2025 is almost here, and for many businesses, the outlook is both exciting and daunting. Profit margins are under more pressure than ever, squeezed by everything from rising energy prices to the battle for top talent. At The Culture MRI®, we’ve been working closely with leaders across industries who face the same tough question: How can we drive growth in the upcoming climate? We’ve boiled it down to five major “profit” problems that, if tackled head-on, can actually unlock new opportunities. Here’s a look at the core issues businesses are navigating right now—and how we’re helping companies like yours address them.
1. Rising Operational Costs
Over 70% of U.S. businesses report that rising operational costs—including energy, labor, and healthcare expenses—are putting significant pressure on profitability in 2024.
• Energy: In 2024, rising electricity rates continue to impact operational costs for businesses across the U.S., with utilities implementing rate hikes to cover infrastructure improvements and meet growing energy demands. (Reuters)
• Freight: High freight rates are straining supply chains, with global consumer prices potentially rising by 0.6% by 2025 (UNCTAD).
• Insurance: Hospitals and health systems face rising insurance premiums, adding to operational costs (AHA).
• Labor: Total compensation costs for private industry workers have increased by 3.9% over the past year (Bureau of Labor Statistics).
• Healthcare: In 2025, U.S. employers anticipate a 5.8% increase in health insurance costs, marking the third consecutive year of such rises. This trend is driven by escalating medical service expenses and higher utilization rates, significantly impacting business operations. (Reuters)
Our Perspective: Rising costs are an external pressure nearly every business faces, but there’s a powerful way to counterbalance these increases internally. At The Culture MRI®, we help companies identify internal productivity gains that can mitigate the impact of these external expenses. By measuring where inefficiencies lie within your operations—whether it’s in workflow bottlenecks, misaligned resource allocation, or team engagement—we find actionable insights to boost productivity and profitability. With targeted adjustments internally, companies can cushion themselves against rising costs, maintaining a competitive edge even as external costs climb.
2. Labor Challenges: Shortages, Compensation, Acquisition, and Retention
Nearly 60% of companies report that labor shortages, increased compensation demands, and challenges in talent acquisition are major obstacles to maintaining operational efficiency in 2024.
• Labor Shortages: Key sectors like healthcare and education face severe shortages, impacting productivity (U.S. Chamber of Commerce).
• Compensation Increases: U.S. companies plan to raise salaries by an average of 3.9% in 2025, a slight decrease from the 4.1% median increase in 2024, as reported by Willis Towers Watson. (HR Dive)
• Talent Acquisition: Skills shortages are posing major recruitment challenges, with hiring now a top concern (SHRM).
• Employee Retention: Nearly 42% of companies are increasing development opportunities to improve retention (CIPD).
• Global Labor Shortages: Workforce shortages threaten growth worldwide, with labor among CEOs’ top external concerns (The Conference Board).
Our Perspective: The talent market has shifted dramatically, with compensation alone no longer enough to retain top talent. Labor challenges are a significant external pressure, but companies have powerful internal options to counterbalance them. At The Culture MRI®, we measure the factors that genuinely drive employee commitment, helping you build a workplace where people are motivated to stay and perform. By focusing on what truly matters to your team, you can reduce turnover, improve acquisition efficiency, and ultimately boost profitability—making every investment in talent go further.
3. Employee Engagement and Well-Being
Approximately 75% of business leaders say that employee engagement and well-being are crucial for productivity, with mental health support becoming a key factor in job satisfaction.
• Burnout: Employee burnout continues to be a significant concern, with 44% of employees reporting feeling burned out at work at least some of the time. (Wellbeing People)
• Workplace Culture: Overextended HR departments struggle to keep up with the demands of creating supportive workplaces (New York Times).
• Flexible Work: Full-circle flexibility is emerging as a key trend, with companies focusing on Hybrid 360 work models (Korn Ferry).
• Mental Health: Addressing mental health is critical for workforce stability, particularly in high-stress sectors (American Hospital Association).
• Fair Compensation: About 87% of workers believe fair compensation is essential, directly affecting engagement (SHRM).
Our Perspective:
Supporting employee well-being has become essential as external pressures continue to shape workplace expectations. But many companies feel unsure about how to address this shift internally. The Culture MRI® offers a framework that guides you step-by-step, showing exactly where to make impactful adjustments that meet employees’ needs for engagement and mental health support. We’re here as a support system to help you adapt thoughtfully, creating an environment that keeps your team motivated and productive—even as external demands evolve.
4. Skills Gaps and Workforce Reskilling
The need for reskilling is increasingly urgent as industries adapt to technological shifts:
• Healthcare: The U.S. healthcare industry anticipates significant skill shortages, driving the need for reskilling (Mercer).
• Talent Trends: Skills gaps continue to challenge talent acquisition, with reskilling a top priority (SHRM).
• Global Workforce: Addressing skills shortages requires collaboration across sectors to expand training (The Conference Board).
• Acquisition Adjustments: Reskilling is becoming integral to adapting talent strategies and meeting labor demands (Korn Ferry).
Our Perspective: Reskilling isn’t just about future-proofing; it’s about ensuring your workforce can meet today’s demands. The Culture MRI® helps organizations assess current skills gaps and prioritize reskilling initiatives that keep the workforce agile and capable.
5. Company Culture
85% of executives agree that a strong, positive company culture significantly enhances employee retention and reduces turnover.
• Workplace Culture: SHRM reports that a supportive workplace culture plays a significant role in engagement and retention (SHRM).
• Leadership’s Role: Middle managers are essential to shaping culture and driving team performance (McKinsey).
• Inclusion & Flexibility: Korn Ferry’s “Hybrid 360” emphasizes inclusion and flexibility as vital cultural components (Korn Ferry).
• Employee Experience: Aligning culture with employee experience is crucial for business success
(CIPD).
• Culture & Profitability: Forbes links strong culture with profitability, as an engaged workforce is more innovative and productive (Forbes).
Our Perspective: A great company culture is more than a morale boost—it’s a profit driver. The Culture MRI® makes culture measurable, providing data-driven insights into how organizations can cultivate an engaged and loyal workforce that directly supports business goals.
Partnering to Tackle the Profit Challenges of 2025
At The Culture MRI®, we understand these challenges firsthand. Our approach delivers clear, actionable insights to help companies counter rising costs, attract and retain talent, enhance engagement, address skills gaps, and build a resilient culture. As we head into 2025, we’re here to partner with forward-thinking companies that view these challenges as opportunities for growth and profitability, leveraging the world’s most advanced system for maximizing retention and engagement.
If you’re ready to transform these pressures into competitive advantages, reach out to us at The Culture MRI®. Together, we’ll build a workforce that’s engaged, capable, and aligned with a purpose-driven culture—creating a powerful foundation for sustainable profitability and success.