What are the three main HR challenges?

The three main HR challenges are employee engagement, recruiting and onboarding, and retaining employees. Employee engagement directly influences productivity, retention, organizational culture, innovation, and customer satisfaction. Recruiting and onboarding directly impact the organization's ability to attract top talent and integrate new employees effectively, ensuring long-term success and productivity. And retaining employees reduces turnover costs, fosters a stable and experienced workforce, and maintains organizational knowledge and continuity.

What is the toughest challenge faced by HR professionals?

One of the toughest challenges faced by HR professionals is striking a balance between meeting the needs of employees and aligning those with the strategic objectives of the organization, all while navigating evolving legal and regulatory landscapes.

What are the biggest challenges for HR?

Adapting to remote work: HR needs to reimagine traditional workflows and facilitate effective virtual collaboration while ensuring employee productivity and well-being. Implementing diversity, equity, and inclusion (DEI) strategies: HR needs to be committed to fostering an inclusive workplace culture where all individuals feel valued and empowered to contribute. Building a winning culture: HR must focus on cultivating shared values, transparent communication, and support systems that foster employee engagement, satisfaction, and growth. Tackling employee retention challenges: HR needs to develop innovative strategies to retain top talent, emphasizing the importance of addressing evolving employee needs and concerns to maintain organizational stability and success.

20 HR challenges in 2025 and how to solve them

Let’s face it: HR in 2025 is not for the faint of heart.

Between economic whiplash, AI disruption, and the Great Employee Shrug (A.K.A. low engagement), HR leaders are juggling more flaming swords than ever — with one hand tied behind their back. But good news: while the challenges are real, the solutions are within reach. Especially if you know where to look (spoiler alert: recognition plays a starring role).

Here are the top 20 HR challenges we’re seeing in 2025, backed by data from our 2025 State of Recognition Report.

HR’s biggest headaches in 2025 (and how to cure them with recognition)

Leading HR today feels a lot like playing whack-a-mole — only the moles are burnout, turnover, disengagement, and a dozen other buzzkills with better job security than most employees.

And while new tools and trends flood your inbox daily, one strategy quietly outperforms the rest: recognition. Not the once-a-year, dusty-certificate kind. We’re talking real, frequent, meaningful appreciation — the kind that connects people to purpose, boosts performance, and makes teams actually want to stay.

Backed by the latest insights from Achievers Workforce Institute (AWI) and global employee data, here are the top 20 HR challenges you’re likely facing in 2025 — and how to fix each one with recognition that actually works.

Because let’s face it — employees aren’t asking for miracles. They’re asking to be seen.

Top HR challenges and how to solve them

1. Fading engagement

Only 26% of employees say they feel engaged at work. That’s not a slump — it’s a crisis.

Fix it: Build recognition into your daily rhythm. Employees who are recognized weekly are 3x more likely to feel engaged.

2. Retention risk

Only 22% of employees plan to stay in their role next year. Ouch.

Fix it: Recognition is your best retention strategy. Weekly recognition makes employees 6x more likely to envision a long-term future with your company.

3. Manager blind spots

Only 15% of employees are regularly recognized by their manager — and when that goes, everything else goes with it.

Fix it: Train managers to lead with recognition. It’s not just a nice-to-have — it’s leadership 101.

4. Clarity in chaos

92% of employees feel unclear about expectations.

Fix it: Recognition creates clarity. Weekly recognition makes employees 11x more likely to feel informed during change.

5. The recognition gap

Weekly recognition dropped from 29% to 19% in a single year. That’s more than a dip — it’s a signal.

Fix it: Make recognition inescapable. In meetings, in chats, in your platform — wherever work happens, praise should follow.

6. Burnout and low productivity

Only 25% of employees feel they’re working at their most productive.

Fix it: Recognize effort — not just outcomes. Employees who are regularly recognized are 2.6x more likely to be productive.

7. Disconnected purpose

Only 23% of employees feel their work connects to company purpose.

Fix it: Recognition aligned to values helps employees understand their impact — and connect the dots between effort and mission.

8. Belonging deficit

Only 25% of employees feel a strong sense of belonging.

Fix it: Recognition builds belonging. Weekly recognition makes employees 9x more likely to feel they belong.

9. Recognition that doesn’t land

Only 21% of employees say the most meaningful recognition includes a reward. That means you can’t “gift card” your way to engagement.

Fix it: Lead with the message. Specific, authentic appreciation is more powerful than points alone.

10. Disengaged middle managers

Manager effectiveness is a make-or-break factor. And recognition is foundational.

Fix it: Bake recognition into leadership KPIs and reviews. If your leaders aren’t recognizing, they’re not leading.

11. Quiet quitting

60% of employees are actively job hunting or open to offers.

Fix it: Recognition drives loyalty. Employees who feel recognized are 1.7x more likely to see a long-term career at your company.

12. Peer-to-peer appreciation is rare

Only 15% of employees receive weekly recognition from peers.

Fix it: Normalize peer-to-peer recognition. Make it easy, make it visible, and make it count.

13. Recognition tied to rewards only

Nearly half (45%) of employees say recognition is most impactful when it’s specific and non-monetary.

Fix it: Recognition should be meaningful on its own — rewards are the cherry, not the sundae.

14. Culture drift

When recognition drops, so does cultural consistency. And then? Hello, disengagement.

Fix it: Use recognition to reinforce culture every day — not just in onboarding or town halls.

15. Diversity, equity, and inclusion stalls

Recognition helps people feel seen, heard, and valued — especially across diverse teams.

Fix it: Celebrate contributions from all corners of the org. Make inclusion visible through who and how you recognize.

16. Lack of development recognition

Half of employees say their company needs more growth opportunities — but how often do we recognize effort toward learning?

Fix it: Praise development journeys, not just results. “You’re growing” can be as powerful as “You nailed it.”

17. Too much tech, not enough touch

Recognition platforms are great — but only if people use them.

Fix it: Promote daily use, streamline mobile access, and embed recognition in the flow of work.

18. Rewards that miss the mark

71% of employees prefer gift cards, while 45% value non-monetary recognition most. Clearly, one size does not fit all.

Fix it: Offer flexibility and let employees choose. Recognition feels better when the reward actually resonates.

19. Global scale, local fail

If your recognition program doesn’t scale across borders, you’re not just behind — you’re invisible.

Fix it: Choose a platform that supports global reward fulfillment, local compliance, and cultural relevance — all in one.

20. Recognition is seen as “extra”

Let’s put this myth to bed: Recognition isn’t a bonus. It’s business-critical.

Fix it: Treat recognition like the strategic lever it is. Use data to connect recognition frequency to retention, engagement, and performance.

HR in 2025: Less guessing, more recognizing

If 2024 taught us anything, it’s this: recognition isn’t a fluffy perk — it’s foundational. When people feel seen, they show up differently. They collaborate more, stay longer, and drive better results.

According to AWI, employees recognized weekly are:

9x more likely to feel they belong
6x more likely to envision a long-term career
2.6x more likely to be their most productive selves

And when that recognition comes from a manager? Everything multiplies.

So yes — 2025 is throwing HR its fair share of curveballs. But the path forward is surprisingly straightforward. Make recognition frequent, meaningful, and manager-led. The rest? It follows.

Dive even deeper into how HR leaders can tackle top challenges in the latest State of Recognition Report from Achievers Workforce Institute

Read the report

Looking to turn insights into action? Our manager’s checklist for effective recognition will help you start tackling these challenges by creating recognition that actually sticks.

Download the checklist

Key insights

Employee engagement remains a key driver of organizational success, yet many organizations struggle to maintain it in the face of remote work and changing expectations.
HR teams must prioritize strategies like continuous learning, personalized onboarding, and robust health and wellness programs to retain top talent and combat burnout.
Leveraging platforms like Achievers can empower organizations to tackle HR challenges, from improving employee recognition to fostering a culture of inclusion and belonging.