5 Challenges Facing Employers In 2025

Imagine you’re a new entry-level employee in your first few months at work. You’re completing assignments on time and coming into the office four days a week per company policy, but you feel a bit lost because your manager hasn’t given you much feedback. When you stop to think of it, you’ve actually only met with her one-on-one twice since you started three months ago.

Now imagine you’re that entry-level employee’s manager. With 20 direct reports, you’re barely keeping tabs on who’s doing what and find it difficult to schedule regular one-on-one check-ins. To keep people aligned and engaged, you hold weekly team meetings and have an open-door policy where people can swing by to chat—though, with the hybrid schedule your company allows, it’s tough to coordinate who is in the office and when.

The above scenario is indicative of one of the biggest challenges facing workers today, according to a new Korn Ferry report that surveyed more than 15,000 workers worldwide, from newly-minted employees to CEOs. The results have been eye opening. From missing managers to generational angst and AI concerns, the workforce is evolving at a clip that makes it difficult for employers to keep pace. Indeed, we found five takeaways for employers to put on their radar.

1. Missing Managers

It’s no surprise that in recent years, many companies have cut middle managers from the ranks to reduce labor costs. In our survey, 41 percent of U.S. workers reported a reduction in managers at their companies, which has led to them feeling directionless. At the same time, leaders feel increasingly unable to handle the work in front of them, with 43 percent of senior executives doubting their ability to fulfill their responsibilities. This has led to some leaders rethinking whether flatter is actually better.

2. Generational Angst

One of the unintended consequences of flatter organizations may be the way generations interact and view the workplace today. Three out of four Gen Z workers say they struggle with cross-generational collaboration, contrasting sharply with how nearly 50 percent of Baby Boomers reported no such issues.

The way I see it, the newest generation of workers is yearning to be taken under someone’s wing. And yet, because there aren’t enough managers to do this, understanding what good collaboration, communication and performance looks like is a lofty aspiration instead of a rite of passage.

3. Salary Squeeze

Not surprisingly given the rise of economic uncertainty, today’s workforce is fretting heavily over job security and pay—regardless of age. The study found the rising cost of living has 72 percent of U.S. workers worried their pay isn’t keeping up with the times and 35 percent of workers feel they’re paid below the value of their skills. This data puts leaders in a bind; paying people well but offering poor job security doesn’t work, nor does underpaying people but providing better job security.

4. Hybrid Headaches

If you want to attract or retain great talent, flexibility is paramount to workers. While most U.S. employees prefer remote or hybrid work, only 32 percent have access to it. This factor is so important to workers that 58 percent of people said they would stay in a job they hate if it allowed them the flexibility they need. If that doesn’t stop leaders in their tracks and prove the need for more hybrid or remote arrangements, I’m not sure what will.

5. A New (AI) World Order

While U.S. employees are generally optimistic about AI, concerns about job displacement persist, and there’s a large disconnect between leaders’ AI strategies and employees’ awareness of them. When asked if they thought their leaders understood AI, 56 percent of employees said they agreed, compared to 78 percent of senior executives. And while 70 percent of leaders believe they have an AI strategy, only 39 percent of employees agreed their organization did.

The data show senior leaders need to ramp up their awareness and understanding of AI and articulate to their employees at all levels how AI will affect the organization–or risk being overtaken by the technology.

The Path Forward

When put together, the study’s findings point to several areas of improvement for leaders to explore. First, it may be worth reconsidering how your firm whittled down the number of manager roles to the nub; sure, it saved quite a bit of money to take away those higher salaries, but the short-term savings may be costing your company more in inefficient operations and inadequate training for both new hires and future managers.

It’s also clear that leaders cannot afford to communicate poorly when it comes to AI and paychecks. The concern over both is leaving workers fretting about their future and redoing their resume for the umpteenth time. It’s true, few firms can know exactly how they will deploy AI, but smart leaders already know—or should know—an outline of how their operations will run in the next few years. Similarly, addressing concerns about job security can help your workforce by providing avenues for them to upskill—or if, indeed, they should begin to look for different opportunities.

Finally—and perhaps most importantly—the message from our study is that leaders cannot assume they know the wants and needs of their employees. They’ve tried that and mostly failed. With five generations in the workforce and many organizations operating globally, a one-size-fits-all approach to employee engagement and performance isn’t going to work. Like great product teams, leaders need to view their employees as customers, finding out what motivates them, their style of learning and their preferred methods of feedback. This simply can’t be done with a bevy of direct reports. It takes time and a variety of techniques to cultivate quality work relationships.