There's a conflict playing out inside a lot of companies right now.
The budget for people programs is getting cut. The expectations on the people team are going up. Both at the same time.
HR, CSR, and DEI leaders are being asked to do more with less. Fix engagement. Hold culture together. Keep remote teams connected. And now steady everyone through the arrival of AI. All while their own resources shrink.
That math doesn't work. At some point, a company has to choose.
The budgets are getting cut
Start with the clearest signal. DEI spending.
A Resume.org survey of more than 1,000 companies found that roughly 1 in 8 cut or eliminated their DEI programs in 2025. The reasons they gave: political climate, economic pressure, and a sense that the return was hard to measure.
DEI is the visible edge of this. When budgets tighten, the squeeze rarely stops there. People programs across the board get thinner. Fewer resources for engagement. Less for culture. Less for the work that keeps employees connected to the company.
Here's the detail worth holding onto. Among companies that cut DEI, 40% redirected that money into AI and technology.
Keep that number in mind. It matters in a minute.
The expectations are going up
Now look at what those same teams are being asked to fix.
Gallup's State of the Global Workplace 2025 found that employee engagement fell to 20% globally. That's the lowest level since 2020, and the second straight year of decline. It peaked at 23% in 2022 and has dropped since.
Managers took the hardest hit. Their engagement fell from 27% to 22% in a single year.
Gallup puts the cost of all this disengagement at around $10 trillion in lost productivity worldwide. This is not a soft problem. It shows up in output, in quality, and in who stays.
And the people being asked to turn it around are the same teams whose budgets just got cut.
The teams are also harder to reach than they used to be. More employees work remote or hybrid now. The hallway moments that once built belonging don't happen on their own anymore. Someone has to create them on purpose. That's one more job on the people team's plate.
AI just added a new morale problem
Then there's the newest pressure. AI.
Pew Research Center found that 52% of U.S. workers feel worried about how AI will be used at work. Only 6% believe it will lead to more opportunity for them. A third say they feel overwhelmed.
This rhymes with something we lived through already. COVID was an outside shock that changed how people felt about work. Someone had to help employees through it. That someone was the people team.
AI is the next version of that shock. A quieter one, but real. A new kind of discouraged, uncertain employee is showing up in workplaces that have never had to manage this before.
Now put the two facts together. Companies cut people budgets and moved 40% of that money into AI. So a share of the very AI rollouts unsettling employees was funded by defunding the team that handles how employees feel.
That's the conflict in one sentence. Fund the stressor. Defund the people who manage stress.
Let's name it plainly
This isn't a knock on any one company. Most didn't back into this on purpose. They made a budget decision in one meeting and a culture demand in another, and never put the two in the same room.
But the two belong in the same room.
You can reduce investment in HR, CSR, and DEI. Or you can ask those teams to fix engagement, hold culture together, and carry employees through the AI transition. What you can't fairly do is both.
It isn't reasonable to cut the input and raise the output demand on the same people. You can't reduce someone's resources and then expect more from them because you reduced those resources. Said out loud, it's obviously unfair. It just rarely gets said out loud.
Reinvesting is retention insurance
Here's the case for choosing the other way.
Even in a world full of AI, you still have to keep your best people. AI doesn't replace a high performer. It makes a high performer more valuable. The last thing a company wants during a big technology shift is for its strongest people to walk.
And losing them is expensive. Studies from SHRM and Gallup put the cost of replacing an employee at anywhere from 50% to 200% of their salary. For a senior person, that's the high end. One avoidable departure can cost more than a full year of the program that might have kept them.
Engagement and retention move together. And the programs on the chopping block, the giving, the volunteering, the community and belonging work, are among the cheapest ways to keep people connected to each other and to the company.
Framed that way, investment in people isn't a cost line. It's insurance on the asset you most need to protect. Your employees are still your most important asset. That was true before AI. It's more true now.
If you're the one being squeezed
If you lead a people team, the move isn't to absorb the squeeze quietly.
It's to make the tradeoff visible. Put the two trends side by side in your next budget conversation. Engagement is down. Expectations are up. Resources are flat or falling. Ask your leadership to choose on purpose, instead of drifting into the cut by default.
Then protect the programs that do the most per dollar. The ones that keep people connected when everything else feels uncertain.
One reason these programs get cut is that they look like more work for a team that has none to spare. They don't have to be. A corporate giving program run by a dedicated manager adds capacity to your team instead of taking it. You get the engagement and the retention benefit without the admin landing on your desk.
If you're being asked to do more with less, that's the kind of help worth asking for. Your time is more valuable now than ever before. Percent Pledge engages 50%+ of your employees while giving you back your time. Meet with our team to discuss how we can grow your employee engagement and internal bandwidth at the same time.
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