Social & workplace trends for 2025 and beyond

Editor’s note: This is the second installment of an annual 4-part series on the trends impacting small and midsize businesses. Here, we study social and workplace trends for 2025.

As we move further from the pandemic era, Americans are grappling with various challenges including the residual health crisis, economic volatility, geopolitical tensions (such as conflicts in Ukraine and the Middle East), and a range of other pressing social issues.

In addition to this strain, there has been a significant erosion of trust in key institutions such as government, higher education, large corporations and religious organizations. Americans are increasingly anxious about the upcoming presidential election, advancements in artificial intelligence and mounting financial pressures as we approach 2025. Employees are bringing their stress from home to work, and their stress from work back home.

More in this series

Ecological trends for 2025 and beyond

Population shifts

One of the most severe societal challenges is the emerging demographic crisis. Birth rates are steadily declining while life expectancy continues to rise, causing a rapid increase in the average age of the global population. The average median age in the U.S. is expected to increase from 39.5 to 44 by 2050.

According to Pew Research, the percentage of young adults without children who say they are unlikely to have them jumped from 37% in 2018 to 47% in 2023. In South Korea, which has one of the world’s lowest fertility rates, the government is proposing subsidies of up to $100,000 per couple to encourage childbearing.

This demographic shift poses a significant threat to retirement systems, as the ratio of workers funding pensions to retirees drawing on those funds becomes increasingly unsustainable.

Contributors and Recipients of Social Security

Source: Social Security Trustee Report

According to the Social Security Trustees 2024 report, the Trust Fund for Old-Age and Survivors Insurance (OASI) is expected to be depleted by 2033, and the Disability Insurance (DI) Trust Fund is projected to deplete around 2055. Addressing this imbalance will require bold Social Security reforms, a subject political leaders seem unwilling to take on.

Record immigration

Immigration into the U.S. is surging, and 2024 will mark a record for the percentage of the U.S. population born outside the U.S. About half of immigrants are from Latin America — 23% from Mexico, followed by India (6%) and China (5%). While a higher percentage of immigrants are of working age, they are also far less educated, forcing them into industries such as construction, janitorial, and restaurants. A disproportionate number settle in Florida, California, Arizona, New York and New Jersey.

Immigration Trends

Source: Congressional Budget Office

An important consideration for U.S. employers is that the U.S. Citizen and Immigration Service reports that it has reached the cap for H-2B visas for the first half of 2025. These targets could change based on the election outcome.

Health care costs

The rising cost of health care has become a crisis for employers. Following an 8% increase in 2024, PwC projects another 8% rise in group health care costs in 2025. This surge surpasses any increase seen since the Affordable Care Act passed in 2010, including during the COVID pandemic. Escalating costs can be traced back to the rising price of hospital care (up 6.3% in 2023) and the increasing use of expensive GLP-1 drugs commonly prescribed for obesity and diabetes (which cost an average of $11,000 annually and doubled in usage in 2023).

Estimated health care cost growth 2007-2025

Source: PwC Health Research Institute

In response, employers are placing greater demands on employee contributions to health care plans and taking a more active role in managing prescription drug costs, especially of “biosimilars.” Biosimilars are biologic medical products that are highly similar to an approved original biologic, or “reference product,” and are used to treat conditions like cancer, autoimmune disorders, and diabetes. While not identical to the original biological product, they have no significant differences in safety or efficacy. Biosimilars are typically more affordable than their reference products, offering potential cost savings of up to 30%, which could reduce healthcare costs and improve access to expensive therapies, especially for chronic diseases.

Workplace impacts on societal trends

Employee engagement has seen a notable decline over the past two years. While data from 2024 is still forthcoming, only 33% of employees reported being “engaged” at work in 2023, according to Gallup. We conduct extensive employee engagement studies within our firm, and even the employers of choice we work with are experiencing an erosion in eNPS (employee net promoter score).

Only 32% of Employees Are Engaged at Work

Source: Gallup

Key contributors to this decline include:

1. Inflation: Compounding inflation is hitting frontline workers particularly hard. According to Qualtrics, frontline employees are 14% less satisfied with their compensation than office-based staff.
2. Flexibility: Workers now demand more flexibility and those who are required to be in the office five days a week report significantly lower engagement. Engagement rates are 16% higher among employees working 1-3 days a week in the office compared to those working full-time in the office. Remote employees, however, often feel isolated and experience fewer advancement opportunities.
3. Connection: It’s critical that employers better understand the needs of younger workers — especially Gen Z, who crave connection and feedback. Companies prioritizing regular feedback loops and frequent engagement surveys see better results in employee satisfaction and productivity. Of note, over 1 in 5 Gen Z-ers identify as LGBTQ+, and they care much more about sustainability.

Housing affordability crisis

Homeownership is now out of reach for most Americans. The income required to afford a median-priced home has skyrocketed by 60% since January 2022, according to data from the National Association of Realtors. The premium to rent is now higher than at any time in history.

Housing Affordability

Source: Statista

As a result, companies are exploring alternative solutions, such as offering housing subsidies or adopting a four-day workweek to reduce the burden of commuting.

Erosion of trust and social connections

The pandemic left a lasting impact on social connections, with both marriages and casual relationships on the decline. This societal shift and lack of connection has several implications for businesses:

• Mental health challenges: The isolation caused by reduced social interaction has led to increased rates of mental health issues such as depression and anxiety. The mental health crisis, exacerbated by the pandemic, continues to contribute to higher rates of suicide and self-harm.
• Decreased consumer confidence: Consumers are becoming more cautious and selective.
• Social unrest: The upcoming presidential election and other societal tensions could lead to widespread unrest.

Playbook for 2025

Given these evolving social trends, business leaders should consider the following:

• Talent acquisition and retention: Focus on the three pillars — flexibility, competitive pay and growth opportunities. Most employers must conduct an annual compensation study. Employers can use their connections with employees as a competitive advantage.
• Flexible benefits: We see a re-emergence of more flexible benefits. In particular, employees value having access to more personal time off (PTO).
• Customer-centricity: Understand the shifting needs and preferences of aging populations and younger generations when crafting your offering and hiring and retaining staff.
• Risk management: Prepare for potential disruptions, such as economic downturns or social unrest. Maintain strong partnerships and contingency plans.
• Social responsibility: Embrace corporate social responsibility to build trust and goodwill with customers and communities. This must be done in a genuine way.
• Mental health support: Prioritize the mental well-being of employees by offering resources and programs that consider their needs.

By studying and addressing these societal trends, businesses can position themselves for sustainable growth in an increasingly complex world.

For more information on how these social and workplace trends will impact your business, check out these resources:

The Stay or Go Survey: The Growing Gap Between Employers’ and Employees’ Expectations

ScalabilityPro Perfect Calendar

Future-Readying Your Workforce: Embracing Technology And Change

Trend Report: Employee Retention

Trend Report: Make Employees Productive Everywhere

PwC’s Future Workplace Trends

McKinsey’s Insights on Healthcare Trends

Deloitte’s Global Human Capital Trends

Oliver Wyman’s Healthcare Shifts by 2035

World Economic Forum: Workplace and Social Trends 2024

McKinsey: US Healthcare Trends 2024 and Beyond

Deloitte Insights: Future of the Workplace

RAND Corporation: The Future of Work

0 views