Current Conditions: Economic Sentiment Trends Negative, Leaning Toward Fair
After a major shift toward a negative outlook in Q2 2025 and a return to average in Q3 2025, positive ratings among HR executives declined in Q4 2025 while negative and fair ratings increased. Currently, 54% of HR executives rated economic conditions as fair, while 26% rated conditions as poor (23%) or very poor (3%). Still, about 1 in 5 HR executives (21%) have a positive view (19% as good and 2% as excellent).
This marks three straight quarters of large shifts in sentiment, signaling uncertainty. Compared to Q3 2025, the percentage of executives rating conditions as good or excellent decreased by 8 percentage points. Meanwhile, those viewing conditions as poor or very poor increased by 5 percentage points, and fair ratings increased by 4 percentage points. These changes point to a noticeable shift toward a negative or fair perspective among HR executives. These ratings are not as poor as they were in Q2 2025, but they are indicative of continued unpredictable market conditions.
Economic Forecast: Pessimism Returns as Outlook Leans Negative
In Q4 2025, HR executives showed a more negative outlook than last quarter. Over 1 in 3 (37%) said they expect poor or very poor economic conditions in the next six months. This marks a modest 4-percentage point increase from Q3 2025. Positive expectations have also fallen, with 23% now anticipating good or excellent conditions, down 6 percentage points. Meanwhile, 40% expect fair conditions, a slight increase of 2 percentage points. The shift reflects a move toward a more negative outlook among HR leaders, although not as extreme as in Q2 2025.
HR executives’ comments illustrate the range of sentiments reflected in the data:
- Positive ratings: “The markets are increasing, and I think public sentiment will eventually follow.”
- Fair ratings: “The economy is experiencing a slowdown in certain sectors, such as construction, due to factors like tariff uncertainty, which has led to job and project value decreases. Overall, it is a resilient but complex economic environment with both expansion and softening occurring simultaneously. Unemployment is low, but there is still uncertainty.”
- Negative ratings: “The stock market seems over-valued, inflation continues to be high, there are lots of signs of cracks in the economy and employment openings are starting to lessen.”
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Business Forecast: Stable Expectations of Growth and Investment, Although Lower than Q4 2024
Unlike the larger shifts observed in the economic outlook, HR executives have more stable expectations for business performance over the next six months. Anticipated increases in revenue fell slightly, while profits and capital expenditures remained the same in Q4 2025 as in Q3 2025. Overall, these projections remain well below the levels typically seen in recent years. This suggests that while the outlook is not as optimistic as it has been in the past, HR executives are feeling similarly to how they did in Q3 2025 when it comes to business performance.
- Revenue: 43% of HR executives expect an increase (3 percentage points fewer than in Q3 2025).
- Profits: 39% of HR executives expect an increase (no change from Q3 2025).
- Capital expenditures: 35% of HR executives expect an increase (no change from Q3 2025).
| Increase of over 20% | Increase of 10% to 20% | Increase of less than 10% | No change | Decrease of less than 10% | Decrease of 10% to 20% | Decrease of over 20% | |
|---|---|---|---|---|---|---|---|
| Revenue | 2% | 10% | 31% | 31% | 16% | 7% | 4% |
| Profits | 1% | 9% | 29% | 33% | 17% | 7% | 4% |
| Capital Expenditures | 3% | 8% | 24% | 46% | 11% | 6% | 3% |
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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 across multiple industries.
| Quarter | Sample Size (n) | Fielding Dates |
|---|---|---|
| Q4 2022 | n = 241 | Dec. 1-22, 2022 |
| Q1 2023 | n = 249 | March 6-21, 2023 |
| Q2 2023 | n = 199 | June 8-15, 2023 |
| Q3 2023 | n = 536 | Aug. 30-Sept. 11, 2023 |
| Q4 2023 | n = 376 | Nov. 17-22, 2023 |
| Q1 2024 | n = 391 | Jan. 3-10, 2024 |
| Q2 2024 | n = 352 | April 15-24, 2024 |
| Q3 2024 | n = 339 | July 17-25, 2024 |
| Q4 2024 | n = 320 | Oct. 16-25, 2024 |
| Q1 2025 | n = 323 | Jan. 13-21, 2025 |
| Q2 2025 | n = 353 | April 8-20, 2025 |
| Q3 2025 | n = 307 | July 9-21, 2025 |
| Q4 2025 | n = 262 | Oct. 14-24, 2025 |
Read the Q4 2025 series:
CHRO Employment Outlook | CHRO Economic Outlook | SHRM Hiring and Retention Difficulty Indexes