Next in consumer markets workforce: Trends impacting labor in 2025

A workforce reckoning is underway in consumer markets. We see four big trends converging to influence the labor market: decreasing employee morale, skepticism toward AI, increase in employee attrition and continued tension around returning to the office. These trends are still developing, but if they conflate to cause an increase in worker turnover, companies could find themselves with deepening execution and strategy risks. A flood of new hires won't fix these issues. At the same time, a marked shift in US policy—coupled with macroeconomic issues like tariffs, immigration reform and a potential trade war—is reshaping the broader economy.

Right now, it’s unclear if these trends will lead to a Great Resignation 2.0, but it is clear that they’re developing quickly. Consumer markets companies have a rare opportunity to proactively meet the change in workforce demands and update their strategies at speed. Leading companies are meeting these challenges by moving beyond reactive hiring and instead prioritizing workforce investments that build resilience amid ongoing disruption.

How will your organization adapt?

Today’s employees feel overworked and underpaid. More than half of the employees responding to our surveys tell us they feel there’s too much change at work happening at once, and 44% don’t understand why things need to change at all.¹ Further, half of employees have more work than a year ago, and 60% feel they’re not paid enough.² Employers are raising expectations without offering enough in return, employees say—especially for frontline workers—and this is affecting employees’ lives both in and outside of work. Either due to inflationary impacts or lack of pay increases, money worries are taking a toll, with about half of workers saying financial stress affects their sleep, mental health and work.³

Companies should invest in their people, but perks like gym memberships don’t cut it anymore. Companies can look to new technology and techniques to begin to cross this divide. For example, employee feedback tools can help determine which benefits are most valued by your workforce. In our experience, companies that have used analytics like that could potentially save $1,000 to $3,000 per employee annually.⁴

What impact can these kinds of changes have? Imagine a boutique hospitality chain struggling with rising labor costs and implications of immigration policy shifts. Rather than implementing generic benefits, the company used employee feedback to identify and invest in initiatives, including support around childcare, stipends to cover some food costs and a workload analysis to help target pain points. At the same time, the company deployed AI-driven efficiencies like chatbots and virtual concierges as complements to these human-centered investments. The result was a better place to work that not only maintained high service standards and improved guest experiences but also made the day-to-day easier and provided improved benefits for employees.

AI’s strength lies in its ability to amplify human capabilities. But even as leading consumer markets players ramp up AI use, more than half of workers worry about potential bias and misinformation.⁵ At the same time, just over half of US workers say they’re worried about the future impact of AI in the workplace, and 32% believe it will lead to fewer job opportunities.⁶ In fact, there’s been a marked increase in Gen Zers opting for trade schools rather than jobs that require a college degree, partly because of the expected impact that AI will have in the workplace.⁷

The challenge isn’t just technological—it’s also about building trust with employees. While 56% of CEOs say GenAI has boosted efficiency,⁸ its real value extends beyond productivity to unlock innovation as employees focus on strategic priorities like long-term growth.

For example, we recently helped one of the largest retail companies in the world to build a new, AI powered organization. Crucially, leadership understood that AI is not just a technology shift but a transformation in how workforces operate. The company is investing in upskilling employees, furthering its abilities to work with the AI tools (including AI agents) while simultaneously redefining roles to mitigate change resistance. The result is an AI-led entity, across all functions and processes, with employees who help shape how their work is done now and in the future.

Ultimately, AI adoption succeeds when employees see it as an ally rather than a threat. One way to build trust is by democratizing AI. Rather than just having a team of experts determine what employees need from the tool, allow AI to be used across all employee groups. Your employees should be your experimenters, finding new and creative ways to use AI in their day-to-day work.

But it all starts with a clear AI strategy tied to business goals.

This three-dimensional strategy targets systems, talent and experience to create a foundation for lasting competitive advantage.

Alarming attrition rates tell a clear story. In December 2024, three consumer markets subsectors saw some of the highest separation rates across all industries with 5.3% in hospitality, 5.2% in food service, 5.1% in transportation and logistics, and 3.9% in retail and consumer products—all exceeding the 3.3% cross-industry average.⁹ And each new hire costs approximately $2,700.¹⁰ The risk is that instead of building institutional knowledge and trust in a particular company, employees cycle from company to company. Employers would have to pay higher costs and need more time to implement strategic changes, which could include personalizing the customer experience, gaining process and technology efficiencies, enhancing corporate culture, and many others.

Training and development not only offer one of the most effective solutions to retain employees but can capitalize on the growing population of young adults in trade work as well. Some GenZ workers aren’t seeing the return they expected on their degree, and they’re looking for on-the job training.¹¹ Employees considering job changes are twice as likely to prioritize skill development, but less than half believe they receive sufficient learning opportunities.¹² Successful training strategies build upon programs that resonate with employees, embed skill development into daily operations and secure leadership buy-in. Educational partnerships also expand learning opportunities and show employees you value their growth.

What does success look like? When struggling with inconsistent service and knowledge gaps—largely due to employee turnover and customer preference changes—a high-end department store redesigned its training strategy around new customer preferences. Executives found their path to success by capitalizing on what the organization already had, like training programs on merchandising and assortment. The store refocused its heir legacy trainings by determining which roles needed not only reinforcement but expansion into new areas of expertise. Just by making this a mandatory part of workforce upskilling and spreading the intake of training in smaller chunks as part of the normal workday, the store was able to see an uptick in retention, efficiency and productivity.

Organizations across the US—most recently the federal government—are implementing return-to-office (RTO) mandates. These policies create varying impacts across sectors, with corporate employees returning to offices while frontline retail, restaurant and hospitality positions have always required in-person work. With today’s workforce now spanning five diverse generations, effective RTO strategies need to balance purpose-driven policies with compelling reasons for office attendance—like meaningful collaboration and mentorship opportunities. Research shows rigid mandates increase attrition among women, senior employees and skilled workers,¹⁴ while hybrid models maximize satisfaction.¹⁵

Further, a move to RTO doesn’t mean the end of flexibility. For workers in the consumer markets sector, not everyone is a desk or office worker. As such, flexibility can come in the form of customized shift start times/lengths, shift swapping, hours-based PTO arrangements, location assignments, and so on. And, all of this can be part of an RTO package with your employees.

The impact of these workplace decisions extends beyond office walls. As companies shifted to hybrid and remote work, nearby restaurants and cafés suffered from reduced customer visits and declining sales.¹⁶ Now, return-to-office mandates are reviving foot traffic in metro areas and business parks, offering businesses a much-needed path to normalization.

For example, picture a busy lunch spot near a business district that saw sales plummet when office attendance dropped. Anticipating RTO changes, the restaurant strategically expanded grab-and-go and delivery options and optimized staffing for peak hours. Mobile ordering was also improved. This preparation helped it recapture returning workers and become the preferred option for professionals adjusting to new routines.

Other labor trends we’re keeping a close eye on include immigration reform, income tax changes and the evolving DEI landscape. Many consumer markets companies rely on immigrant labor and, depending on what policy shifts are implemented, may face anything from labor shortages and higher wages to new compliance requirements and other administrative burdens. Eliminating taxes on tips could increase disposable income for some workers, but it might also draw labor away from non-tipped roles in retail and hospitality. Changes in DEI-related regulations appear likely to affect talent attraction programs and consumer brand loyalty.

In our analysis, whether or not these workforce trends culminate in a Great Resignation 2.0, their individual effects are now inevitable and require strategic planning. Consumer markets companies that proactively adapt to shifts in the labor pool will gain a competitive edge, viewing this transformation as an opportunity to refine talent strategies, enhance employee retention and attract top talent from organizations struggling with workforce dissatisfaction. Organizations that remain reactive risk stagnation, while those that embrace a forward-thinking, data-driven approach to workforce management will position themselves as industry leaders. This is a critical moment to reimagine workplace strategies—acting with precision, leading with purpose and building a resilient, future-ready organization capable of sustaining growth in an evolving market.