7 Workplace Challenges for 2025

Although the U.S. economy enjoys low unemployment and declining quit rates, the psychological state of workers tells a more complicated story. Historically low employee engagement and wellbeing levels indicate employees are struggling. Many report feeling disconnected from their organization’s mission and like their organization doesn’t care about them.

Gallup’s measures of these key employee experiences remain below pre-pandemic levels. In other words, the workplace never returned to normal.

These trends highlight a leadership challenge: inspiring and supporting teams through significant change and uncertainty. Employers who want to implement changes (such as AI adoption) will find it difficult to do so if their people are disconnected from their organization.

But there is hope: A good job is a vital part of a life well-lived, and it can provide meaning, social connection and community. By changing how people are managed, employers can address engagement and wellbeing simultaneously, creating a new foundation -- especially in uncertain times -- for consistent performance, retention and organizational growth.

Here are seven workplace challenges for organizations to navigate going into the new year:

1. The Great Detachment Threatens Performance

In 2024, U.S. employee engagement reached an 11-year low. Other key measures tell an even gloomier story: Overall employee satisfaction returned to an all-time record low, and employees are seeking new job opportunities at the highest level since 2015.

Unlike the Great Resignation of 2021, employee quit rates have not increased. Perhaps concerned about a weaker job market and inflation, workers are sticking with their current employer while feeling more disconnected than ever. Gallup refers to this as “the Great Detachment.”

Re-engaging the workforce and re-building employee commitment will be a critical leadership challenge in the coming year.

Read: The Great Detachment: Why Employees Feel Stuck

2. Poor Job Markets Lead to More Disgruntled Workers

In the 2024 State of the Global Workplace report, Gallup analyzed the relationship between employee engagement and local job markets. We found that when it’s harder to find a job, people are more likely to be actively disengaged. A plausible explanation is that people become very unhappy when they are trapped in a job they don’t like.

That said, a better job market doesn’t necessarily result in employees becoming highly engaged. Improving economic conditions shifts employees from angry to indifferent, but not from indifferent to inspired.

Read: 3 Key Insights Into the Global Workplace

3. U.S. Employee Life Evaluation Hits Record Low

Fifty percent of U.S. employees are thriving in their overall lives -- a new record low in Gallup’s trend measuring employee wellbeing since 2009. Thriving employees who rate their current and future lives positively are less likely to miss work because of health issues and are less likely to seek another job.

At the same time, the percentage of employees who believe their organization cares about their wellbeing is well below pre-pandemic levels. Leaders need to prioritize creating a culture of employee wellbeing that surpasses their current efforts if they want sustainable employee performance.

Read: Despite Employer Prioritization, Employee Wellbeing Falters

4. AI Stalls in the Workplace

Since the release of ChatGPT in 2022, leaders have invested substantially in AI to boost productivity and customer service in their organizations. But so far, employee adoption of AI in the workplace is lagging behind the hype. Nearly seven in 10 employees say they never use AI, while one in 10 say they use it at least weekly. These figures remained essentially unchanged from 2023 to 2024. Perhaps even more telling, the number of employees who say they feel very prepared to work with AI dropped by six percentage points in this period.

This could be a sign that leaders’ aspirations and vision for using AI in the workplace have not yet translated to clear direction or support for employee adoption. Some employees will be early adopters, but many won’t feel comfortable using AI at work until they receive a clear plan and training.

Read: AI in the Workplace: Answering 3 Big Questions

5. Child Care Remains a Major Career Roadblock for Working Mothers

Many working mothers and fathers aspire to management and leadership roles in their career. However, women with children (35%) are about twice as likely as men with children (18%) to say they declined or delayed a promotion due to family obligations. Women with children are also significantly more likely than men with children to consider reducing their hours or leaving their job due to child care issues.

Organizations that want to attract and retain top leadership talent need to change job structures, role expectations, and workplace norms to better support women with children at every stage of their career.

Women who strongly agree they are able to maintain a healthy balance between work and personal commitments are 50% more likely to be thriving in their lives, more than twice as likely to be engaged at work, and 38% less likely to be actively looking or watching for a new job.

Read: More Than a Program: A Culture of Women’s Wellbeing at Work

6. Feedback and Recognition: Biggest Manager Blind Spots

To better understand conflicting perceptions of the workplace, Gallup studied how managers think they lead their teams versus how employees say they are being managed. For example, 50% of managers strongly agree they are giving feedback to their direct reports every week, while only 20% of individual contributors strongly agree their manager does so. When it comes to managers giving recognition for good work, a similar gap emerges.

Establishing a weekly coaching habit that includes meaningful feedback and recognition for quality work is a key growth opportunity for managers.

Read: The Strengths, Weaknesses and Blind Spots of Managers

7. Productive Hybrid Work Requires Better Team Collaboration

Many organizations now have a substantial number of hybrid workers. Fifty-three percent of remote-capable workers are hybrid to some degree. This requires organizations to create a meaningful workplace value proposition that draws people into the office. It also puts pressure on teams that have people in different locations and on different schedules to better communicate and coordinate their work.

So what makes a hybrid team productive? Gallup finds that the best teams create a team charter, distinct from corporate policy, that defines how members best work together. They maximize the quality of their on-site time with collaboration and team-building activities. And they regularly evaluate their hybrid work experience as a team to adapt and improve.

Read: How to Boost Productivity in Hybrid Teams