PREDICTION THREE: A gap between employee and employer perceptions of company culture will create challenges for improving engagement, well-being, and productivity.
Research from the Arbinger Institute reveals a disconnect in how senior executives view culture initiatives and how the rest of the company experiences them. Leaders see culture through the lens of intent, strategy, and programs. Employees experience them through impact, Shiers says.
“While leadership teams often believe their culture is well understood, research shows that 72% of frontline employees don’t fully grasp their company’s strategy,” Shiers explains. “That disconnect doesn’t mean disengagement, it means translation is missing. When employees can’t see how strategic intent connects to their own reality, clarity breaks down, and culture feels inconsistent.”
Perception gaps can grow quickly, and once they harden, they’re often hard to close, Monroe says. The best way to stay aligned is by listening—through observation, conversations, questions, and honest feedback.
To narrow the gap, Shiers says organizations should consider these three strategies.
Turn listening into action. Many companies collect feedback but fail to close the loop. Creating always-on systems through integrated pulse surveys, open forums, and AI-powered sentiment tracking can give leaders a real-time view of what employees are feeling—and then importantly, they need to act on it.
Equip managers as culture carriers. Managers are the single biggest influence on how employees experience culture, yet they’re often under-equipped to communicate it. Train middle managers to be confident communicators, so the culture message becomes consistent and credible.
Make employees co-authors of culture. The companies that thrive culturally are ones that focus on embodying culture, rather than simply promoting it. Investing in employee participation through role modeling, cultural ambassadorships, and employee resource groups can create a shared mission that enables employees to believe in what they help build.
“There are often disconnects between how senior executives view culture initiatives compared to how the rest of the company perceives them,” Tinch says. “There could be many causes behind this gap in cultural perception, but in most cases, the answers lie within an organizations’ level of free-flowing interactions between executives and the rest of the organization.”
Since senior executives are traditionally more focused externally and not so much internally, this gap is the natural outcome, Tinch adds. However, without intentionality surrounding “internal interactions,” this gap can grow into a full-blown disconnect.
“It’s not about how many programs a company can offer; it’s about offering ones that genuinely resonate with employees and align with the culture you are building,” Monroe says. “Investing in culture and wellness signals to employees we care about their experience. When people know we care, that builds trust, trust leads to engagement, and engagement leads to productivity.”
PREDICTION FOUR: As AI takes on more transactional work, human skills will define HR’s future impact—and skills-based hiring will be instrumental in attracting top talent.
Even as AI transformation accelerates, it does not replace the human judgment, wisdom, and experience necessary for most jobs, Bersin says. It simply replaces routine tasks. In every role as AI is introduced, it’s the humans who train the AI, check and interpret the AI for accuracy, and decide what to do with the information being generated.
Research from Workday finds that 81% of leaders believe adopting a skills-based approach drives economic growth by improving productivity, innovation, and organizational agility. HR leaders looking to adopt the approach should consider the following, explains Rosencrans.
Start with a clear skills framework. This should define the technical, behavioral, and leadership capabilities needed for success.
Use AI tools to assess, map, and match employee skills to business needs. Goal-setting and performance mapping can help employees understand where they need to develop and pursue training programs that specifically target those skills.
Offer upskilling and training. These are integral steps to ensuring employees hone current skills and develop new ones that will help them propel their careers forward and advance the business as a result.
Reimage job descriptions around skills rather than credentials. By promoting continuous learning, organizations empower employees to grow and adapt.
Research from TestGorilla finds 72% of employers and 82% of job seekers believe that holistic hiring that incorporates candidates’ skills, personality, and culture alignment leads to better hiring decisions and improved business outcomes.
“Sometimes the best talent can come from the most unexpected places,” Shiers says. “If a company focuses too heavily on a degree for hiring, they are missing out on potentially superb candidates who may have gotten their education or role-related experience through another channel. When building teams and culture, HR leaders and hiring managers should always be looking at the whole person rather than how they come across on paper. This starts with the hiring process.”