This article is part of a recurring series highlighting recent talent mobility industry reports. If you would like the WERC editorial team to consider covering a specific industry report, email mobility@talenteverywhere.org.
With muted economic and job growth in 2025, American workers are under increasing financial pressure while also being concerned about job security. Inspirus’ 2025 Q3 Employment Engagement Trends report indicates that these pressures, coupled with artificial intelligence (AI) adoption and company expectations that human resources (HR) leaders do more with less, are leading to higher levels of burnout and historically lower levels of employee engagement. Known as “The Great Squeeze,” this era will require talent mobility managers and HR to navigate economic and employee uncertainty with clear communication, human-centered strategies, and steady leadership.
Confidence and Engagement at Historic Lows
Gallup reports that only 19% of employees are satisfied with their workplace, a drop from the pre-pandemic norm of 26% to 28%. Eighteen percent of employees surveyed are actively disengaged from their jobs, and just 31% say they are engaged at work. Part of the problem is the lack of learning and growth opportunities, as just 31% of employees felt those opportunities existed at their jobs in the past year. This dissatisfaction and disengagement has about 50% of U.S. workers actively job hunting, even though only 39% believe now is a good time to find a new job.
The tension between employees’ desire for change and the current economic uncertainty is further exacerbated by budget cuts that nearly half of executives are considering. For HR, those budget cuts could lead to fewer programs to boost employee engagement and satisfaction, adding increased pressure to workplace dynamics.
Burnout at a Breaking Point
According to Forbes, two-thirds of U.S. workers (66%) now describe themselves as burned out, a level higher than during the early pandemic. Part of that is due to financial burdens, with wages rising just 3.7% in 2025, lagging behind housing and utility costs. Higher debt and interest rates have added pressure, making financial wellness a top concern. Compounding workers’ budgetary problems are AI strategies that could lead to company and role restructuring and a lack of training or transparency about available mental health and other benefits.
All these concerns have raised workers’ anxiety about job security. Perceptyx found that 35% of employees and 45% of middle managers are now worried about job cuts, which has increased sharply since February 2025. Meanwhile, HR is caught in the middle of competing demands and feeling similar pressures.
Workers could turn to workplace benefits to cope with their concerns. The Hartford’s 2025 Future of Benefits study has found that the need for mental health benefits in particular is on the rise. The study indicates that 40% of Gen Z workers experience depression or anxiety multiple times weekly. However, 46% of those workers do not take advantage of available benefits because of perceived stigma related to mental health care, unclear time-off policies, and waitlists to see counselors.
Theresa Harkins-Schulz, senior vice president of customer experience and products at Inspirus, emphasizes the deeper roots of burnout: “Burnout doesn’t just come from being overworked; it comes from feeling isolated, undervalued, and disconnected from purpose. That’s where recognition plays a bigger role than many leaders realize.”
The AI Challenge
With AI reshaping workplace roles faster than employees can adapt, it’s no wonder that Inc. reports that 43% of white-collar professionals already fear AI could take over core parts of their role. Additionally, 56% of workers feel broad anxiety about their long-term job prospects. Much of that anxiety may be due to a lack of training. According to a survey from Jobs for the Future, just 31% of people indicate that their employer has provided them with AI training.
Without formal AI training and clear communication, employees face a significant skills gap, which could leave them feeling sidelined and disengaged. HR can step in with some low-budget actions to build AI literacy and maintain compliance with security and corporate policies:
- Setting Context: Communicate how each AI tool reduces low-value tasks and supports creativity.
- Tiered Training: Offer an “AI 101” course for all employees, with role-specific deep dives and ethical refresher courses.
- Hybrid Deployment: HR can partner with IT to design guardrails and training that sticks.
- Measuring Adoption: Make a case to prove return on investment (ROI) and adapt programs quickly.
AI can also empower engagement through personalized recognition. It can call attention to employee achievements and alert HR to possible signs of disengagement early enough for additional coaching opportunities. This enables HR to demonstrate a culture of responsible use.
The People-First Imperative
Like with AI challenges, HR needs to stay focused on employees. Even with smaller budgets, HR must resist the temptation to cut people-focused programs. Lionel Koch, chief financial officer of Inspirus, warns against such short-sighted cuts: “HR and business leaders tend to cut back on important people-focused programs, rewards, and recognition. This is usually based on the belief that these programs are nonessential, an easy way to save money, and difficult to measure ROI. While those cuts may seem justifiable on the surface, they often ignore the hidden costs tied to disengagement, turnover, morale, and productivity.”
Instead, HR can prioritize lower-cost, high-impact initiatives focused on employees’ daily realities:
- Financial literacy workshops, paycheck advance programs, or employee hardship funds.
- Flexible stipends that can cover essentials like groceries or transportation.
- Reset days, mental health days, or days with shorter meetings to combat fatigue.
- Consistent recognition moments embedded into daily workflows.
Koch adds, “Even small investments in programs like recognition can deliver outsized benefits, including improving engagement, reducing turnover, and strengthening the company’s appeal to future talent.”
Self-Care for All, Including HR
Burnout is a serious business risk, particularly if HR is impacted. If HR or talent mobility staff are burned out, it can have a destabilizing effect on the rest of the organization. HR is caught in the middle of executives calling for cost-cutting measures to achieve long-term strategy and employees who need support and stability. EY’s Chief Wellbeing Officer Frank Giampietro says, “We have to be sure we’re not just caring for our talent folks but that they’re caring for themselves and reinforcing that.”
HR teams need to be smarter in how they approach resources and metrics. HR leaders who invest wisely can:
- Automate repetitive workflows (from onboarding to engagement reporting).
- Streamline outdated review processes into lightweight check-ins.
- Build stronger metrics tied to employee experience outcomes.
- Partner cross-functionally with IT and business units to share responsibility for people initiatives.
- Audit current benefits offerings to determine which are underutilized and why.
- Leverage peer-to-peer recognition and milestone celebrations to boost morale.
- Provide managers and leaders with the tools they need to coach others through periods of change.
HR must use its resources intentionally. Lesa Blakey, vice president of people and operations at Inspirus, explains, “HR is no longer just administrative—it’s strategic, agile, and central to navigating today’s fast-changing business landscape.”
The U.S. workforce is caught in uncertainty, wrought with burnout and anxiety, but employees are still looking for growth opportunities. HR leaders and talent managers can take the reins and refocus their people-first investments. Recognition, financial wellness, workload management, and AI readiness will define which organizations can weather the Great Squeeze with engaged, resilient talent.