In today’s uncertain economic climate, holding onto your best people isn’t just an HR goal—it’s a core business strategy. According to a landmark new study, employee retention now ranks as the second-highest operational priority for U.S. employers, right behind growing revenue.

The Gallagher’s 2025 U.S. Talent Benchmarks Report, which gathered insights from over 4,000 employers, reveals a seismic shift in the employee-employer relationship. The old rules of engagement are being rewritten, and organizations that fail to adapt risk falling into a costly cycle of turnover.

So, what’s changed? Let’s dive into the key findings.

It’s Not About the Corner Office, It’s About the Path Forward

For years, “trust in senior leadership” was the undisputed king of employee engagement drivers. Not anymore.

The report reveals a stunning development: “career growth pathways” have officially overtaken leadership trust as the #1 driver of employee engagement.

This signals a fundamental change in the modern workforce. Employees are no longer content to simply trust the captain of the ship; they want to know they have a hand on the wheel of their own careers. They’re prioritizing personal agency, skill development, and clear opportunities for self-improvement.

“We’re seeing a fundamental shift in what employees value — and it’s forcing organizations to rethink just about everything so they can keep their talent,” notes John Tournet, U.S. CEO of Gallagher’s Benefits & HR Consulting Division.

However, this doesn’t mean leadership is off the hook. Tournet adds, “More than ever, trust and overall confidence in leadership is having the biggest impact on employee engagement and ultimately retention.” Effective leaders are the ones who build the trust necessary to create and support those coveted career pathways.

The Burnout Crisis: A Widening Preparedness Gap

It’s no secret that burnout is a major concern. A staggering 67% of employers are worried about the impact of stress and burnout on their workforce. But here’s the problem: worry isn’t translating into action where it matters most.

The report uncovers a critical gap in organizational preparedness:

• Only 24% of employers provide mental health training for their managers, leaders, or HR teams.
• Less than half (45%) say their managers are well-equipped to refer employees to mental health services.

This leaves your frontline leaders—the people with the most direct impact on your team’s daily wellbeing—without the tools they need to help. While some organizations are offering helpful perks like stress management programs (32%) or dedicated mental health days (28%), these efforts fall short without empowering managers to be the first line of support.

Inclusion Remains a Priority, Now Powered by AI

In a turbulent world, inclusion and diversity (I&D) initiatives are being viewed as a stabilizing force. Nearly three-quarters of employers (74%) are actively implementing I&D programs in 2025, with large organizations leading the charge.

What’s new is how they’re doing it. Artificial intelligence (AI) is emerging as a powerful tool to advance equity by reducing bias in recruitment and helping to tailor engagement strategies.

But technology alone isn’t the answer. The report found that only 24% of employers train employees by embedding inclusive behaviors into their daily roles. This highlights a massive opportunity to connect the powerful insights from AI with meaningful human action.

“AI has the power to amplify inclusion, but only if it’s implemented thoughtfully,” says Tournet. “Left unchecked, it could perpetuate bias. But when paired with human creativity and empathy, AI can elevate equity, fairness and connection in ways we’ve never seen before.”

The Takeaway: It’s Time to Be Intentional

The message from Gallagher’s 2025 report is clear: the organizations poised to win the war for talent are the ones investing in what truly matters. By focusing on intentional engagement, proactive wellbeing support, and technology-enhanced inclusion, you can build the trust and resilience needed for long-term success.

To learn more about these trends, you can find the full Gallagher’s 2025 U.S. Talent Benchmarks Report, which is part of their 2025 Workforce Trends Report Series.