TriNet, a leading provider of comprehensive HR solutions for small and medium-size businesses (SMBs), has announced the release of its 2025 State of the Workplace, an annual industry-wide pulse survey offering a dual-perspective of employer and employee sentiment across the SMB landscape in the U.S. 

The report draws on survey data from more than 1,000 SMB respondents that includes 540 full-time employees and 500 employers across industries such as financial services, life sciences, nonprofit, professional services, and technology.  

“The TriNet 2025 State of the Workplace report reveals a workplace underdoing rapid transformation, from the mainstreaming of AI to shifting expectations around workplace flexibility, engagement, and benefits,” says Cathering Wragg, chief people officer at TriNet. “By comparing employer assumptions with employee realities, we uncover blind spots and insights that SMBs must address to stay competitive.” 

Key findings from the report include the following.  

• Employee engagement is up, but not as much as employers think. Nearly half (47%) of employers believe employees are “extremely engaged,” rising 10 points from 37% in 2024. Employers, especially baby boomers, tend to overestimate intensity, with 46% describing their teams as extremely engaged, while just a third of Gen Z employees say the same.  

• Workplace flexibility becomes the new normal. Three days in the office is employers’ new sweet spot (26%, up from 21%), but just 14% of employees agree—suggesting flexible work arrangements as a recalibration of when, where, and how employees contribute.  

• The workforce notices a skills gap. Almost half (46%) of employers say workers have the skills to succeed, while a decreasing number of employees agree. Organizations now face a widening talent readiness gap. 

• AI use in HR is rising, except in two key areas. AI is now mainstream in small business—94% of employers and 84% of employees have used AI on the job, with two-thirds of employees tapping it regularly for HR tasks. Employees and employers alike are pulling back slightly in sensitive areas such as offboarding and training—places where human context and empathy still matter most. 

Additionally, mental health support is more broadly recognized. Employers show increasing priority for mental health covered under insurance plans; “extremely important” responses grew from 28% to 37%. Fertility coverage is gaining traction on both sides of the workplace.  

Childcare assistance emerges as a rare point of employer-employee alignment, as both sides show rising support. Finally, employee discounts see a shared boost in importance, as employers’ “extremely important” ratings climb to 32% from 27% and employees’ “moderately important” responses rise to 36% from 29%.