HR leaders shift focus from perks to performance

They prioritise skills and agility amidst talent shortages and AI disruption.

HR leaders in Singapore are pivoting away from traditional benefits such as health perks and pay bumps, focusing instead on building manager effectiveness, workforce agility, and skills-based talent strategies this year, according to the Global Talent Trends 2025 Highlights report by Mercer.

The shift comes as organisations grapple with rising talent shortages, burnout, and the growing influence of AI on work. The report said that two in five organisations report that difficulty filling open positions has had an impact on their business. Specifically, these companies see an increase in compensation costs by paying a premium to attract talent with key skills, increase recruiting costs, and increase employee burnout risks,

HR leaders’ top priority for this year is to improve people managers’ skills, followed by enhancing the employee experience and employee value proposition to attract and retain top talent and designing talent processes around skills.

This was different from last year’s priorities, which were focused on health and well-being benefits.

Meanwhile, redesigning work to incorporate AI and automation has fallen low on the priority list. The report said that despite its transformative potential, only 28% of organizations are regularly using generative AI. HR leaders at those companies say that AI has not led to a fundamental shift in their business model.

The report said that to remain competitive in an ever-changing world, organisations need to be great at three things: Designing Work, Developing Skills, and Deploying Talent.

Many are strengthening their skills foundation like job architecture and skills taxonomies to accelerate and scale, only 47% are focusing on redesigning the work itself.