In April 2025, Zywave surveyed over 1,000 small and mid-sized employers across the U.S. The survey focused on the economic climate, workplace challenges, and emerging workforce strategies. Here are five key employer challenges identified in the survey.
Economic Uncertainty Is the Top Concern
Nearly 60% of employers cite economic uncertainty as a top concern, driven by policy shifts, inflation, trade disruptions, and sector layoffs. This uncertainty is causing organizations to plan and spend cautiously.
Inflation and Rising Health Care Costs Are Straining Budgets
Inflation and rising health care costs remain top concerns for employers in 2025. With health care expenses expected to increase 7–8%, many organizations are shifting more costs to employees, reevaluating plans, and emphasizing employee education to manage benefits costs.
Compliance Challenges Are Growing
With ongoing regulatory changes, 26.7% of employers name compliance as a top challenge, citing new federal laws, increased enforcement, evolving DEI policies, and immigration requirements. Employers are staying informed and agile to address these demands.
Attraction and Retention Challenges Persist
While the labor market has stabilized, nearly 60% of employers still struggle to attract and retain talent—a trend expected to continue in 2025. To address this, employers are prioritizing employee engagement, increasing compensation, expanding development opportunities, enhancing onboarding, and adopting skills-based hiring.
Employers Are Focusing on Strategic Workforce Planning to Win and Keep Talent
Talent attraction and retention now rank behind inflation, healthcare costs, and tariffs as top challenges. Most employers remain optimistic, with 76.6% hiring in the past six months and aligning workforce strategies with long-term goals. Organizations that emphasize efficiency, engagement, and adaptability are better positioned for success.
Conclusion
The 2025 State of the Market Survey reveals that employers face challenges like economic uncertainty, inflation, compliance, and talent management. Staying informed and agile is essential for ongoing success. Download the bulletin for more details.
