Navigating leadership in 2025: The biggest challenges & how to prepare
13 minute read | Article | Managing a team Flexible and hybrid working Staff engagement Change and business transformation
Leadership is at a crossroads. The pace of digital transformation, evolving work models, and economic instability are reshaping the world of work—but many senior leaders aren’t prepared for what’s next.
In our latest Anti-Trends report, we highlighted a critical prediction for 2025: organisations are facing a leadership gap, and it’s only widening. A recent survey of 1,500 HR professionals ranked leadership and management development as the top priority for the year ahead. But what’s behind this growing concern?
Today’s leaders are overwhelmed. They’re expected to drive business growth, navigate uncertainty, and keep top talent engaged—all while adapting to rapid change. The pressure is immense, and without the right support, even the most experienced leaders can struggle.
So, what’s making leadership harder than ever? And more importantly, how can businesses ensure their senior teams are set up for success?
We explore the biggest leadership challenges shaping 2025—and share practical strategies to help your organisation stay ahead.
Leaders across the Middle East are now standing at the forefront of a transformative era. The latest PwC AI Jobs Barometer reveals a striking trend: sectors with high AI adoption are experiencing productivity growth rates five times higher than those with lower exposure to AI. This isn’t just a global phenomenon—it’s a regional opportunity waiting to be seized.
In the Middle East, where digital transformation is a cornerstone of national visions like Saudi Arabia’s Vision 2030 and the UAE’s Centennial 2071, AI is no longer a futuristic concept—it’s a present-day reality.
This translates to generate between $21 billion and $35 billion annually where growth is already evident in sectors like finance, healthcare, and energy, where AI-driven solutions are streamlining operations and boosting efficiency.
For leaders, this presents both an exciting opportunity and a complex challenge. The rapid evolution of AI technologies demands strategic decisions on tech stacks, operating models and workforce planning. However, with varying levels of understanding about the immediate and long-term impacts, coupled with the pressure to deliver a strong return on investment—many are left grappling with how to proceed.
Most senior leaders aren’t digital natives. Their strengths lie in strategic thinking, people management, and driving business success. But as technology becomes an integral part of leadership, the ability to blend human expertise with machine intelligence is now essential.
As James Milligan, Global Head of Technology, Engineering and Contracting at Hays, warns:
“You will be left behind if you don’t embrace new technologies like AI.”
The solution? Prioritising upskilling—especially in areas like Generative AI.
Satya Nadella, CEO of Microsoft, champions a ‘learn-it-all’ mindset over a ‘know-it-all’ approach. Being AI-literate doesn’t mean having all the answers—it’s about fostering curiosity, innovation, and collaboration.
This theme of continuous learning was also highlighted at the Majlis Mohamed bin Zayed Ramadan session, where His Highness Sheikh Hamed bin Zayed Al Nahyan emphasised the importance of a learning mindset in shaping the future. Keynote speaker Katja Schipperheijn, a renowned learning strategist, discussed how curiosity, openness, and imagination are essential traits for leaders navigating rapid technological change. She pointed out that education and development must evolve to prepare future generations for an AI-driven world, echoing the UAE’s strong commitment to lifelong learning.
But with demanding schedules, how can leaders realistically make time for learning?
For Jerrell Moore, Chief Human Resources Officer at Cadence Bank, the key is aligning personal growth with business objectives:
“Many companies create separate learning paths for leadership and business. But when learning directly ties into company goals, it no longer feels like extra work—it becomes part of the strategy.”
The takeaway? Invest in continuous learning that supports both leadership development and business success. Those who adapt will thrive—while those who resist risk falling behind in an AI-driven world.
The return-to-office debate isn’t slowing down. Amazon and JP Morgan have already enforced full five-day office returns in early 2025, setting a precedent that other corporations may follow.
For leaders, this creates a difficult balancing act. You start to think, how do you align business goals with employee preferences without risking productivity, engagement, or retention?
And the challenge doesn’t stop there. With talent shortages and rising cost pressures, companies are increasingly looking beyond borders, outsourcing and offshoring entire functions to access skilled professionals at competitive costs. This shift means that location strategy isn’t just about in-office vs. remote work, rather the reality is that it’s about rethinking where and how work gets done in a global talent market. However, the Hays Saudi Arabia Salary Guide 2025 uncovered that flexible working is the most valued benefit by professionals across the region—affirming the importance of offering working arrangements that support this. Especially as 44% of professionals are either dissatisfied or very dissatisfied with their current work-life balance.
As industry leaders push ahead with return-to-office mandates, many organisations are feeling the pressure to follow suit. With workplace decisions made in haste—or delayed indefinitely, it can be just as damaging as making no decision at all.
According to John Dore, Programme Director at London Business School, a “wait-and-see approach” may do organisations a disservice, simply postponing difficult conversations for another day. However, knee-jerk reactions can also backfire, leading to talent disengagement and increased turnover.
So, what’s the right move? The key is to tailor your location strategy to the talent you need most. If you’re looking to attract:
…then flexibility must be part of your value proposition.
In fact, across our top 10 IT contracting roles, work-life balance and flexibility consistently rank as top priorities. While competitive pay and career growth remain crucial, high-demand professionals—such as Data Engineers, Business Analysts, and Java Developers—are actively seeking roles that offer greater autonomy and balance.
The takeaway? If your talent strategy doesn’t align with evolving workforce expectations, you risk losing top candidates to competitors who offer the right mix of flexibility, innovation, and career development.
More professionals are considering leaving their jobs now than during the Great Resignation of 2022. While cost pressures remain a top concern for leadership, employees are feeling the impact through increased workloads, change fatigue and stagnant pay.
If you need evidence that burnout is driving attrition, the numbers speak for themselves:
After years of economic turbulence and workplace shifts, it’s no surprise that fatigue levels across the workforce are high. Yet, as a leader, you’re likely looking ahead to 2025 with plans to implement new technologies, restructure teams, and drive operational efficiencies.
But here’s the challenge: How do you transform your business without losing your best people?
Retention now hinges on more than just salary—it’s about creating a work environment where employees feel valued, supported, and energised to stay. The most successful leaders will prioritise employee well-being, workload balance, and career growth, ensuring that change doesn’t come at the cost of engagement.
Winning the talent battle isn’t just about attracting top professionals—it’s about keeping them. Yet, too many organisations are struggling with high turnover, losing their best people to competitors.
So, how do you plug the gaps? With economic uncertainty tightening budgets, simply increasing salaries isn’t always an option. Instead, leaders must build sustainable retention strategies that support long-term growth, stability, and employee engagement.
Here’s where to focus:
Lack of growth opportunities is one of the top reasons employees leave—nearly 70% of professionals cite professional development as a deciding factor. If you want to retain top talent, you need to prove that their ambitions are best supported within your organisation.
Randall S. Peterson highlights a crucial shift: “We used to be able to see if someone was struggling, but now we often have to rely on what people choose to show us—oftentimes over a screen.” With burnout and stress levels at an all-time high, well-being initiatives must be meaningful. That means moving beyond perks like free coffee or team socials and focusing on genuine mental health support, workload balance, and leadership transparency.
Digital acceleration, fractured workforces, and rising resignation rates—these are just the beginning. Across the C-suite, every function is facing its own unique set of challenges.
CHROs are navigating succession planning in a time where ambition looks different. According to our latest Talent Blueprint, Gen Z prioritises personal growth and impact over climbing the corporate ladder, focusing on excelling in their roles rather than chasing promotions.
CFOs are under pressure with the shift to mandatory sustainability reporting. The Corporate Sustainability Reporting Directive (CSRD) takes effect this year, standardising digital formats for easier compliance and transparency—a significant shift for finance leaders.
What’s clear? The traditional ‘command-and-control’ leadership style is no longer effective. Successful leaders in 2025 and beyond must:
Strong leadership builds strong organisations. Whether you're adapting to digital transformation, workforce shifts, or regulatory changes, the right leadership approach will define success.
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