A Recap of 2025: A Year of Maturity
Agents Finally Can DO
Looking back from December 2025, the landscape of work, technology, and human capital has shifted fundamentally. The “AI Hype Cycle” finally crashed into the wall of operational reality, and what emerged from the wreckage was leaner, faster, and more autonomous. We moved from asking Chatbots questions to assigning Agents responsibilities.
Here is a summary of the major trends, product launches, and acquisitions that defined 2025.
1. The Shift from “Generative” to “Agentic” AI
The single most significant technological shift of 2025 was the graduation of AI from a tool that writes (Generative) to a tool that does (Agentic).
In 2024, we were excited that ChatGPT could write a job description. In 2025, we stopped writing prompts and started designing workflows. The leading platforms, including Microsoft, Salesforce, and Google, all pivoted hard toward Autonomous Agents.
The Trend: Recruiters partnering with AI become the standard operating model. Recruiters no longer needed to search for candidates; they could review the slate of candidates their AI Agent had sourced, screened, and scheduled overnight.
New Product of the Year: Microsoft 365 HR Agents. Launched in Q2 2025, this wasn’t just a Copilot upgrade. It allowed HR teams to deploy specific “personas” inside their tenant. You could spin up an “Onboarding Agent” that didn’t just answer questions but actively provided IT access, scheduled orientation meetings based on calendar availability, and chased hiring managers for missing paperwork without human intervention. Not perfect, but incredibly powerful.
2. The Great Consolidation: The Platform Wars Ended
The fragmentation of the HR Tech market that peaked in 2022, with over 4,000 vendors, finally collapsed. In 2025, CFOs, tired of paying for 15 different licenses, demanded unification.
The Trend: The All-in-One platforms swallowed the innovators. Point solutions that only did one thing (e.g., only sourcing, only assessment, or only scheduling) were either acquired or went bankrupt.
3. Total Talent Management is Finally Becoming Real
For a decade, we predicted the merging of Full-Time Employee (FTE) management and Contingent Workforce (Gig) management. In 2025, labor shortages and regulations finally drove this.
The Trend: Companies stopped caring about the “employment contract” and started caring about the output.
New Product Category: The “Universal Labor Wallet.” New platforms emerged (and existing VMS tools like SAP Fieldglass evolved) to treat freelancers exactly like employees regarding skills visibility.
The Driver: With the talent shortage in Europe and North America reaching critical mass, companies could no longer afford to keep their contractor data in a separate silo. In 2025, if you searched for a “Java Developer” in your internal system, you saw Jane (Employee), Bob (Contractor), and an Agency option—all in one view.
4. The Rise of Dynamic Skill Inferencing
In 2023 and 2024, companies spent millions trying to build “Skills Taxonomies.” By early 2025, they realized this was a trap. Manual taxonomies were obsolete the moment they were written.
The Trend: 2025 was the year we stopped tagging skills and let AI infer them.
The Tech Shift: Tools like LinkedIn and SeekOut rolled out “Dynamic Inferencing 2.0.” Instead of asking a user to update their profile, the AI reviewed the work they did (GitHub commits, project docs, Slack activity) and automatically updated their skills profile.
The Result: The “Skills-Based Organization” moved from a philosophy to a technical reality, but only for companies brave enough to allow AI to analyze employee work data.
5. The Regulatory Reckoning: The EU AI Act Enforced
2025 was the year the teeth of the EU AI Act (and similar laws in NYC and California) began to bite.
The Impact: Several US-based AI assessment tools were effectively locked out of the European market for failing to provide explainability.
New Product Feature: “The Compliance Shield.” Every major ATS (Greenhouse, SmartRecruiters, Bullhorn) launched a “Compliance Shield” feature. This dashboard gave recruiters a Red/Green light on whether a specific candidate selection process was compliant with local AI bias laws.
The Fallout: We saw a massive reduction in the use of one-way video interviews and “personality scraping” AI, as the legal risk outweighed the efficiency gains.
6. The Death of “Hybrid” Debates
The “Return to Office” (RTO) wars ended in a stalemate that looked a lot like 2019, but with better video conferencing.
The Settlement: The market settled on “Structured Hybrid” (3 days in, 2 days out).
The Tech: We saw a surge in “Presence Intelligence” tools. Microsoft Places and similar office-management software became critical HR tools, not just Facilities tools. HR began using office attendance data not to punish but to program culture—scheduling “Anchor Days” in which teams were guaranteed to be together.
Conclusion: The Year of Maturity
If we summarize 2025 in one sentence: The toys were put away, and the tools were put to work. We stopped being impressed that AI could write a poem. We started demanding that AI reduce our Time-to-Fill by 40% and cut our agency spend by half.
The agencies that survived 2025 were the ones that pivoted to high-touch consulting. The software vendors that survived were the ones that integrated seamlessly into the workflow.
As we head into 2026, the question is no longer “What can AI do?” but “What is left for humans to do?” The answer, clearly, is relationships, strategy, and judgment, the three things 2025 proved AI still cannot do.
This will be my last article for 2025. See you all in the New Year with new ideas and stories. Have a wonderful holiday season and a Happy New Year!
Strong recap, and it points to something deeper. The budget cuts and provider shakeouts are not just market corrections. They signal a structural dilemma that we ignore at our own risk.
1) On one side, corporates celebrate efficiency. On the other side, the very ecosystem that brought fresh ideas is thinning out fast. If agencies and software teams erode, who will push the field forward next year? The giant and slow dinosaurs?
2) Europe faces an extra tension. The EU AI Act protects, but it also slows. A lot. Meanwhile the US and Asia keep moving with speed and confidence. We saw the same pattern with GDPR. Europe engineered rules, others engineered advantage. Bureaucracy is against innovation and the cost of this mindset in the EU is going to be high.
Europe could become the region that pairs responsibility with real progress. But if they get this wrong, they risk a quiet slide into competitiveness loss that big corporate HR leaders will feel sooner than they expect.
The opportunity is still there. But it needs courage, not only compliance.
Nice and inspiring 😊