Current Conditions: Economic Sentiment Stabilizes After Q2 Dip
After a major shift toward a negative outlook in Q2 2025, positive ratings among HR executives have shifted back up to Q1 2025 levels, while negative ratings shifted down. Currently, 50% of HR executives rate economic conditions as fair, while 21% rate conditions as poor or very poor (19% poor, 3% very poor).1 Still, less than 1 in 3 HR executives (29%) have a positive view (28% good, 1% excellent).
This marks two straight quarters of large shifts in sentiment, signaling uncertainty. Compared to Q2 2025, the percentage of executives rating conditions as good or excellent has increased by 16 percentage points. Meanwhile, those viewing conditions as very poor or poor have declined sharply by 22 percentage points, and fair ratings have increased by 5 percentage points. These changes point to a notable bounce back in economic confidence among HR executives, albeit more mixed than the steady economic confidence throughout 2024.
1. Note: This discrepancy is a result of rounding.
Economic Forecast: Pessimism Cools as Outlook Turns More Mixed
In Q3 2025, HR executives show a more balanced economic outlook compared to the sharp pessimism seen last quarter. While 33% expect poor or very poor economic conditions in the next six months, this marks a notable 20-point drop from Q2. Positive expectations have also rebounded, with 29% now anticipating good or excellent conditions, up 14 percentage points. Meanwhile, 38% expect fair conditions, a modest increase of 6 percentage points. The shift reflects a cooling of last quarter's intense pessimism and a return to more mixed, measured expectations among HR leaders.
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Business Forecast: Lower-Than-Usual Expectations of Growth and Investment
Aligned with the shift in economic outlook, HR executives are showing a modest rebound in expectations for business performance over the next six months. Anticipated increases in revenue, profits, and capital expenditures all rose from Q2 lows, but still remain below the levels typically seen in recent years. This suggests a cautious return of confidence, though expectations have yet to reach their more typical levels.
- Revenue: 46% of HR executives expect an increase (a 6-percentage-point increase from Q2).
- Profits: 39% of HR executives expect an increase (a 5-percentage-point increase from Q2).
- Capital expenditures: 35% of HR executives expect an increase (a 3-percentage-point increase from Q2).
| 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% | |
|---|---|---|---|---|---|---|---|
| Revenue | 1% | 13% | 33% | 22% | 20% | 8% | 4% |
| Profits | <0% | 9% | 30% | 29% | 20% | 8% | 4% |
| Capital Expenditures | 3% | 11% | 21% | 42% | 12% | 7% | 5% |
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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 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 |
| Q3 2025 | n = 307 | 07/09/25 – 07/21/25 |
Read the Q3 2025 series:
CHRO Employment Outlook | CHRO Economic Outlook | SHRM Hiring & Retention Difficulty Indexes