Recent data shows that layoffs in the U.S. have reached their highest levels since 2020. In July 2025, companies across the country announced a total of 62,075 job cuts, a 140% increase from just one year prior.
Between financial headwinds, efficiency gains from artificial intelligence, and significant corporate restructuring, layoffs are becoming a more common occurrence, which is, in turn, shrinking corporate staff in every sector. Many are wondering how businesses can thrive as the business landscape continues to change.
The secret lies in keeping your best performers engaged and not job shopping. With new priorities taking center stage, here’s how businesses can ensure increased retention, engagement, and performance, even amid the uncertainty.
How New HR Priorities Are Shaping the Future of Business in 2026
Surveys show that, for 40% of HR professionals, performance management is a top priority in 2026. This represents a significant shift away from closely following social issues and a collective commitment to lean back into foundational business principles.
The good news is that this move is not only good for business, but it will likely have the same positive impacts on employee productivity, performance, and well-being.
Still, to maximize and retain good employees, a return to business basics must be coupled with a renewed focus on employee engagement. The same surveys indicate that 39% of HR pros list it as their second top concern.
The fact that performance and engagement so closely follow each other shows how these seemingly conflicting priorities actually work together to increase organizational success.
Strategies for Helping Employees Stay Focused on Doing Good Work
Even in an ever-changing business landscape, it is possible to keep employees engaged and support them in increasing their performance. Here are four crucial actions you can take to ensure your team can continue to do its best work.
Shift From Annual Performance Reviews to a Coaching Mindset
Many organizations are realizing that the annual performance review model can be problematic. The feedback given in these meetings often comes way too late, long after the opportunity for real improvement has passed. They’re often one-sided, which robs employees of the chance at meaningful participation in developing goals and solutions for themselves.
Instead of the annual review, consider moving to a weekly or monthly coaching model. Offering continuous feedback not only helps teams build stronger relationships, but it also allows managers to offer more immediate support and employees to better recognize the positive impacts of their real-time behavioral adjustments.
Use Systems to Bring Clarity to Performance Management
It’s important that HR professionals build systems around performance management practices. This shifts performance from a subjective task based on the manager’s attitudes and perceptions to something that can be uniformly applied across the board.
Creating a system also ensures that employees are clear about what they’re being judged on, which in turn can motivate them to self-correct their behavior when necessary. As you develop and deploy your system, make sure that you train your managers on how to use it effectively.
Offer Professional Development Resources and Opportunities
Recent data shows that 47% of healthcare employees would stay longer at a job that provided clear training for advancement. Ensuring employees know exactly what skills they need to develop to obtain promotions and offering opportunities for them to acquire those skills can increase critical metrics like motivation, performance, and retention.
This will only become more important in the future as surveys indicate that 87% of Gen Z graduates see employer-sponsored learning and development benefits as important (or even essential) when evaluating job opportunities.
Regularly Recognize Employees Who Are Doing Great Things
According to data from Gallup, well-recognized employees are 45% less likely to have left your organization after two years. Authentic, personalized, and equitable recognition can motivate employees to do their best and ensure they feel valued at work.
Still, it’s important to make sure your recognition is in line with employee expectations. In WellSky’s recent survey, 62% wanted cash performance bonuses, 48% wanted increased PTO, and 34% wanted shout-outs at employee meetings.
Build a Positive Culture That Balances Performance and Engagement
Even with so much financial pressure and uncertainty on the horizon, it is possible to not only retain your staff, but to keep them focused on what matters most — the collective achievement of organizational mission and goals.
Balancing a need to return to business basics with a continued commitment to supporting and engaging employees at every turn is what will get the job done.
With an understanding of your key priorities, a little empathy, and a rock-solid HR strategy, you can build a positive and supportive organizational culture that empowers employees to reach new heights.
