Every year, a team of workforce experts at UKG sets out to predict the top workplace trends most likely to impact the global workforce. The detailed process for developing our annual Megatrends includes collaboration with hundreds of stakeholders, primary and secondary market research, and deep data analysis, all conducted over the span of several months. This, along with dozens and dozens of one-on-one conversations with business leaders and HR practitioners at organizations of all sizes.
As a result of the team’s concerted effort, UKG has identified three Megatrends expected to shape workplaces worldwide in 2025, and in the years ahead. They are:
- The Escalating Global Labor Deficit
- The Amplified Employee Experience Imperative
- The Human-AI Advantage
Let’s explore each of these three Megatrends in a bit more detail, including how they could affect your organization moving forward and what actions you can start taking today to successfully navigate these workplace developments.
Megatrend #1: The Escalating Global Labor Deficit: Reimagining Talent Acquisition
If you’re currently having trouble filling open job roles, you’re not alone. Globally, organizations across multiple industries report difficulty recruiting employees due to talent scarcity. According to UKG research, 61% of manufacturers say they’re struggling to fill critical labor gaps and 85% of retailers say labor shortages impact their ability to meet customer service expectations. Meanwhile, here in the United States, there were only 92 workers for every 100 open jobs as of December 2024, according to the U.S. Chamber of Commerce.
What’s causing the talent shortage? It’s a number of factors, including demographic dynamics, misalignment of job and skills requirements, geographic imbalances, shifting labor force participation rates, and changing employee expectations. Unfortunately, these same issues are projected to continue, and the global talent deficit is expected to grow significantly in the coming years, with some experts predicting it could reach over 85 million employees by 2030.
While no individual organization itself can solve for the growing labor deficit, there are critical steps you can take today to help future-proof your workforce. It begins with implementing a multifaceted talent acquisition strategy that will help your organization address the current talent shortage while simultaneously preparing for what could become a more challenging situation in the near and long term.
One approach your organization can take is to focus on building more diversified talent pipelines. Start by creating recruitment programs targeting individuals who are underrepresented in your workforce. For example, neurodiverse individuals or people with physical disabilities may make excellent candidates for certain positions. In some industries, minorities and women are vastly underrepresented. For example, in manufacturing, women comprise just 29% of the workforce. With fewer people available to fill open roles, it’s critical to cast a wider net when recruiting for open positions.
But recruiting is just one critical part of the complex labor puzzle. There’s also retention, which brings us to our second Megatrend for 2025.
Megatrend #2: The Amplified Employee Experience Imperative: Unleashing Engagement
Employee engagement has historically been a key indicator of business success in both large and small organizations. The aforementioned growing global labor shortage, coupled with a strong U.S. labor market, has amplified the importance of employee engagement, which is crucial for retention.
However, Gallup finds the majority of employees across the globe (62%) are not engaged, just 23% are actively engaged, and 15% are actively disengaged. The latter means they aren’t only unhappy at work—actively disengaged employees are resentful that their needs aren’t being met and may even act out due to their unhappiness. Every day, these workers can potentially undermine what their engaged co-workers accomplish.
But it’s not just the disengaged employees who need your attention. According to a recent UKG global study of the frontline workforce, 75% of frontline employees report feeling burned out at work. Plus, 46% of frontline employees say they’re tempted to quit on days when their job gets tough.
What can be done to help turn this situation around and prevent turnover? Above all, it’s about committing to creating a great workplace for all employees and a people-centric culture. That starts with solidifying trust within your organization, the foundation of a strong and healthy culture. Just like there’s no one-size-fits-all approach to fostering a great workplace, there’s myriad ways to fostering trust.
One way to increase trust is to have clear, consistent, and comprehensive communication among leaders and employees. Focusing on greater transparency and authenticity—from town halls to skip-level meetings—will help forge greater trust and engagement and could even create a greater sense of belonging for employees, which all help to boost retention.
As for tackling the workplace burnout epidemic, this too is a complex, multifaceted challenge with no single fix. However, our third Megatrend for 2025 may provide a plausible solution.
Megatrend #3: The Human-AI Advantage: Unlocking Productivity
The world of work is undergoing significant transformation due to rapid innovation and the introduction of technologies such as generative AI (GenAI). Although McKinsey finds a majority of organizations are already using AI in at least one business function, there’s still hesitancy among employees to fully embrace AI at work. To that end, UKG research reveals that three-quarters of employees globally say they would be more accepting of AI if leaders were more transparent about how their organization is using it.
Perhaps AI’s most significant value to an organization is its potential to augment and improve the productivity and performance of its workforce. It’s imperative for employees to be onboard with using AI at work because the technology relies heavily on up-to-date, quality data and human engagement for real-world success. In other words, humans help power the AI, and the AI helps empower humans. This necessitates an important connection between people and AI.
To operationalize AI technology like GenAI and harness its full potential in the workplace, organizations first need to ensure they have a quality data foundation to feed and train the technology. This includes investing in their people through skills enhancement and digital enablement, such as training programs on how to best work together with AI. You must also be fully transparent with employees (and customers) about the ways in which AI is impacting your processes, products, and, ultimately, your business.
When organizations successfully operationalize AI, the potential benefits are considerable for both the organization and the employees who use these tools. According to the UKG “AI at Work” study, three out of four AI users say it makes them more efficient and productive, makes it possible for them to spend more time on meaningful tasks, and it increases the quality or accuracy of their work.
Like AI, these Megatrends present boundless opportunities for organizations. Acting today will help set you and your people on a path toward success—not only in 2025, but in the years ahead.
The UKG team will be discussing these three Megatrends in greater detail throughout 2025. To learn additional strategies to help your organization navigate these developments, download the 2025 UKG Megatrends eBook.