A new survey from The Conference Board reveals one in five CHROs expect to decrease hiring over the next six months, nearly double the share who anticipated a pullback one year ago. Rather than expanding headcount, CHROs are intensifying efforts to prepare existing teams for rapid change. Half report investing in change management training for leaders, while nearly as many are supporting similar programs for managers.

“CHROs are taking a more thoughtful, steady approach as economic and policy uncertainty lingers. This slowdown in hiring isn’t about losing confidence, it’s about being smart and strategic,” says Diana Scott, leader of the The Conference Board U.S. Human Capital Center. “Right now, leaders are focused on strengthening their current teams, managing change well, and staying flexible before making big moves to hire again.”

Overall, CHROs outlook on the state of the workforce remains stable. The Conference Board CHRO Confidence Index rebounded slightly to 56 in Q2, up from 54 in Q4 2024. While hiring is cooling, employee engagement and retention expectations are continuing to improve.

Conducted biannually, the CHRO Confidence Index is comprised of three components: hiring, retention, and engagement. More than 100 CHROs participated in the most recent survey. Key findings include the following.

• Hiring expectations are down year-over-year as CHROs’ workforce expansion plans continue to cool. One-fifth (20%) expect to decrease hiring over the next six months, up slightly from 19% six months ago and a jump from 11% in Q2 2024. Over a third (36%) plan to increase hiring over the next six months.
• CHROs are mixed on how challenging it will be to retain employees over the next six months. Approximately 16% of CHROs expect their employee retention to decrease, down from 21% in Q4 2024. Nearly a third (32%) expect retention to improve.
• CHRO optimism about engagement continues to improve, as 14% expect engagement to decrease (down from 24% last year) and 45% expect engagement to increase (up from 42% last year).
• Most CHROs are confident in their organization’s ability to manage upcoming change.
• CHROs are investing in training for leaders and managers to deal with upcoming change.

In the second quarter of the year, the likely impact of the presidential administration’s policies on the workforce became clearer to CHROs. Half (50%) say they expect new policies to have a negative impact, up from 36% in March. Just 11% expect a positive impact, up from 5%, while 21% expect no impact and 18% are still uncertain.