Find out how businessleaders and workers feel about the workplace amid uncertainty and cost-cutting.
Layoffs are on the rise, with 41% of organizations issuing them in 2025 compared with only 30% in 2024. What does this uncertain economic environment mean for human capital leaders as they try to shape resilient organizations in 2026 and beyond?
Join Diana Scott and guests Robin Erickson, PhD, head of human capital research at The Conference Board, and Matthew Maloof, researcher at The Conference Board Human Capital Center. They discusswhy hybrid work is increasingly popular, how cost-cutting is affecting culture and more, and the pandemic’s lasting effects on the workplace.
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Diana Scott: Welcome to C-Suite Perspectives, a signature series by The Conference Board. I'm Diana Scott, center leader of the Human Capital Center at The Conference Board and guest host for today's episode. Today, we'll be diving into the Reimagined Workplace of 2025: Managing Uncertainty, a new study from The Conference Board.
We're going to talk about how leaders and employees are navigating political, social, and economic changes in today's workplace. Joining me are Robin Erickson, head of Human Capital Research at The Conference Board, and Matthew Maloof, researcher with the Human Capital Center. Welcome, Robin and Matt.
Robin Erickson, PhD: Thanks Diana. It's great to be here.
Diana Scott: Yeah, it's nice to have you. So I'm going to start with you, Robin, cause you are the primary author of this longitudinal Reimagined Workplace study. And I want you to tell us about this report, cause it's been going on for a long time.
Robin Erickson, PhD: It really has. I was actually in New York the first week of March in 2020 when the mayor of New York declared a state of emergency. And a few weeks later, one of my colleagues came to me and said, "Hey, don't you think it'd be interesting to find out how organizations are treating their employees during this lockdown?" And I said, "Sure." So we actually had the first Reimagined Workplace survey in the field by the middle of April, and we published our first report by the end of May 2020.
Diana Scott: Wait a minute, the end of May 2020? But that's like a few months. That's amazing.
Robin Erickson, PhD: Well, it was a new land speed record.
Diana Scott: OK. Sorry to interrupt you, but it was incredible.
Robin Erickson, PhD: It was a new land speed record for survey research at The Conference Board at the time.
Diana Scott: OK, continue. Sorry.
Robin Erickson, PhD: No, that was it exactly. And so we followed it up that year, actually six months later in the summertime. We're like, you know, we're still in lockdown. Maybe this virus is still happening. And sure enough. So we did one in October that year, and then we did one the following year. So we did the Reimagined Workplace one year later, and then we've done it annually ever since.
And the tenure for an employee at an organization is three years, so we felt like we couldn't ask questions that started out like, "Compared to before COVID..." Three years ago, we redesigned the survey and have been asking questions with a shorter timeframe, not necessarily before COVID. But it really has become a barometer of how resilient and uncertainty are rewriting the rules of work.
Diana Scott: I know, and it's so interesting that COVID launched this, but it seems like the uncertainty just continues and it evolves, and it just keeps going and going so many years later.
And Matt, the report really notes that right now, we have a lot of political and economic uncertainty, but it's interesting that human capital leaders say they're facing the future with confidence. So why do you think the leaders are feeling really resilient at this moment despite that?
Matthew Maloof: I think at the most basic level, they have to be. And because of the constant change that's existing in the workplace, they have no choice but to be confident and to face it head on and be ready for the challenges in front of them.
And so they are just coming off of having the pandemic and needing to be ready for what is happening from today's world. And I think the other part is they're focusing on building that resilience and diversifying risk and making sure that they're not putting all of their eggs in necessarily one basket. And so they're prepped for the multiple different scenarios that may come to fruition in the future.
Robin Erickson, PhD: Change is changing, right? I mean, there's no stopping to the change. That's one of the reasons why we decided to continue this study was because the workplace continues to evolve, and so it's not surprising.
Diana Scott: Well, that is our favorite phrase, "Change is changing." And I think as I talk to CHROs, they say the pandemic really was a major change point for them. It really transformed how they thought about their jobs and what was required of them, and it transformed what they had to do and what the expectations were for them.
But then they said it never really—that expectation continued to evolve, and they never went back. It never got back to normal. So you're right. Change is constantly changing. So, you know, Robin, I think one of the things that is really one of the biggest forces today, though, that is shaping our workplace today is really government policy. I mean, we hear about immigration trade, AI, DEI programs, and so many, so many more. So which one of these policies do you think will have the most significant long-term impact in the workplace?
Robin Erickson, PhD: Well, I'm quite sure you guys can all disagree or agree with me, but feel free to disagree. But I think that AI is the most important issue right now that's going to be reshaping the workplace. Because immigration and trade, they matter in terms of what work is done. But AI will change how the work is done at many, many levels.
Diana Scott: That's interesting. So you're right, trade will change what work is done. Immigration will change what work has done. I guess it will also change how work is done.
Matthew Maloof: I think the big part there is it changes who is doing the work.
Diana Scott: Who is working.
Matthew Maloof: I can definitely see the AI piece as the foremost, but I think I would choose immigration if I had to bet on which one I think will be the most important for the workforce. Just because of, we know that there are going to be talent shortages. And we know that organizations are going to want to find the best talent around, and the immigration policy is going to directly impact how they get the talent to do the work that is changing.
Diana Scott: And where are they going to come from?
Matthew Maloof: Yeah.
Diana Scott: Where are we going to get that talent?
Robin Erickson, PhD: Or perhaps we don't need as many workers because AI has—
Diana Scott: There you go!
Robin Erickson, PhD: —actually been able to replace a lot of the more automated or more repeatable functions. I think AI will replace those.
Diana Scott: OK. So folks, you heard it here. I mean, these are the debates that are happening in the workplace now and in the C-Suites all across the globe right now. I think those are the debates that are happening. People are asking, what is AI going to do? Is it going to replace workers? Is it going to improve productivity? Is it going to augment the work? Is it going to make it easier for us to replace those workers? And where are those workers going to come from? You're right.
Robin Erickson, PhD: Is it going to shorten the workweek? There's been a lot of conversation about four-day workweeks, and I saw yesterday—
Diana Scott: Oh my goodness, yes.
Robin Erickson, PhD: There was something published around a three-day workweek, and I'm like, I don't see that happening anytime soon, but.
Diana Scott: Well, they're testing it in Europe.
Robin Erickson, PhD: Three days or four?
Diana Scott: Four. Not three.
Robin Erickson, PhD: Not three.
Diana Scott: No, not three. I don't think three is coming. OK, we've got to get off this topic. I've got a question for you, Matt.
So the study shows that recruitment and retention challenges are different for professional workers versus industry and manual services workers. OK. Can you explain that to me? Why are those patterns diverging, and do you see what risks they pose for the employers?
Matthew Maloof: I think the immediate answer is definitely, the risk will be cost. If recruitment and retention are not high for your organization, you'll have higher turnover. And that will lead to needing to onboard new folks and help get them back up to full productivity, which takes time in and of itself. And so you're spending all these resources to find new talent and bring them up to speed.
But in terms of why the differences arise, I think part of it is that that talent shortage that we talked about a little bit earlier, with the policy around immigration, is that it's going to be important to find the talent that you need for the tasks that you're looking to do.
So if your organization is endeavoring on this AI transformation, right? Finding that AI talent is going to sometimes necessitate recruiting new folks. And are the folks that you have at your organization staying, are they being retained with the skillset that you've invested in them? Are they looking to go to other organizations that can offer them something different?
And so I think it's a double-edged problem, but the important part is remembering where your organization is at and the workforce that you have is going to necessitate having different strategies. And so if I have a manual or industry service work organization, the strategies that I'm going to want to deploy may not be the same for those who have more of a professional or office worker population.
Diana Scott: Yeah. So can you, I mean, I don't know if you have to dig into the details when you think about manual and service workers versus professional. Were there differences by industries then? Does it matter, like manual service, are there certain industries where that's harder? Do those details matter? Professional services, are there some where it's harder to get, it's easier to retain, it's harder to retain?
Matthew Maloof: For sure. It definitely does. And so when we looked at the split up, we found that retention for those manual and industry work organizations was harder for them. So we were clearly seeing a problem that they were reporting to us, while professional office workers were saying, no, we have an easier time retaining talent. And so they're at different points in their journey.
The positive of all of this is that we saw, after the COVID years, that it has gotten easier for both of them. It's still not in a great place, but it's not nearly as bad as it was three years ago. So there's definitely movement in the right direction. It's just how fast is that movement, and what can we do to speed it up?
Robin Erickson, PhD: Well, and I think the labor shortages that we were just talking about will affect going forward. Because I think we were surprised to see, back when we first did our survey, I think we were a little bit surprised to see that it was retention was a fair amount less difficult for the professional and office workers. But the industry manual services workers, they've just had a rough time throughout all the years that we've done the survey. So we actually have the longitudinal data there.
Diana Scott: Yeah, we have definitely seen that. But Robin, you've always said, I mean, we saw the Great Resignation, and what was it, 2022?
Robin Erickson, PhD: Yep, right around there.
Diana Scott: We were trying to predict whether there was going to be another Great Resignation, and I think we're all backing off of that now, aren't we?
Robin Erickson, PhD: So I'm not predicting it will be anytime soon. But I do believe that we will have a Great Resignation 2.0 at some point in the future. I think we saw the first Great Resignation because workers want a different flexibility than their organizations were offering. And I think that right now, people are, especially in the professional space, I think they're worried about their jobs going away, because there's definitely more layoffs, I think, in the professional side.
But I don't know that people have the flexibility that they want. And I think we've found that flexibility has become a tool in retaining employees. It's a benefit, so it can become part of a compensation package. And that flexibility really does lead us into hybrid.
Diana Scott: Well, let's talk a little bit about that, because I know that your report continues to show that hybrid is now the predominant workplace model: 57% of leaders say that it's their main arrangement, and we always say hybrid is here to stay. I mean, that's been my mantra. So what do you think is driving that permanence, but what challenges still remain in making it work?
Because we do see a lot of leaders, very vocal ones, talking about return to office and mandates and all sorts of things, and you've been writing a lot about it.
Robin Erickson, PhD: I think that hybrid work has become the default, to be very honest. We were surprised to see that number go up from 40% last year. Hybrid went up 17 percentage points. And the thing that I think is important when you want to say, "Oh yeah, Robin, there's so many organizational leaders who are forcing this return-to-office model." When you talk about hybrid, it could be one day a week working from home or one day a week working in the office.
So those in hybrid includes all of those different ones. So RTO is not necessarily different than hybrid. So I think that's part of it. And also the fact that I was just mentioning, that I do think flexibility has become a benefit. I think a lot of people are still asking about it when they join an organization.
And I think that the better leaders can get about mandating specific days in the office. For example, if you have a team, and you tell your team everybody has to go in the office two days a week and everybody picks a different day of the week, then you're still going to end up on Zoom calls. And it won't be any fun for the people in the office because they'll have to either use earphones or go find a closet or whatever.
So I think that it's really important to treat the office space, to make sure that it's coordinated. And in fact, I can't take credit for this, but someone said that you should treat the office as the new off-site. Because remember, with an off-site, you would plan it, you would make sure everybody had the right things to do. You had a goal, you knew what was going to happen. And so one of the things that I've always felt was that it's really important for my team to actually be in the office on the same day and be able to learn from each other and do that in-person collaboration.
Diana Scott: Yeah. So it really requires that leaders be much more intentional about how they think about and plan that time together so that the time together in the office is meaningful.
Robin Erickson, PhD: Exactly.
Diana Scott: Right. And the work that's done in the office is meaningful and thoughtful.
Matthew Maloof: We found in the study, as well, that when organizations mandated on-site work, that it was harder for them to retain talent. So just reinforcing that whole it can't be treated as business as usual. When people are coming back to the office, it should be designed with intention so that they are doing something meaningful there that is not just work that they could be doing at home. Because you're going to have some workers that are experiencing a little frustration if it's just go back and just be on calls, or go back and just keep doing the work that you could have been doing without the commute that you had in the morning or in the afternoon.
Diana Scott: Very well stated. Thank you, Matt, for that.
Robin Erickson, PhD: But I just add that's also why I'm predicting a Great Resignation 2.0 because I think that when people feel comfortable quitting their jobs, trying a new one, it's a risk whenever you do it, I think they will. Because I think they'll want different flexibility, and I think whether or not an organization provides that flexibility will become a selling point or part of the employer brand for those organizations.
Diana Scott: And to punctuate that, the organizations that treat those arrangements and think about, in very intentional ways, how they treat the time in the office, will also be winners in that outcome.
Robin Erickson, PhD: Exactly. I agree.
Diana Scott: OK, so we're going to take a short break and be right back with more of my conversation with Robin Erickson and Matt Maloof.
Welcome back to C-Suite Perspectives. I'm your host, Diana Scott, center leader of the Human Capital Center at The Conference Board. I'm joined by Robin Erickson and Matt Maloof.
OK, Matt. We've had a really interesting conversation so far, and one of the things I thought was really interesting is that employees report being more positive about their experience on productivity, engagement, and belonging then leaders give them credit for. What do you think explains that perception gap? And more importantly, what do you think leaders can do to bridge it?
Matthew Maloof: I think one explanation for why the gap exists is that leaders in many organizations often rely on lagging indicators. And so something like an engagement score that you receive at the end of the year, or maybe every six months or quarterly, will tell you how workers felt at a time, but they won't tell you necessarily how they feel in the current moment.
And so it can be a little harder to do something about the issue when you're not getting current or most up-to-date information. I think another part of it is that oftentimes, people are expressing the outliers of their experience, either the really good or the really bad. And so when they take those surveys—let's say you're doing that at the end of the year or the end of the quarter—they're thinking, OK, what really bad thing happened this year, or what really good thing happened this year, and how did that impact my experience? Rather than capturing the little wins that happen every single day.
And so I think in terms of how can they bridge that gap, I think one is to focus on building an organization that appreciates those little wins. Did my manager say I did a good job today? Did someone congratulate me after a meeting? Those small wins can add up after time and can bridge the gap between whether you have a really big success at the end of the year or you don't.
And the other part is to diversify how we're collecting information. Surveys are a great way and conversations or focus groups with staff is also another great way. But the point is to not rely on one single method. You're collecting data from a bunch of different ways, and I know that's an arduous process, right? Everyone's tired of surveys, everyone's tired of data collection.
Diana Scott: Survey fatigue is real, right?
Matthew Maloof: It is. It is, absolutely. But it's necessary to capture that minute information, that more nuanced piece. And it doesn't necessarily need to be a survey. If I have a conversation with my executive team or with my managers and say, how are your teams feeling? Like, what's going on with them at this moment? Rather than necessarily waiting till the end of the year, seeing that engagement score, and then trying to do something about it then. Being more proactive as you can be with the time that you're given, I think, is an important part of bridging the gap.
Robin Erickson, PhD: I think we should also talk about the fact that, in our survey, we found that leaders are not necessarily aligned with the workers in terms of a few specifics, right? The workers reported higher engagement, productivity, and intent to stay than the leaders were giving them credit for. Do you want to comment on those?
Matthew Maloof: I think part of that has to be with a little bit of self-respondent bias, right? If my manager asks me how productive do I think I am, I'm probably going to think, well, yeah, I'm really productive. I'm great at my job. And so I think there, a difference in how are we defining productivity. So I think that that could be attributed to explaining that gap.
But engagement is another one where it's interesting. What does engagement look like? If I have a hybrid organization, I may not be necessarily seeing the engagement that my workforce is participating in. And so I may not have a full picture to understand how engaged they really feel like they are.
Diana Scott: That's interesting. Yeah. They might not be paying attention to the right markers.
Robin Erickson, PhD: Correct.
Diana Scott: Who knows?
Robin Erickson, PhD: Well, and at the end of the day, I think it's just important for organizations, if there is a gap between their leaders and their workers in terms of the perceptions around any of these things, right? Productivity, engagement, well-being. I think it's really important for the organization to step back and say, OK, what do we need to do about this? There's a difference, but also what do we need to do? And is it high?
Diana Scott: Whether it's good or bad, right? Positive or negative, there's a gap.
Matthew Maloof: Are we focusing on the right variable. And it's important to remember that engagement, sense of belonging, inclusion, mental health, well-being, these are multiplicable variables, right? They don't exist in a constant state. They affect each other. So any energy I spend on increasing, for example, engagement will reap positive benefits amongst the rest of the metrics. And so it's important to remember that there's no pointlessness to this, there's no lack of a need to do it. I really only reap rewards if I focus on improving them.
Diana Scott: Well, yeah. We always say if you improve engagement, you improve retention. If you improve retention, you improve productivity. And you improve productivity, you improve—
Robin Erickson, PhD: Revenue.
Diana Scott: Results and revenue. And yeah, then your investors are happy. So all of that accumulates, so absolutely, yes. Robin, I think we saw in the report that it indicated that cost-cutting measures though are still pretty widespread. And I think we saw things like layoffs, restricted hiring, reduced travel, those were all pretty widespread, but unemployment still was pretty low at the time of this.
And I think unemployment is still pretty low, even though we see it. I think recently it's been creeping up very, very slightly. So how do you see those cost controls shaping workplace culture and also impacting employee morale?
Robin Erickson, PhD: Those are two different questions. And we did find that, we have longitudinal data for the last three years around how organizations are being cost-conscious. And we write in the report about how we think that this cost consciousness is reshaping the culture into chronic caution and frugality.
We've seen that, I think especially since the inauguration this year, that organizations have been afraid to spend any money. And so, I just think that there's that sense of we're not sure what's going to happen. We know we can get through it. As Matt said at the very beginning, we know we can get through that change, but we're not sure what it's going to be. So maybe we'll just hang onto the money.
The first three that you mentioned are actually the ones that have been the highest in the last three years. So that's our reducing travel, restricting hiring, and layoffs. There was an interesting point this year around the layoffs because this year, 41% of the organizations we interviewed said that they had conducted layoffs, and that was up from 30% in 2024.
Diana Scott: That's a pretty big tick up.
Robin Erickson, PhD: It's a decent size tick up. And again, that could be another one of the reasons why people don't want to move right now. They don't want to leave.
Diana Scott: Yeah. They're staying put.
Robin Erickson, PhD: They're putting up with whatever flexibility their organization's offering. So, we have to remember that there's always the economic indicators. We've talked about the fact that there are labor shortages, and I think that's very significant. That comes back down to when you reduce hiring, except that usually it's reduced hiring except for critical positions.
And so it's just important because when organizations are constantly trying to do more with less, in terms of people, in terms of resources, I think that it can weigh on morale and suppress innovation, which is where you were going with the second part of your question.
Diana Scott: Yeah.
Robin Erickson, PhD: I think it's important to remember that when you do frequent layoffs in an organization, it's going to undermine the morale and the commitment of your other employees, the ones who are still there, right? The survivors. And it could, if you're afraid that you're going to lose your job, you're maybe not being as innovative as you could be, as you might be, if you weren't afraid that you're going to lose your job.
And I think that even while reduced travel is increasingly normalized, given everything we can do remotely and on Zoom, for example, that I think it provides fewer opportunities for in-person bonding and mentorship and development.
So I think that there are costs for some of these. And I just think the biggest one is going to be that if an organization's constantly letting people go, the people who are left aren't going to be very loyal or maybe necessarily want to stay, because their jobs could be eliminated at any point.
Diana Scott: Yeah. I do think we're seeing many organizations with, we're seeing the labor markets tighten, slowing down. Organizations are being very cautious. They're not hiring, but also they're not necessarily laying off because they're trying to be very careful. They're being very cautious for the very reasons you said. I think they're trying to be careful just to see what's, you know, while they wait and see what's ahead, what lies ahead.
There has been a very cautious attitude. I think the report does conclude, number one, that certainly that the workplace was forever changed by the pandemic. That's certain. Yet perhaps that the pandemic made it, the workplace, stronger, perhaps more resilient because of it. Do you agree with that?
Robin Erickson, PhD: I do.
Diana Scott: I'm going to ask you both that question. Do you agree with that?
Robin Erickson, PhD: I do agree with that. I think that if anyone had asked the question to an IT team in January in 2020, could you get computers and get your whole workforce working remotely in a week, they would've said, there's absolutely no way.
Diana Scott: You're crazy.
Robin Erickson, PhD: You're crazy. And I mean, that would be a transformation of three months or whatever. And we organizations had to do it much more quickly. I live in Chicago, and I'll never forget the news just before the lockdown started in Chicago, I'll never forget the news clip where we actually saw somebody walking to the train station carrying their hard drive. And clearly that was important to them. God bless the cloud for those of us who didn't have to walk home with a hard drive.
But I do think that the workplace is stronger. And the other part of that is that we continually keep seeing not just black swans, but gray swans. There's also ugly swans. There's all of these things that are happening, and part of it's the change is changing, right? Change is changing so fast, and I think that people have to deal with these changes much more quickly, and I think that the workplace is stronger. But I'd interested to know what you think, Matt.
Matthew Maloof: I think so. I think at the very least, we saw a lot of meaningful work happen in the last five years in that organizations made difficult choices, but made those difficult choices, trying to make them as best as possible for as many people as they could.
Robin Erickson, PhD: And as fast as possible.
Matthew Maloof: And as fast, yeah, as fast as they could with the circumstances that were around them at the time. And so if we want to say that they're stronger, I mean, lessons were learned, and that knowledge and experience can't be thrown to the side or wasted. It's important to say, OK, this thing happened. We've learned all this stuff. We're not going to forget about this stuff, and now we're going to use it to keep pushing forward.
Diana Scott: It sounds like we've created resilient organizations, and that's served us well. So what do you think the resilient organization of 2026 looks like? What do you expect to see next year and beyond?
Robin Erickson, PhD: I think that a big focus will be on AI, and there's two pieces of it. There's AI for HR, the technology that HR needs, but also how is HR going to help train the rest of the organization in the AI skills? And we talk about people's jobs changing. Well, if your job is going to change, you're probably going to need some training to figure out how to do your new job. And so I think we'll be talking a lot about AI, but probably on two different levels.
Diana Scott: Any final words, Matt?
Matthew Maloof: I think the biggest one would be flexibility. And I don't necessarily mean flexibility around hybrid alone. I think flexibility around everything. It's understanding that this one-size-fits-all model of work is just not going to work for the different employees that I have in my organization. Maybe I can't say you can work at home three days a week, but maybe I can say, oh, you can come in an hour later, spend that morning doing whatever you need to do. Or if you need to flex time, come and work these two weeks, and then if you need a week off, there's a lot of examples for how that flexibility can exist.
And that starts with talking to your workforce and seeing what do they need, and trying to meet them where they're at. And just recognizing the change is happening, and I can't do anything to stop it. And if things are changing for my organization, imagine all the things that are changing in the lives of my workers.
Robin Erickson, PhD: I completely agree with you, Matt, and you made me think of something that we often talk about, but we haven't in this, which is we've been mostly talking about hybrid work, the ability for the professional and office workers to work remotely. That's not always the case, though.
And the other half of the organizations in this country that are industry and manual service workers, manufacturing, all of that. But they value flexibility, too. Those workers, the hourly workers, they value flexibility. They, as Matt was talking about, they really value being able to set their hours themselves or know in advance what their schedule is so they can plan doctor's visits or other things that they may need to do. So I think flexibility is a really good word. Maybe we just can't only associate it with hybrid. I think you're right.
Diana Scott: Great. And I think that's a good word to end on. And perhaps add in that is going to require that we have the leaders who are able to pivot to leading in a world that requires flexibility and resilience.
So with that, I want to thank you for joining me here in the studio today. And it was great to have you here.
Matthew Maloof: Great to be here.
Robin Erickson, PhD: Thanks so much for having us.
Diana Scott: And thanks to all of you for listening to C-Suite Perspectives. I'm Diana Scott, and this series has been brought to you by The Conference Board.
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