Navigating the Days Ahead in 2025: Fall Forecast

Policy Shifts & Ripple Effects: Our Fall Forecast

As predicted, 2025 has been defined by disruption, with sharp policy shifts affecting the private sector layered atop a political environment that injects significant volatility—and uncertainty—into business planning.

The Trump Administration’s highly directive approach puts businesses that fall out of step with its priorities at risk—exposing them to potential contract losses, heightened enforcement or litigation, and reputational challenges.

CHROs should anticipate that Executive Branch-led policy changes—not just market fluctuations—will increasing influence corporate decisions, talent availability, shareholder expectations, and ultimately, strategy. This brings with it the need to engage boards and CEOs more frequently on the most impactful regulatory risks, relevant policy shifts, and workforce impacts.

At the start of the year, we made predictions about what 2025 would bring, and despite the Trump Administration’s unprecedented approach, most have proven accurate, with several still unfolding.

With the second half of 2025 well underway, it is a good moment to take stock of where we stand, what may lie ahead, and the implications for our members.

Navigating the Days Ahead in 2025

As anticipated, the President has moved swiftly in his second term, wielding executive authority aggressively to advance policy priorities and consolidate power in the White House. This approach is sending ripple effects across traditional modes of governing—domestically and abroad.

Executive authority: The White House has leaned heavily on executive orders to signal desired policy outcomes—even when the underlying law remains unchanged, as seen with DEI and AI. 

• Through the end of August, the President had issued nearly 200 executive orders. 

• Their durability under legal and judicial scrutiny is still unclear but results so far suggest more to come as organizations adapt to minimize enforcement risk.

Government involvement in business: Breaking with the Republican tradition of deregulation and limited intervention, this administration has shown a clear willingness to intervene in corporate operations and workforce matters. 

• A striking example - the U.S. government’s unprecedented $8.9 billion investment in a publicly-held company’s common stock, blurring the long-standing boundary between public and private markets. 

• The White House is hinting at potential other investments, and the impact to business and innovation is yet unknown.

Aggregation of power: Another defining feature is the Administration’s reach into independent agencies, such as the NLRB, FTC, EEOC, and SEC, even more than anticipated. 

• These agencies were designed to operate with relative autonomy to develop and preserve expertise and mitigate partisanship with the Chair of each agency typically of the President’s party.

• While agencies often shift priorities based on presidential changes, the Trump Administration has gone further by removing sitting members and replacing them with allies willing to align closely with the President’s agenda and accelerate it, a move rarely if ever seen before. 

• Independent agencies are either being placed under the firm control of the White House or eliminated entirely.

Global impact: The President has also brought a bullish, transactional business style to foreign relations, reshaping U.S. engagement and straining some diplomatic and trade partnerships.

• Volatile trade environment. The U.S.–China tariff truce provides temporary relief but lacks certainty, with key sectors like semiconductors and EVs facing ongoing policy shifts.

• Supply chain demands. Companies are accelerating friendshoring and nearshoring strategies to reduce geopolitical risk. This shift requires CHROs to prepare workforce strategies for new operational hubs while managing transitions in impacted regions.

• Global divergence AI and DEI. Global approaches are diverging: the EU is advancing AI regulation and sustaining DEI requirements, while the U.S. pares back. Multinationals must navigate these differences with region-specific compliance while preserving consistent organizational cultures.

Congress on the sidelines: With only a razor-thin majority, Republicans in Congress remain mired in gridlock, leaving the White House to dominate policymaking. 

• The one major exception - passage of the “Big Beautiful Bill,” delivering several key wins for the President including extension of Trump's 2017 Tax Cuts and Jobs Act, which will make most of the tax cuts permanent while increasing spending for border security, defense and energy production. 

Looking ahead: Expect Congress to devote energy primarily to funding measures and other essential legislation to avoid government shutdowns.

• Eyes on 2026 midterms. Control of both chambers is in play, with 23 House and seven Senate incumbents not seeking reelection. The turnover could dramatically reshape Congressional priorities after 2026.

CHRO Association engagement: With the Executive Branch expected to significantly ramp up policymaking activity in the months ahead, the Association has been proactively engaging with newly appointed leaders to ensure our members’ perspectives are represented early in the process. 

• Recent outreach has included meetings with Lori Chavez-DeRemer, Secretary of the Department of Labor and Andrew Ferguson, Chair of the Federal Trade Commission where we emphasized the critical role CHROs and large employers play in shaping effective workforce and employment policies.

• We are also scheduling a series of meetings with senior White House staff to continue our long-standing practice of constructive engagement with the administration. By building these relationships now, the Association positions itself as a trusted and solutions-oriented thought leader to help guide balanced, practical approaches to emerging workplace challenges.

For CHROs, the message is clear: anticipate policy-driven disruption. In the following pages, we outline the trends and initiatives most relevant to workforce strategy and talent management. 

Talent & Culture: Outlook for DEI & Immigration

The Administration’s twin focus on dismantling DEI as a workforce strategy and intensifying immigration crackdowns is beginning to strain employers’ ability to recruit and retain top talent. For CHROs, these developments are not abstract policy debates—they are immediate operational and reputational challenges. 

Companies that depend on global talent—through H-1B visas, J-1 student pipelines, or green card sponsorships—now face heightened complexity in workforce planning and compliance.

DEI enforcement moves from planning to action: After initially targeting law firms and higher education, the Administration has shifted its focus to federal contractors. 

• Over the summer, the Department of Justice began sending letters as part of its Civil Rights Fraud Initiative launched in May to use the False Claims Act to pursue federal fund recipients alleged to have violated civil rights laws. 

• If and when a settlement is procured, the Administration may pursue similar actions against private sector employers in general, regardless of whether they receive federal funds.

Recap of How We Got Here —

 “Ending Illegal Discrimination and Restoring Merit-Based Opportunity”: Current actions emanate from President Trump’s executive order, issued on his second day in office, directing federal agencies to combat private sector discrimination that may exist in their DEI programs. The order also requires federal contractors to certify that they do not operate any DEI programs that violate anti-discrimination laws, setting the tone for a broader federal shift.

Dismantling OFCCP: Following the order, the Department of Labor began dismantling the affirmative action functions of the Office of Federal Contract Compliance Programs (OFCCP), long the primary compliance watchdog for federal contractors.

 DOJ Memo for Federal Fund Recipients: On July 29, 2025, the Department of Justice issued guidance identifying certain DEI practices as potentially unlawful, raising both compliance and reputational risks for employers that have invested heavily in such programs.

EEOC outlines its role to eliminate DEI: With the agency unable to conduct official business due to the lack of a three-commissioner quorum, then-Acting Chair Andrea Lucas nonetheless signaled her enforcement agenda.

• Scrutiny of employer DEI practices. Lucas sent letters to 20 major law firms seeking detailed DEI program information, foreshadowing broader reviews across industries.

• National origin enforcement. She has emphasized protecting American workers from “anti-American” national origin discrimination, a stance that could complicate employers’ reliance on foreign labor.

• Religious discrimination. In an August 22 press release, the EEOC highlighted recent workplace enforcement actions, with Chair Lucas stating, “During the previous administration, workers’ religious protections too often took a backseat to woke policies.” Employers should anticipate a rise in claims related to hiring, promotions, and hostile work environments, as well as accommodation requests - ranging from dress codes and prayer breaks to disputes over company policies involving health care benefits, gender identity, or diversity initiatives.

• Action likely to follow this fall. The five-member EEOC currently has only two sitting members - Chair Lucas, a Republican, and Kalpana Kotagal, a Democrat. President Trump has nominated Brittany Panuccio, currently an assistant U.S. attorney, who is likely to be confirmed this fall. Her confirmation would give Republicans a 2‑1 majority on the Commission, providing Chair Lucas additional leverage to advance the Administration’s agenda.

Immigration crackdowns reshape workforce: The Administration’s mass deportations and heightened scrutiny of legal immigration are creating widespread uncertainty. Deployment of the National Guard in Washington, D.C., and threats of similar action in Chicago and New York—framed as public safety measures—are disruptive to the labor market.

• Climate of anxiety. Even lawful immigrants and legal minorities report fear of detention, fueling absenteeism, reluctance to commute, or withdrawal from the labor force. These disruptions cascade into business operations, undermining productivity and workforce stability.

Executive branch drives immigration policy: In the absence of Congressional action on comprehensive immigration reform, the White House and federal agencies are setting the tone. This agency-driven approach is expected to continue for the foreseeable future.

• New DOL Office of Immigration Policy (OIP): Created to centralize oversight of employment-based immigration on a temporary basis, OIP oversees H-1B visas, H-2A/H-2B visas, PERM labor certifications, and prevailing wage determinations.

• Key regulatory changes:

  • Caps on F-1/J-1 visas. U.S. Immigration and Customs Enforcement (ICE) published a notice of proposed rulemaking to limit visa stays to 2–4 years. Currently, F-1 students and J-1 exchange visitors are permitted to remain in the U.S. as long as they are pursuing a full course of study at an educational institution or participating in an authorized program. This change will affect employer pipelines for international students transitioning to OPT or H-1B.

  • Mandatory biometrics. Collection from all non-U.S. citizens on entry/exit. This rule was issued without public comment—indicating urgency but also raising potential legal challenges.

  • Weighted H-1B lottery. Reinstating Trump’s wage-ranking system prioritizes high-wage petitions and squeezes entry-level STEM hiring.

  • Visa renewal interviews. Effective September 2, 2025, most nonimmigrant visa holders (F-1, J-1, H-1B, E-3, O-1, and dependents) must attend in-person interviews for renewals, creating backlogs and mobility bottlenecks.

CHRO Roadmap

1. Protect the talent pipeline. Anticipate slower and less predictable access to foreign talent; invest in domestic upskilling and workforce development as a hedge.

2. Enhance risk management. Audit DEI programs, documentation, and employee communications. Tighten I-9 practices and recordkeeping to withstand audits and raids.

3. Support foreign-born employees. Visa uncertainty heightens stress and attrition risks; offer clear communication, support services, and alternative career paths to retain critical talent.

4. Adapt global mobility. Plan around visa renewal delays; adjust timelines for rotations, secondments, and cross-border assignments.

5. Engage the board and C-suite. Boards will expect CHROs to assess workforce vulnerabilities, anticipate reputational risks, and present mitigation strategies in an increasingly polarized environment.

Outlook for Labor & Employment

With the NLRB lacking a quorum and Congress gridlocked, labor and employment policy is now shifting to the states and the Department of Labor.

NLRB sidelined (leaving Biden-era labor laws on the books): The possibility of promptly undoing the Biden Administration’s significant labor law reforms was eliminated when the NLRB lost its quorum—becoming functionally inoperative—following President Trump’s removal of Member Wilcox, a Democrat, earlier this year. The Board is unlikely to play a meaningful role in labor policy for the remainder of the year.

• Confirmation delays. It will likely take several weeks – if not months – for Trump’s two pending Republican Board nominees – Scott Mayer, Chief Labor Counsel for Boeing, and James Murphy, a long time agency attorney- - to be confirmed. Pro-labor Sen. Hawley (R-MO) may complicate that timeline and chances for confirmation.

• Obstacle to overturning controversial decisions. Confirmation of the current nominees would leave the Board at three members—two Republicans and one Democrat. Because precedent changes traditionally require three votes, overturning controversial Biden-era decisions such as Cemex will remain highly unlikely without another Republican appointment, which has not yet been proposed.

• Constitutionality question. Adding uncertainty, multiple legal challenges to the Board’s constitutionality could eliminate it altogether, shifting labor claims to the courts.

DOL shift toward compliance assistance: Breaking from the enforcement-heavy approach of the Biden years, the Trump DOL is prioritizing compliance support for employers on wage and hour issues.

• The PAID program. PAID has been revived, allowing employers to self-report and correct potential wage-hour violations without large penalties.

• Rulemaking disfavored. On joint employer liability and independent contractor status, the DOL is signaling it will lean on opinion letters and guidance rather than new rules.

• Cooperative develop of apprenticeships. DOL’s Deputy Secretary Keith Sonderling recently sought the input of Association board members to share insights and recommendations on the Administration’s new apprenticeship expansion.

State hot spots: Workplace regulation in the states continues to increase, with several states passing or considering legislation focused on paid leave, pay transparency, labor, and AI. Employers should keep an eye on developments through the end of the year from state legislatures which remain in session, such as New York.

• State labor boards. With the NLRB unable to act, CA, NY, and MA have introduced unprecedented legislation to establish state level labor boards that would function like the NLRB.

• State AI laws. California is poised to enact major AI legislation, though business groups are likely to push Gov. Newsom (D-CA) to veto measures they view as overly broad. Colorado’s Gov. Polis, facing similar pressure, convened a special legislative session to scale back the AI law passed last year, which is set to take effect in 2026.

  • Separate CA bills would regulate developers and employer end-users, including notice requirements (to employees) and protections against workplace surveillance.

  • Markups have already watered down the scope of the three main bills over cost concerns, including the removal of a provision that would have given employees the ability to appeal automated decisions.

• Independent contractor benefits. Several states passed legislation or introduced pilot programs granting benefits and rights to independent contractors without affecting their classification, including MD, AL, UT, and TN.

CHRO Roadmap

1. Keep an eye on the states. With Congress stalled on workplace legislation, CHROs must track state-level activity, where both red and blue states are filling the void and complicating multi-jurisdictional compliance.

2. Don’t count on NLRB reversals. Employers can expect Biden-era decisions to remain on the books until at least 2027 with time running out on securing reversals before a new administration in 2028.

Outlook on Health Benefits

Health care and workforce wellness are back on Washington’s agenda, with the Administration spotlighting preventive fitness, nutrition, and cost containment. At the same time, increasing healthcare costs, breakthroughs in weight-loss drugs, rising pressure for PBM reform, and emerging uses of AI in benefits are reshaping the choices—and risks—CHROs must navigate.

Healthcare costs rise again: Large U.S. employers are bracing for a 9% median increase in healthcare costs in 2026, according to new survey data from the Business Group on Health. 

• This projection marks the steepest annual rise since the employer survey began in 2010. Employers cite the price and expanded use of weight-loss drugs; broader reliance on high-cost therapies and treatments; and the growing prevalence of mental health conditions as key cost drivers.

GLP-1 drugs reshape benefit decisions: Estimates suggest that 20–50 million U.S. adults could be using GLP-1s within the next decade, with global use projected to reach 40 million by 2029. 

• Policymakers are closely watching given the potential for reduced chronic disease costs. Congressional action to curb GLP-1 prices—through price controls, expanded coverage mandates, or PBM oversight—appears increasingly likely.

HSA and PBM reforms on Congressional agenda: The Association, working through business coalitions, is pushing to expand HSAs to cover wellness and fitness-related expenses such as gym memberships, exercise programs, and other preventive health costs. 

• With the Administration’s “Make America Healthy Again” initiative reinforcing the case for prevention, Congress may find momentum to allow employers to expand tax-advantaged wellness benefits. 

• While the legislative path remains uncertain, renewed bipartisan scrutiny of PBM practices around pricing transparency, rebate structures, and formulary management, suggests potential action this year. Stay tuned.

Intersection of AI and health care benefits: While sweeping AI legislation is unlikely, agencies and lawmakers are actively exploring how AI is being used in HR, health care, and benefits administration to control costs and manage programs. Expect hearings, roundtables, and agency guidance in the months ahead.

CHRO Roadmap

1. GLP-1 coverage decisions. Anticipate further budget pressures as demand for GLP-1s grows; balance employee access with affordability and long-term ROI.

2. HSA advocacy & benefits innovation. If Congress expands HSA eligibility, CHROs will have new opportunities to structure wellness incentives as tax-advantaged benefits, creating both financial and health engagement wins.

3. Cost containment & PBM reform. Stay on top of pending legislative reforms and evaluate vendor contracts, pricing models and pending transparency mandates for savings opportunities.

4. AI in benefits administration. With adoption under scrutiny, ensure pilots in predictive health, claims management, or plan design, include human oversight, ethical guardrails, and clear employee communication.