Introduction

Every year Zywave’s State of the Market Survey checks the pulse of U.S. employers. The 2025 edition captured responses from more than 1,000 organizations—92 percent of which employ fewer than 500 people—across multiple industries. Here are the five insights that rose to the top.

1. Economic Uncertainty Leads the Worry List

Almost 60 percent of employers cited economic uncertainty as their primary concern. With a new presidential administration, ongoing inflation, tariff volatility, and sector-specific layoffs, many leaders are tightening budgets and delaying long-range plans until the economic fog lifts.

What to watch:

• Policy changes that affect labor costs or supply chains
• Signs of a true recession versus a soft landing
• Cash-flow strategies that keep payroll and benefits stable even in choppy markets

2. Inflation and Rising Health-Care Costs Keep Pressure on Budgets

Inflation hasn’t vanished; it has simply slowed. Add the projected 7–8 percent hike in employer health-care costs for 2025, and finance teams feel squeezed from both sides. Many employers now:

• Increase employee cost-sharing on premiums or deductibles
• Redesign plans around consumerism and telehealth
• Double-down on wellness and chronic-condition programs to curb long-term claims

3. Compliance Risk Is Growing, Not Shrinking

More than one-quarter of survey respondents flagged compliance as a top challenge. Key pain points include:

• New federal employment-law changes
• More aggressive enforcement by agencies such as OSHA and the DOL
• Rapidly evolving diversity, equity & inclusion (DEI) requirements
• Heightened immigration-related audits

Action step: keep legal counsel or a trusted broker partner in the loop on every new regulation to avoid costly missteps.

4. Attraction & Retention Remain Critical Battlegrounds

Nearly 60 percent of employers still struggle to find and keep great talent—even though the labor market isn’t as chaotic as it was in 2022. Top response strategies:

1. Cost-effective engagement programs (flex schedules, recognition)
2. Competitive pay increases
3. Upskilling, mentoring, and AI-focused learning opportunities
4. Revamped onboarding to wow new hires early
5. Skills-based hiring that looks beyond traditional degrees

5. Strategic Workforce Planning Separates Winners From Losers

More than three-quarters of organizations hired within the past six months and most have not frozen headcount. Instead, they’re aligning hiring with long-term goals:

• Mapping critical roles to future revenue streams
• Balancing automation with human expertise
• Building resilient talent pipelines rather than reactive job postings

Key Takeaways for Employers

• Stay nimble. Budget for economic swings without slashing essential benefits.
• Educate employees. Help them become smarter health-care consumers to blunt cost increases.
• Watch the rulebook. Compliance lapses are getting costlier; proactive audits pay off.
• Invest in people. Engagement and upskilling cost less than turnover.
• Think long game. Workforce strategies tied to business objectives outperform short-term fixes.

Conclusion

Zywave’s 2025 survey confirms what forward-thinking employers already know: uncertainty is the new normal. Companies that stay informed, flexible, and employee-focused will weather 2025’s challenges better than those who stand still. Need help translating these insights into action? Our Policy Is Caring—reach out and let’s plan your next move together.