organisations right now, according to new research by HR and payroll software provider Ciphr.
300 UK HR decision-makers were asked to share their views on the most pressing workplace issues for their organisations in the year ahead (to July 2026). The majority cited at least two or more causes for concern (five was the average).
Recruitment – attracting and engaging skilled candidates – was revealed as the biggest worry for UK businesses, with 29% of those surveyed calling this a major challenge.
A similar number of respondents (28%) expect employee retention to prove challenging, while others are bracing for rising costs and budget squeezes (27%).
Many (26%) also believe that their organisation may struggle to satisfy employees’ remote or hybrid working expectations going forward.
Using AI, pay rise requests, and staying compliant (three distinctly different organisational ‘challenges’) were tied for fifth place in Ciphr’s poll. One in four (25%) HR professionals anticipate difficulties with ensuring good AI practices, meeting salary expectations in a continuing cost-of-living crisis, and getting ready for the sweeping reforms of the Employment Rights Bill.
Other big concerns included providing employees with: regular training and development (23%), a good work-life balance (23%), an inclusive workplace (22%), and new benefits and rewards (22%).
Challenges facing UK employers in the year ahead (top 10)
Commenting on the survey findings, Claire Hawes, chief people and operations officer at Ciphr, says: “It’s interesting to see how close the top five results were, with just one percentage point difference between each one. Although recruitment and retention continue to make headlines, Ciphr’s research highlights that leaders have many other, equally concerning, challenges to navigate – including AI, the impact of tighter budgets, complex regulatory changes, salary inflation, and continuing RTO/WFH demands. With such a range of challenges, it’s not always clear where to focus your efforts.
“Yes, there’s the challenge of attracting the right talent. But that’s only ever half the battle – keeping people engaged, supporting them and enabling them to grow in their roles, while meeting their pay expectations, is often another challenge again.
“Employers must prioritise creating a compelling employee value proposition (EVP), which covers every aspect of the employee experience. Be led by your data – use feedback from existing employees, of all ages, and recent leavers to understand what needs to improve. Maybe it’s your benefits, maybe it’s clearer career pathways or maybe it’s more transparent communications. Make the changes you can and measure the impact.
“Operational resilience is contingent on how well organisations can balance rising costs with strategic investment in their people. Because the firms that put their people first will, I believe, be best placed to adapt and succeed in 2026.”
Original Article: HRnews
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