News Spotlight

Burnout and engagement are a deadly combination. HR leaders are concerned about the risky combination of burnout and high engagement, which can lead to employee exhaustion and decreased long-term retention (Fortune).

Gen Z wants to work for ethical employers. Gen Z workers are rejecting job offers and considering quitting roles at companies they perceive as lacking ethical standards (Telegraph).

Parents can’t keep up with childcare costs. In 2024, the cost of previously affordable childcare skyrocketed, making it inaccessible for many working families (Bloomberg).

Stat of the Week

A new study finds that employee pride in the quality of products and services has fallen eight percentage points since 2020.

This drop in employee pride can signal deeper issues related to engagement, morale, and company culture, potentially affecting productivity and retention. When employees no longer feel connected to the value of their work, motivation and discretionary effort may decline, leading to lower performance and customer satisfaction. To address this, HR should focus on employee experience and internal communication, ensuring workers understand their impact on the organization’s success. Strengthening recognition programs, leadership transparency, and opportunities for professional growth can help rebuild pride.

Deep Dive Article

Workplace Power Dynamics Shift Back in Favor of Employers

The balance of power in the workplace has always been in flux, influenced by economic conditions, technological advancements, and shifting workforce expectations. Over the past few years, employees have enjoyed unprecedented leverage due to labor shortages, remote work flexibility, and rising wages. However, recent trends suggest a reversal, with power shifting back into the hands of employers.

About one in five job seekers were still looking for a job for more than a year going into 2025, and 26 percent said they don't plan to job hunt because the current job market is so challenging. Also, 22% of companies are offering lower salaries than they did last year for some positions at their company.

A combination of economic pressures, technological interventions, and changing corporate policies is driving this shift. Companies are tightening remote work policies, scaling back perks, and asserting more control over hiring and compensation. As job markets soften and financial uncertainties loom, organizations are reevaluating their approach to workforce management, prioritizing cost efficiency and long-term stability over employee demands.

Today, I explore the key factors contributing to this shift, including the tightening labor market, the return-to-office mandates, wage stagnation, the impact of automation, and employer-driven policy changes. By understanding these developments, employees and business leaders alike can navigate the evolving landscape of workplace power dynamics.

1. The Softening Labor Market

One of the most significant contributors to the shift in power dynamics is the softening labor market. During the pandemic and its immediate aftermath, employees had the upper hand due to widespread labor shortages and high job vacancy rates. Companies competed fiercely for talent, offering increased salaries, sign-on bonuses, and flexible work arrangements to attract and retain workers.

However, as economic conditions tighten, hiring has slowed across multiple industries. Companies are now more selective about hiring decisions, often favoring cost-cutting measures over expansion. With job openings decreasing and unemployment slightly rising, employees have less bargaining power. In this environment, job seekers face tougher competition, and businesses no longer feel compelled to offer excessive incentives to attract talent.

2. The Return-to-Office Mandate

Another major factor shifting power back to employers is the widespread enforcement of return-to-office (RTO) policies. At the height of the pandemic, remote work became the norm, empowering employees to demand flexible schedules and location independence. Many workers expressed reluctance to return to in-office settings, citing productivity gains and work-life balance improvements as reasons for maintaining remote or hybrid arrangements.

Despite employee pushback, major corporations such as Amazon, JPMorgan Chase, and Google have mandated in-office attendance. By making office presence a requirement, employers regain control over workplace culture, collaboration, and employee accountability. For workers who refuse to comply, the threat of job loss or diminished career prospects looms, reinforcing the employer’s authority in defining workplace norms.

3. Wage Stagnation and Cost-Cutting Measures

During the labor shortage, wages saw significant growth as companies competed for talent. Now, with hiring slowdowns and increasing economic uncertainty, wage growth has plateaued. Employers have less pressure to increase salaries when fewer job openings exist, and many companies are even scaling back bonuses and annual raises.

Additionally, cost-cutting measures such as hiring freezes, layoffs, and reduced employee perks have become commonplace. Companies that once prioritized employee well-being and retention through generous benefits packages are now focusing on financial sustainability. The loss of workplace perks—such as mental health resources, wellness programs, and travel stipends—signals a shift back to employer-driven decision-making, where business priorities take precedence over employee demands.

4. The Rise of Workplace Automation

Technological advancements, particularly in artificial intelligence and automation, are further reinforcing the power shift toward employers. AI-driven tools are increasingly capable of handling tasks that were previously performed by human employees, reducing the need for large workforces. Employers can now optimize productivity while maintaining leaner teams, diminishing the bargaining power of workers.

In industries ranging from customer service to finance and logistics, automation is replacing routine jobs, making some roles redundant. As a result, employees who once had leverage due to talent shortages now find themselves competing not only against other job seekers but also against emerging technology that can perform tasks more efficiently. Employers, in turn, gain greater control over labor costs and workforce strategy.

5. Employer-Driven Policy Changes

Beyond labor market trends and technology, corporate policies themselves are contributing to the power shift. Companies are implementing stricter workplace policies, reducing remote work options, and enforcing stricter performance metrics. By controlling the terms of employment more rigidly, employers are reasserting their authority.

Some organizations are also leveraging contract and gig-based employment models to avoid long-term commitments to full-time employees. This shift gives employers more flexibility while reducing workforce bargaining power, as contract workers lack the job security and benefits afforded to traditional employees. These strategic changes allow businesses to adapt to economic pressures while maintaining control over labor dynamics.

6. Declining Union Influence

Another significant factor in the shifting power dynamics is the decline of union influence in many industries. Over the past few decades, union membership has steadily decreased, limiting workers' collective bargaining power. Unions historically played a crucial role in advocating for fair wages, job security, and workplace protections. However, with fewer employees covered by union contracts, companies have more flexibility in setting employment terms and adjusting workforce policies without facing strong resistance.

As a result, employers have more control over decisions related to layoffs, benefits, and working conditions. The lack of collective representation makes it more difficult for workers to push back against unfavorable policies, reinforcing the dominance of employers in shaping workplace dynamics. Without strong union backing, employees must rely on individual negotiations, often leading to weaker leverage in discussions regarding salary, benefits, and job stability.

Adapt to changes in the labor market

The recent shift in workplace power dynamics reflects broader economic and technological trends that favor employers. A cooling labor market, return-to-office mandates, wage stagnation, automation, and employer-driven policies are all contributing to the reassertion of corporate control. While employees may continue to advocate for flexibility and fair compensation, the leverage they held in recent years is diminishing.

For workers, adapting to these changes will require strategic career planning, skill development, and flexibility in meeting evolving workplace expectations. For employers, maintaining a balance between authority and employee engagement will be crucial to sustaining long-term organizational success. As workplace dynamics continue to evolve, both employees and businesses must navigate this shifting landscape with awareness and adaptability.

Thanks for reading — be sure to join the conversation on LinkedIn and let me know your thoughts on this topic!

Quote of the Week

“Make each day your masterpiece.”
​John Wooden