European HR leaders are blazing a new trail. They’re championing pay transparency, offering flexible work arrangements, experimenting with high-stakes use cases for AI, and prioritising diversity, equity, inclusion, and belonging (DEIB) more than people teams in the US.
Our 2025 State of People Strategy Report uncovered the results, but now we’re taking a closer look at the key trends. To discover how leaders across the globe can learn from Europe’s progressive, effective HR strategies, we’ve spoken to human resources professionals with a deep understanding of the European market. Here’s what we learned.
HR priorities in Europe are shifting.
For the first time in the history of our report, DEIB made its debut in the top 5 priorities in Europe, with HR respondents there 2.8 times as likely to rate DEIB as a priority than their US counterparts (28% vs. 10%). Even so, that’s still less than a third of respondents.
Lucas Botzen, founder of Rivermate, an employer of record platform based in the Netherlands, noted that for DEIB to become even more of a priority, it needs to be threaded through all elements of the employee lifecycle. That way, it can become a core component, not just an add-on.
To achieve this, he recommended companies develop a clear vision and strategy for DEIB, aligned with overall business goals. “This involves setting measurable objectives while ensuring accountability of the leadership toward the delivery of such goals,” he said. At the same time, companies need to invest in training for HR professionals to help them become effective champions of DEIB initiatives. “Workshops, mentorship programs, and activities for building inclusive communities are some ways this may be fostered,” he added.
HR teams have a holistic approach to employee engagement.
When it comes to employee engagement, HR teams in Europe recognise that a wide range of tactics can be effective, rather than simply relying on a few faithful options, which is a more typical approach in the US.
In fact, HR departments in Europe are more likely than US people teams to have rolled out benefits designed to boost engagement. These include learning and development (L&D) programming, flexible time off, remote work policies, stipends, and four-day work weeks.
Joaquin Migliore, director of people experience at Superside, said those benefits are a likely result of a long history of policies and regulations around time off, notice periods, and workers’ rights, which can create a certain expectation among European employees.
In Migliore’s opinion, “These benefits — especially when American companies open up offices in Europe and have to adapt to the local reality — tend to be more appreciated and more utilised. In comparison, implementing the same benefits in the US may fall flat because culturally (and even morally) folks will likely not utilise as heavily, as they might be perceived as impacting performance or chances of promotion.”
Pay transparency is the norm, not the exception.
When it comes to pay transparency, Europe is showing the rest of us how it should be done. While only 23% of HR professionals in the US rated their company’s pay transparency as good or excellent, that number climbs to 59% for Europe.
In the US, restricted knowledge of salary bands is the norm for just over half (53%) of respondents to our 2025 State of People Strategy Report. That’s in stark contrast to Germany, where only 8% of respondents said knowledge of pay bands is restricted to HR and finance.
Embracing pay transparency might feel scary — but it’s a key driver for improving employee engagement and performance.
“Transparency makes employees feel like you trust them and that you aren’t hiding things from them, which can lead to a heightened sense of ownership and ambassadorship — two key drivers of engagement,” said Migliore. “Performance conversations also become fairer and less compensation-oriented because we all know the implications of promotions and internal mobility, which allows managers to focus more on the actual performance trends instead.”
HR and Managers: Both Sides of the Story
For the first time, our 2025 State of People Strategy Report includes managers outside of HR — providing valuable opinions from the other side of the table.
Managers recognise the work of HR.
There’s incredible alignment between European managers and the HR teams that support them. Here’s what that looks like across a range of workplace topics for respondents based in England, France, and Germany:
Appreciation for HR processes is highest in France, where 85% of managers said HR provides most or all of the support they need. That support pays dividends, as 83% of surveyed French managers reported they strongly or completely trust their HR teams.
Despite this strong relationship, data from our 2025 State of People Strategy survey also showed that in Europe, managers tend to view HR as solely an administrative function — when in reality it’s so much more.
To shift the focus from admin to advocacy, Anna Amosova, HR director at Mellow, concentrates on turning HR’s efforts toward providing strategic value through its ability to solve business problems. “This could involve improving internal processes, hiring the right people, and organisational design.”
And the key to proving this strategic value is good data. Amosova mentioned that budgeting, forecasting, and the right metrics to justify decisions are all crucial. “Without this, it’s difficult to convince the business that HR should focus on strategic tasks rather than getting bogged down in bureaucracy,” she explained.
Botzen also recommended HR teams focus on the key contribution HR makes to the overall employee experience. “By being more active and strategic in discussions, showing how they contribute to organisational outcomes, HR can reframe its role from being an administrative function to becoming a key partner in building a well-performing company culture,” he said.
HR teams have confidence in managers’ abilities.
European HR teams know their managers can handle the good times — and the bad. Data from our 2025 State of People Strategy survey showed that in Europe, 27% of HR professionals reported the managers they work with are very prepared to conduct reviews that include bad news. In comparison, only 8% of HR professionals in the US reported the same.
In Migliore’s opinion, this ability to deliver bad news is partially due to strong management enablement. “A solid HRBP function can truly help with this, especially one that adopts a coaching approach, and that’s free from talent acquisition responsibilities so they can focus primarily on guiding managers.”
Cultural differences may well have a role to play, too. “Most European countries tend to be much more direct with constructive feedback versus the US, where it's culturally a bit more awkward,” said Migliore. “This means that innately both managers are more likely to be used to providing constructive feedback, but employees are also more likely to be used to hearing this and not get discouraged.”
But performance reviews remain a challenge for HR and managers.
Managers and HR reported similar pain points in managing performance reviews. In fact, 64% of HR professionals based in England, France, and Germany and 49% of managers from the same regions said they find it hard to quantify what “good” means versus “excellent” during the review process.
Migliore suggested that one way to provide clarity is to establish expectations for each level, including results, potential or aptitude. These may be different for different teams, meaning cooperation between HR and managers is key.
“It’s important for HR to work closely with managers to standardise and define expectations (differing by level) that make sense for that department, and that are relatively straightforward for managers to evaluate in performance reviews,” he said. “For example, if you have two axes of evaluation (results and competencies, both evaluated on a scale of 1 to 4). Then:
- The sales department could have new revenue-generating expectations mapped to each of the results performance axis scores (depending on the target-setting methodology it could be something like <70% of target being a 1, 70-79% of target being a 2, 80-99% a 3, and >95% a 4).
- Each department would then use pre-shared descriptions (org-wide) for expectations at each level for each competency (plus a description of a unique sales-specific competency, like negotiation) scoring each 1 through 4.
This would provide a standardised evaluation where the criteria can be shared with everyone on the team in advance and that allows for consistent calibration.”
European HR teams are embracing machine learning.
Artificial intelligence is changing how HR functions — it’s being used to create feedback summaries and performance reviews, sort job applications, summarise interviews, and more, according to 2025 State of People Strategy Report respondents.
Some of the top use cases for AI among European HR teams involve mundane, repetitive tasks. “[These] take up a lot of time but barely contribute to cultivating the desired work culture or actually managing employee relations or talent acquisition,” explained Tetiana Hnatiuk, head of HR at Skylum, a Ukrainian company producing photo-editing software. “AI is better at performing those technical tasks without the possibility of human error, and you are better at focusing on people. So, it can be really beneficial for both HR and AI to do what they do best,” she added.
For these kinds of applications, AI is mostly meeting or exceeding expectations. But the real magic happens when HR teams are open to experimenting with AI in higher-stakes use cases.
Data from our 2025 State of People Strategy survey showed that using AI to identify bias in reviews, raises, and promotion opportunities is the least popular AI implementation for European HR teams — but it’s exceeding their expectations the most.
At Superside, Migliore said they’re trying to get ahead of the game, by building a custom GPT. This has been fed all the company’s career tracks (including competency expectations by level and by team) and semi-annual review structure. It was also given prompts on effective coaching approaches.
“We’re offering it to employees as a resource for them to use and spar against when writing reviews (including self, upward, peer, and downward),” he explained. “We knew people were likely going to use ChatGPT, so it felt best to give them one that’s properly equipped with our framework so it can guide them in checking their own biases, blindspots, inconsistencies between their reviews and 360-degree feedback, and more.”
Novel use cases for AI in HR have huge potential, but there’s still a strong argument for a human touch. “Maybe you want a chatbot for your employees — but don’t forget how crucial the human factor is for the HR field,” cautioned Hnatiuk. “It’s better to implement AI in moderation and as an assistant to HR, not a replacement.”
HR teams in Europe are performing but at risk of burnout.
It’s clear that European HR teams are outperforming their US counterparts, with 16% of European HR professionals saying they’re exceeding their goals, compared to 11% of teams in the US.
But while HR teams in Europe are working hard to do the best for their people, they’re also feeling the effects of burnout. Indeed, 45% said they feel too overwhelmed by their management responsibilities to do their best work. Some of this overwhelm potentially stems from administrative burdens, with HR teams in Europe more than twice as likely as their US counterparts to list paperwork and policies as a significant contributor to burnout.
This signals that HR teams in Europe might need more support from their organisational leaders. At Mellow, Amosova uses a blend of automation and outsourcing to reduce the administrative burden on HR, allowing her team more time to focus on strategic issues.
She also noted the value of budgeting software. “Through proper budgeting, you can show the business how the administrative burden negatively impacts not only HR, but the entire company. This is often the main conflict specialists face: They see the problem but don’t always know how to communicate it to management.”
Amosova added that it’s also important to remember that some administrative work will always remain with HR, so it’s unrealistic to try to eliminate it completely.
Hnatiuk agreed that the right HR tech, including HR management systems, can help reduce the burden of administrative tasks. She added that even though HR’s role is to support and encourage employees, they also need this level of support from leaders. “HR shouldn’t feel like they have no one to talk to in case they encounter problems or challenges at work.” Hnatiuk schedules regular meetings between HR and leaders to ensure everything is on track and that her team has all the resources they need.
Taking Inspiration From Europe’s Progressive Approach to HR
There’s a lot to learn from how Europe is doing HR — but much of it comes down to knowing which resources to use, and when. By gathering the data needed to prove strategic value, building custom AI systems that support performance management, and embracing a wide range of employee benefits, European HR teams are proving the impact of an innovative approach.
For more insights into HR trends across Europe and beyond, read the full 2025 State of People Strategy Report.
