Current Conditions: Major Shift in Economic Sentiment Among HR Executives
After a period of relative stability in 2024, optimism about current economic conditions among HR executives has noticeably declined. Few HR executives rate economic conditions as good or excellent. Instead, the majority view conditions as either fair or very poor or poor. Currently, 45% of HR executives rate economic conditions as fair, while 43% rate conditions as poor or very poor (38% poor, 5% very poor). Only 13% of HR executives have a positive view (12% as good, <1% as excellent).
This marks the most significant shift in sentiment since late 2022. Compared to Q1 2025, the percentage of executives rating conditions as good or excellent has dropped by 15 percentage points. Meanwhile, those viewing conditions as very poor or poor have risen sharply by 30 percentage points, and fair ratings have decreased by 14 percentage points. These changes point to a notable decline in economic confidence among HR executives.
Economic Forecast: Majority Expect Poor Conditions Ahead
Over the past two years, HR executives have most commonly expected fair economic conditions ahead. However, in Q2 2025, the majority of HR executives (53%) expect poor or very poor economic conditions in the next six months. In a stunning shift, forecasts of poor or very poor increased by an unprecedented 39 percentage points. Less than 1 in 6 (15%) hold a positive outlook for the next six months, a 21-percentage-point decrease from the previous quarter, while about 1 in 3 (32%) expect fair conditions, a 19-percentage-point decrease. These significant declines may stem in part from the announcement of large-scale tariffs by the Trump administration, coupled with the resulting stock market volatility observed during this period.
Attend SHRM25
At SHRM25, hosted in beautiful, sunny San Diego, you have an unmatched opportunity to connect with top industry experts and peers who understand your challenges.
Business Forecast: Declines Expected in Growth and Investment
Aligned with the assessments of economic conditions, HR executives are less likely to expect an increase in revenue, profits, or capital expenditures over the next six months, with the percentage reaching record lows or close to record lows since tracking began. Overall, this reflects a pessimistic outlook about business performance over the next six months.
- Revenue: 40% of HR executives expect an increase (a 15-percentage-point decrease from Q1).
- Profits: 34% of HR executives expect an increase (a 12-percentage-point decrease from Q1).
- Capital expenditures: 32% of HR executives expect an increase (a 9-percentage-point decrease from Q1).
| Increase of over 20% | Increase of 10%-20% | Increase of less than 10% | No change | Decrease of less than 10% | Decrease of 10%-20% | Decrease of over 20% | |
|---|---|---|---|---|---|---|---|
| Revenues | 1% | 14% | 25% | 25% | 18% | 11% | 5% |
| Profits | 1% | 9% | 24% | 30% | 22% | 10% | 4% |
| Capital Expenditures | 3% | 9% | 20% | 43% | 12% | 8% | 6% |
SHRM Total Rewards Specialty Credential
Design competitive compensation and benefits programs that boost employee engagement with the SHRM Total Rewards Specialty Credential.
Methodology
The CHRO Outlook survey is a research study conducted quarterly. The survey was fielded electronically using the SHRM Voice of Work Research Panel to U.S.-based HR executives and senior HR executives (VP+). Respondents represented organizations of all sizes and across industries.
| Quarter, Year | Sample Size (n) | Fielding Dates |
|---|---|---|
| Q4 2022 | n = 241 | 12/01/22 - 12/22/22 |
| Q1 2023 | n = 249 | 03/06/23 - 03/21/23 |
| Q2 2023 | n = 199 | 06/08/23 - 06/16/23 |
| Q3 2023 | n = 536 | 08/30/23 - 09/11/23 |
| Q4 2023 | n = 376 | 11/17/23 - 11/22/23 |
| Q1 2024 | n = 391 | 01/03/24 - 01/10/24 |
| Q2 2024 | n = 352 | 04/15/24 - 04/24/24 |
| Q3 2024 | n = 339 | 07/17/24 - 07/25/24 |
| Q4 2024 | n = 320 | 10/16/24 - 10/25/24 |
| Q1 2025 | n = 323 | 01/13/25 – 01/21/25 |
| Q2 2025 | n = 353 | 04/08/25 – 04/20/25 |
Read the Q2 2025 series:
CHRO Employment Outlook | CHRO Economic Outlook | SHRM Hiring & Retention Difficulty Indexes