For HR leaders, maintaining workforce productivity in 2025 is a daunting challenge, especially in the current environment. Australian businesses continue to face shifting regulatory red tape, growing competition, and tough economic conditions, putting increasing pressure on HR leaders to maximise productivity and ultimately, profits. 

As a result, workplace flexibility is in a state of flux, with more businesses enforcing mandatory return-to-office measures. However, flexibility doesn’t always equate to greater productivity– a reality HR leaders are acutely aware of. In fact, our research reveals that 56% of HR leaders were not confident that a four-day work week would boost productivity. It may be up to HR leaders to open up the conversation between employers and their employees on expectations for flexibility.

As these workplace reforms reshape the employment landscape, HR leaders must strike a careful balance between compliance, productivity, and workforce engagement in the year ahead.

Adapting to new work rules

Industrial reforms (IR) in 2024, including the Closing Loopholes No.2 Act, transformed fundamental aspects of workplace policies by enforcing the "right to disconnect," establishing more stringent definitions around casual work, and strengthening fair work practices. The introduction of these reforms significantly impacted employee expectations and working hours. 

Success in 2025 will rely on finding a balance between respecting employee boundaries and maintaining the agility and innovation necessary to drive growth. The new regulations necessitate a fresh approach to workforce management, where HR leaders need to develop clear, realistic communication policies and remain flexible around the needs of the business and employees’ work-life balance. 

The cost of compliance on payroll and productivity

Payroll management, a core HR responsibility, will also face new complexities as these IR reforms demand more detailed tracking of hours, overtime, and pay adjustments. Many payroll systems will need enhancements to comply with the regulations, with a particular emphasis on the correct classification of workers. Accurately managing entitlements and distinguishing between casual and permanent roles will be essential to avoid costly penalties. The challenge for HR leaders will be to ensure compliance while also streamlining processes to avoid disruptions that could impact productivity.

To navigate these challenges effectively, forward-thinking HR leaders are leaning into technology. Automation of payroll and other compliance-related tasks is no longer a matter of convenience—it is an operational necessity. By investing in automated systems that track hours, manage entitlements, and apply regulatory updates in real-time, HR leaders can ensure compliance while freeing up resources for strategic initiatives. 

Leveraging global talent

Factors like changing IR reforms will drive more HR leaders to consider international hiring, as they look to diversify and strengthen their workforce. Access to a global talent pool also offers opportunities to access specialised skills, fill gaps, and ensure business continuity amidst local talent shortages. 

However, effectively managing a global workforce requires HR leaders to have access to the right tools and platforms that can simplify complex functions like onboarding, compensation, and employee management across borders. Platforms designed for global hiring can reduce administrative burdens by automating compliance tasks, managing currency conversions, and adapting to the tax and benefits requirements of different regions. Having this capability is also helpful for maintaining compliance with local regulations while tapping into the global talent pool to enhance productivity.

Investing in third-party expertise for compliance and efficiency

In a complex regulatory environment, many HR leaders will benefit from engaging external consultants who bring specialised knowledge in employment law, payroll, and compliance. These advisors can provide tailored insights to ensure organisations meet compliance standards while uncovering opportunities to bolster productivity amidst regulatory changes.

The road ahead

In 2025, IR reforms and shifting perceptions on workplace flexibility is set to make the roles of HR leaders more complex than ever. By prioritising technology, strategic partnerships, and a proactive approach to regulatory compliance, HR leaders can turn these reforms into opportunities for productivity gains and workforce satisfaction. Embracing these tools and strategies will be crucial in maintaining a productive, resilient organisation in a changing regulatory landscape.