The U.S. workplace is in the middle of a seismic shift—and small and midsize businesses (SMBs) are feeling the tremors first. According to TriNet’s State of the Workplace 2025 research, several forces are reshaping talent expectations at once: soaring AI adoption, a brewing Gen Z retention crisis, widening skills gaps, the rise of 24/7 HR expectations and a growing disconnect in what benefits employees value. Together, these trends paint a picture of a workforce seeking empowerment, clarity and support in fundamentally new ways.
AI Is Now a Workplace Norm—Even for Sensitive HR Tasks
AI has entered its mainstream moment. 94% of employers and 84% of employees have used AI on the job, comparable to the ubiquity of email. What’s most surprising is how they’re using it. Employees increasingly turn to AI for sensitive HR needs—performance reviews, personal questions, even interpersonal conflicts—with “Never” responses dropping by half in just one year.
Employer comfort is rising just as quickly: acceptance of AI used to support performance reviews jumped 46% and support for AI in interpersonal HR situations surged 50%. This suggests a cultural shift with employees beginning to view AI not just as a back-office tool but as an always-available, low-pressure first stop for help. SMBs that build transparent guardrails and human oversight into their AI use may gain an edge in trust and experience.
Gen Z Confidence Has Collapsed—Driving a Turnover Spike
Perhaps the most urgent warning in the 2025 data is generational. One-third of Gen Z employees plan to switch jobs within six months, up from 25% the year prior. Meanwhile, their confidence in being able to succeed at work collapsed 20 points year over year, falling to just 39%.
Employers aren’t seeing the same red flags. Fewer than a third believe their Gen Z workforce is actively job hunting. This misalignment reflects what the report calls an “empowerment disconnect”—employees say mentorship, autonomy and growth path clarity are slipping, while employers believe they’re improving. This disconnect, unless narrowed, may accelerate early-career turnover well into 2026.
Skills Confidence Is Dropping—Even as AI Skills Become Essential
TriNet’s analysis shows employees and employers agree: AI expertise is now a core competency, rising more than 10 points for both groups year over year. Yet confidence in readiness is moving in the opposite direction.
Only 49% of employees feel equipped for their roles—down from 59%—while employer confidence rose to 46%. Gen Z once again shows the sharpest decline.
Adding to the problem is perception: 92% of employers say career paths are clear, but only 77% of employees agree and fewer than one-third confirm access to formal upskilling programs.
For SMBs, this suggests a critical need to pair AI adoption with visible, accessible skill-building support —or risk widening the readiness gap.
Employees Expect 24/7 HR—And AI Is Powering It
The workforce wants HR to operate more like consumer tech: on-demand, digital, always accessible. 59% of employees—and 62% of Gen Z—say HR should be available 24/7. Employers are close behind at 57%.
SMBs are responding with digital HR portals, AI-powered chatbots and outsourced HR solutions. Preference for AI-only HR support rose to 38% and AI is now used frequently for benefits questions, conflict support, and training.
The challenge? Rising employee concerns about bias, privacy and follow-through. The more HR goes digital, the more critical transparency and guardrails become.
Benefits Expectations Are Evolving Faster Than Employers Realize
TriNet’s data uncovers one of the most consequential perception gaps in 2025: employees view core health insurance as baseline, while employers increasingly treat it as the centerpiece of their benefits strategy.
Employer “Extremely Important” ratings for medical insurance surged to 56%, but employee ratings dropped from 57% to 44%. Employees are shifting their attention elsewhere—to PTO (58% “Extremely Important”), mental health support, wellness programs, fertility benefits and family leave.
These emerging categories are becoming important areas for differentiation—especially for small businesses that may not always compete directly on salary.
The Through-Line: Employees Want Clarity, Confidence and Continuous Support
Across AI, skills, HR access, benefits and economic uncertainty, a single theme emerges: employees want to feel equipped, supported and understood.
- They want AI—but with transparency.
- They want HR access—but with fairness.
- They want growth paths—but with visible upskilling.
- They want benefits—but aligned with modern life.
- They want leadership—but with empowerment.
For small businesses, the opportunity is clear: adjusting to these expectations isn’t just an HR initiative—it’s a competitive strategy for retention, engagement and long-term resilience.
*This article draws from the TriNet State of the Workplace 2025 report and reflects TriNet’s perspective based on survey data from over 1,000 participants. The findings offer insights into employer and employee views within the U.S. small business community, highlighting trends in engagement, wellbeing, AI use and benefits understanding. Data may not represent all industries or regions and while accuracy is a priority, applicability may vary by organization.
© 2025 TriNet Group, Inc. All rights reserved. This communication is for informational purposes only, is not legal, tax or accounting advice and is not an offer to sell, buy or procure insurance.
