Human Capital Intel - 2/25/25
CEO optimism and uncertainty relationship | Rising responsibilities for people leaders | GenZ zaps management | Temptation to declare war on your employees | A better RTO
Welcome to the latest edition of Human Capital Intelligence, your weekly brief synthesizing over 250 leadership, HR, and people sources to filter out the noise. As always, we would love to hear from you at ken@reyvism.com with questions you’d like answered or topics covered.
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By Ken Stibler; Powered by Reyvism Analytics
CEO optimism suffers from a lack of “confidence”
CEO optimism has reached its highest level in three years according to the Conference Board's latest survey, with 33% of chief executives planning to boost capital spending in the next 12 months. Yet this newfound confidence stands in stark contrast to the "pervasive ambiguity" plaguing the business environment under the Trump administration. While executives report brightening outlooks and reduced concerns about cyber threats and supply chain disruptions, they face unprecedented uncertainty regarding federal regulation, trade policy, immigration reform, and taxation.
January's NFIB survey showed 17% of small business owners believe conditions are right for expansion (up from just 4% months earlier), but job creation plans remain below levels typically seen during robust economic periods. Meanwhile, the Conference Board's Leading Economic Index declined last month as consumers turned more pessimistic about future business conditions.
“The situation for business is quite fluid, changing sometimes hour by hour."
Atlanta Fed President Raphael Bostic
I’ve highlighted this several times, and while it’s outside of traditional human capital news, the breakdown in the accuracy and clarity of market data leaves business planners in a haze. This paradoxical combination of rising optimism amid escalating uncertainty is particularly evident in small business, where sentiment improved dramatically after Trump's election before recently faltering.
Small businesses, lacking the pricing power and supply chain flexibility of larger corporations, find themselves particularly vulnerable. Some CEOs are already feeling the pinch, with one manufacturer expecting the new 10% China tariff to potentially wipe out as much as a one-third of 2025 profit margin. Other small firms report freezing expansion plans, raising prices, or scrambling to reconfigure supply chains amid fears of broader tariffs on the horizon.
Event government intelligence organizations are finding it difficult to keep an accurate picture of the world. We’re in a situation where events are accelerating, political and tech change is compounding, and the volume of available data is overshadowing the information that matters.
This disconnect between improving sentiment and deteriorating conditions on the ground creates a dangerous economic scenario. With instability becoming a top concern for 55% of surveyed CEOs, persistent business uncertainty hampers investment and potentially reigniting inflation. As one CEO puts it, "We are paralyzed as a company... we're just sort of in a holding pattern" – a sentiment that, if widespread, could undermine the very economic revival that CEOs seem increasingly confident about.
What’s Next: It’s tempting to label everything coming from Washington as “news” to be turned off, especially for services businesses few little clear passthrough. But today’s material price increases are tomorrow’s falling business services budgets. As the horizon-scanner in chief, sharpen your skill at pulling signal from noise and ensure that finance is tracking a large and diverse basket of leading, rather than trailing indicators, for you industry.
Increasing responsibilities mean people leadership has never been more important
People leaders have emerged as the crucial linchpin determining organizational success amid increasing volatility. New research from Owl Labs' reveals that employees rank supportive management as their second-most valued job reward, nearly equivalent to compensation itself. People leadership becoming a core concern comes as managers navigate a complex dual mandate: delivering strategic business results while simultaneously providing the emotional support and engagement that drives retention in an increasingly flexible work environment.
The strategic importance of HR departments has similarly transformed, with 71% now actively leading workforce planning. Yet traditional hiring methods falter—only 32% of HR leaders believe their current strategies effectively attract qualified talent. And organizations are pivoting to skills-based methodologies that demand sophisticated leadership to implement effectively. This evolution positions people leaders as architects of organizational strategy rather than mere implementers of policy, requiring a broader skill set that spans analytical decision-making, strategic vision, and emotional intelligence.
The shift comes at a point when leadership quality more directly determines competitive advantage. Organizations that invest in developing purpose-driven managers through tailored training programs, culture-building and change management consistently outperform competitors in customer loyalty and employee retention. As one CEO notes success will come to "companies that move thoughtfully, balancing innovation with responsible execution"—a principle equally applicable to the increasingly vital role of people leadership in navigating a VUCA business climate environment.
What’s Next: With executive turnover rising, the people function is now a long-term keeper of strategy, tech, institutional knowledge, and organizational adaptation. If you have an HR director in the stereotypical sense, it’s time to bring them into the operational fold.
Quote of the Week: Falling on Deaf Ears
“A warning for young workers who expect a raise and a shiny new job title every year: you just need to be patient in the journey.”
— Sarah Walker, Cisco’s UK Chief. Sarah spent 25 years at British Telecoms. Yet as the average job tenure dips below 2 years and nearly half of employees have been laid off, “just wait your turn” is even more unsatisfactory advice than it already was.
Reading List:
A better way to RTO according to McKinsey and HBR
Return-to-office mandates are failing to deliver expected results, according to compelling new research from McKinsey and Harvard Business Review that reveals similar burnout, attrition risk, and performance levels across in-person, hybrid, and remote work models. The critical issue isn't where employees work but rather the organizational health that underpins their experience: fewer than half of workers rate their companies as effective at collaboration, innovation, mentorship, and skill development – the very practices executives cite as reasons for returning to offices.
Is RTO relevant? Why ‘butts in seats’ don’t necessarily equate to business success. (WorkLife)
This disconnect is exacerbated by a significant perception gap, with executives drastically overestimating organizational effectiveness compared to frontline staff. McKinsey concludes companies should abandon one-size-fits-all location mandates in favor of strengthening these foundational workplace practices through specific enablers. While HBR found that clear goal alignment drives effective collaboration across all models. The leading organizations - remote or in person - are redesigning mentorship programs, investing in flexible learning opportunities, and creating purposeful work environments that maximize the benefits of in-person interaction.
What’s Next: Both research powerhouses conclude: presence without purpose fails to deliver on the promise of face-to-face work, if you are still somehow not convinced what to do, or in a struggle RTO push, refocus on workplace transformation – not location – to boost performance.
GenZ turns against middle management roles as talent fails to match with opportunities
Half of GenZ professionals are rejecting traditional middle management roles as "high stress, low reward," according to a Robert Walters survey of 2,000 white-collar workers. Rather than climbing corporate ladders through personnel management, these under-27 workers prioritize individual expertise development, work-life balance, and purpose-driven careers. This shift extends beyond Gen Z, with the pandemic prompting workers to reassess workplace priorities, while flatter corporate structures and technology have made alternative career paths increasingly viable.
The brewing management pipeline crisis coincides with alarming talent misalignment in critical industries, as YouScience research of 450,000 students shows significant percentages with aptitude, but no interest, in sectors facing labor shortages such as manufacturing, health, and IT. Without early career exposure connecting youth to promising fields, companies face imminent talent shortages.
What’s Next: Stronger mentorship programs, leadership development pathways, and a core competency in L&D are general purpose solutions to labor quality problems. While some organizations sit back and wait for schools to churn out better graduates, others will be making talent refinement a competitive advantage.
Don’t declare war on your employees
What should be an obvious point has become a leadership conversation after abrasive statements from executives at Meta, JP Morgan, and Amazon. Meta’s CTO told employees to "leave or disagree and commit". The comment comes as the company publicly branding its layoffs as targeted against “low performers” hundreds of whom hit back, sharing stories, publishing glowing performance reviews and internal emails.
Similar, Jaime Dimon’s secretly taped "I don't care how many people sign that f— petition," wasn’t a show of strength, it was a declaration war on employees. This public pushback damages your brand, undermines recruitment efforts, and destroys institutional trust. In a landscape where employees can instantly broadcast their side of the story, autocratic leadership doesn't demonstrate control – it reveals your vulnerability. Strong leaders don't silence dissent; they channel it productively before it erupts into damaging confrontations.
What’s Next: Things can be true yet still unproductive. The low performer issue here is one of them. With executive frustration rising, it’s understandable that it will boil over, but such outburst and explicit antagonism does long-term damage to culture, engagement, productivity, and longevity.
Data Point(s): People like remote more than you’d think
25%
The pay cut most employees would take to keep a remote or hybrid role according to the national bureau of economic research. The figure is much higher than previously assumed.
In Other News:
The Risk of Doing Nothing: How It’s Holding Your Business Back. (HR Executive)
Best Buy launches free degrees for full- and part-time workers. (HR Dive)
How Flunking a Personality Test Can Cost You Your Dream Job: The thing that prevents you from landing your next job might be your ‘fit’ or what a test supposedly reveals about it. (Wall Street Journal)
The Corporate Transparency Act Is Back On…Again: FinCEN has extended the deadline for most companies to file ownership information to March 21 in light of the latest ruling. (Wall Street Journal)
Employees are more unhappy and disengaged now than during the Covid-19 pandemic. (HR Brew)
Employers are ‘on notice’: EEOC declares focus on anti-American bias. (HR Dive)
Age discrimination payouts are getting bigger: High value cases of dismissed senior leaders show older workers must be taken seriously. (Financial Times)
Global tech spend to approach $5 trillion this year: Forrester. (CIO Dive)
Now That We Can Transcribe Work Meetings and Conversations, Should We? (Wall Street Journal)
Innovation and the cult of the firestarter: George Bernard Shaw was right — progress depends on ‘unreasonable’ people. (Financial Times)