The top priority for HR teams in the coming year is adapting to the Employment Rights Bill, according to research by law firm Freeths.

As HR professionals prepare for the wide-ranging reforms, 38% said this was one of their top five priorities for 2025, while 33% cited compliance with HR legislation.

Diversity and inclusion was less of a focus in the 2025 survey, Freeths found. Just 5% ranked it in their top five priorities this year, compared to 27% in 2024.

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Both employee engagement and retention ranked highly for respondents – mentioned by 29% and 26% respectively. Almost a quarter (22%) ranked employee health and wellbeing as important.

The number of businesses promoting whistleblowing initiatives rose sharply year-on-year, according to Freeths, from 28% in 2024 to 37% in 2025.

Although the Employment Rights Bill features prominently on to-do lists, it is still a cause for concern. Almost two-thirds (64%) are worried about the impact of day-one unfair dismissal rights, and 49% are concerned about the right to statutory sick pay from the first day of sickness.

Many businesses are worried about the costs of compliance associated with the legislation. Eighteen per cent fear there will be an increase in tribunal claims, while 10% feel there will be costs associated with changes to existing work practices.

Almost half (45%) would support an “initial employment period” of six months where rights would not have full effect – something the government is reported to be considering.

Six in 10 businesses are yet to implement training on taking reasonable steps to prevent sexual harassment, despite new protections for employees coming into force last October. A third have this in development.

Trust in artificial intelligence has declined since last year, and only 46% of respondents said they had a good understanding of the legal risks associated with AI, especially regarding discrimination and data protection.

Rena Magdani, partner and national head of employment at Freeths, said the research had thrown up a “few surprises”, particularly around AI and D&I.

“While businesses face uncertainty regarding new employment laws and challenges in the workforce, it is good to see that so many remain focused on ensuring compliance and improving transparency.”

The government released a host of amendments to the Employment Rights Bill last week, which has its third reading in the House of Commons tomorrow and Wednesday (11 and 12 March). It will then move to the House of Lords.

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