2025 is shaping up to be a pivotal and turbulent year for workplace culture as companies worldwide grapple with balancing productivity and growth under the return of US President Donald Trump v2.0.
One thing is certain: it will be unpredictable and likely awkward as executives attempt to gauge the shifting growth tensions and decide which “stop, start, and continue” strategies will keep them ahead of intensifying headwinds.
Success in this climate will demand extraordinary leadership. It will test the resolve of even the most forward-thinking leaders and policymakers striving to advance a future-of-work agenda rooted in diversity, flexibility, and gender equality.
President Trump has already offered a glimpse of the push-and-pull forces that businesses will face. One of his first actions since taking office was to dismantle Diversity, Equity, and Inclusion (DEI) initiatives. A memo to federal departments and agencies directed them to notify DEI employees of their reassignment or termination, signalling a sharp shift away from the progressive policies many organisations have championed in recent years.
This development is likely to echo globally, with scrutiny of DEI programs intensifying in countries like Australia, particularly as a federal election looms. The debate around the role and value of DEI initiatives will undoubtedly spark tensions in boardrooms and workplaces.
However, the employers that will truly thrive in 2025 will be those that resist knee-jerk reactions and take the long view. These organisations will stay committed to their values, refusing to compromise on their workplace culture despite external pressures. By playing the long game, they stand the best chance of emerging not just intact but stronger, more inclusive, and better positioned for sustainable growth. Here’s how.
Continue an inclusive approach to business recognising that culture makes or breaks talent
While some companies may seek to scale back DEI initiatives, the best employers will continue and even strengthen the overall ambitions of such efforts, underwriting them as critical to the wellbeing of their culture.
Companies understand the economic imperative and the business case for attracting and retaining the best possible talent and know all too well the consequences of what a toxic, divisive culture does to the bottom line.
Get on the gender gap front foot
The public focus on gender pay gaps won’t go away, even if a backlash against DEI ramps up in Australia.
The Workplace Gender Equality Agency is preparing to launch its next release of employer gender pay gaps on March 4th. This will enable Australians to search for and compare the gender pay gaps of more than 9,200 private-sector employers.
Expect more media attention on companies that have failed to address their gender gaps, especially those that have actually seen their gaps widen.
Ensure flexible work remains a strong selling point
It’s true that some employers are issuing mandates requiring employees to return full-time in the office with no hybrid option.
However, smart employers will continue to see flexible work as key to retaining top talent, reducing the gender pay gap and powering productivity. These organisations will continue to evolve flexible work approaches, maximising technology to deliver the best outcomes for staff and customers in an efficient way for the business, seeing a flexible workforce as an asset, not a deficit. They understand that it’s not just a good selling point on company culture, but also a great win-win for team members’ work life balance whilst remaining agile and responsive as a business.
These employers may even benefit from their competitors’ office mandates as jobseekers search for more flexibility.
We’ve been gathering insights on this to take a real pulse check on how this is playing out across the country. You can get involved via this short survey to share your experiences on hybrid work, return-to-office policies, 4-day workweeks, and the biggest challenges and opportunities for flexible work in 2025. Results will be shared next month.
Prioritise employee mental health and wellbeing
More employers are recognising the need to prioritise the mental and physical health of employees.
This year, we believe more employers will offer flexible work hours, even if issuing stricter return-to-office mandates. This could come in the form of offering clearer and staggered start and end times to meet personal needs and even to support team members in avoiding traffic congestion.
We may also see more comprehensive benefits on offer that aim to address the health of all employees, such as mental health days and opportunities to participate in wellbeing programs. More employers are considering women’s health initiatives, like menopause leave.
In line with the right-to-disconnect legislation that took effect in 2024, we may see more technologies deployed, enabling team members to disconnect automatically from communication, including through auto-email scheduling.
Seek and act on employee feedback
With so many competing forces impacting workplace cultures, smart employers will take a regular pulse check of their team members.
Such employers should also act on what they learn, sharing transparency on the data while collecting and communicating data on what their employee programs are delivering.
At Family Friendly Workplaces, we’ve seen how employers harness robust and regular evaluation processes, like our benchmarking assessment, to assess the performance of their current initiatives and identify risks and weak spots across the organisation.
Effective communication is key, along with “staying the course”
Leaders must articulate why they pursue key workplace initiatives to support diversity efforts. They must do this effectively, continuously, and with conviction.
Employers are increasingly recognising the need for this, especially given the negative comments in the media about DEI programs.
This was something Elizabeth Broderick identified in the progress review on workplace culture at Rio Tinto, released in November. With Broderick finding that Rio Tinto had experienced its backlash to diversity efforts two years into its long-term cultural change program, the CEO of the firm’s iron ore division. Simon Trott, acknowledged the need for better communication. “We need to really be articulating the why, why is this important and why we want to drive this change,” he said.
Meanwhile, CEO Jakob Stausholm committed the company to “stay the course” on their efforts, “the sustained change we want to see in our culture will require ongoing focus and effort.”
There are several other trends to watch out for in 2025, including:
The four-day work week momentum continues
Four-day work weeks once seemed like a pipedream, but they are increasingly becoming a reality, potentially even spurred on by employers offering four day weeks to sweeten up their mandates for staff to spend more time in the office.
Twenty Australian employers commenced a six-month trial pilot program on the four-day work week in August 2022, with 95 per cent of the total 26 employers participating declaring they wished to continue the model. More than half (54 per cent) of workers participating declared their productivity had improved during the trial period, while 64 per cent said they experienced a reduction in burnout.
Further paid parental leave extensions in 2025
The Commonwealth paid parental leave scheme will extend to 25 weeks from July 1 2025, as previously legislated by the Albanese Government.
Another shift will see superannuation paid on top of parental leave for the first time, from July.
These changes may encourage more employers who provide additional paid parental leave to team members to follow the government’s lead and include superannuation.
Rise of human-centric leadership
Artificial Intelligence continues to take on more managerial tasks, a trend that is changing how we think about leadership and the value of leadership.
While globally, we’re seeing some poor and very public examples of leadership that lacks empathy and emotion, we believe that leaders with skills of empathy and connection-building will be in high demand in Australian employers.
Key attributes of successful leaders will be those who can manage diverse workforces, support talent development and take advantage of flexibility to lead their teams to deliver greater productivity.
If you’re looking to delve a bit further into the evolving landscape of flexible work, Parents at Work’s upcoming event on 13 February could be what you’re looking for, as we dive into the challenges, opportunities, and best practices across various flexible work scenarios, including hybrid work, 4-day workweeks, and return-to-office mandates.