In 2025, leadership is at a crossroads. Data from global research reveals both significant challenges and encouraging shifts in how organizations develop, support, and sustain leaders. For HR professionals, people leaders, executives, and senior managers, understanding these patterns can help shape smarter strategies, foster stronger cultures, and build more resilient leadership pipelines.
Below is a data‑driven look at what leadership looked like in 2025, combining challenges with positive developments and opportunities.
1. Engagement Shows Strain, But the Role of Good Leadership Is Clear
Global employee engagement declined in 2025, with Gallup reporting that engagement fell to 21%, down from 23% the previous year. Engagement among managers declined from 30% to 27%, with younger and female managers especially affected.
However, the data also highlights a clear leadership imperative: managers still account for the majority of team engagement outcomes. Teams with strong managers see notably higher engagement and performance, indicating that investments in leadership quality do move the needle.
This dual picture: lower engagement overall but continued evidence that leadership quality drives results is a foundational insight for HR and people leaders entering 2026.
2. Burnout and Stress Are Real, But Awareness and Action Are Increasing
Burnout remains a top challenge for leaders and their teams. Studies show that a large majority of leaders experience stress and burnout, with many reporting health impacts and decreased team performance as a result. A key finding from the studies saw turnover increased by 30% due to burnout in leadership roles.
At the same time, many organizations are responding. According to leadership development research in 2025, 46% of organizations increased emphasis on programs aimed at reducing stress and burnout through leadership development, compared with 2024.
This reflects a growing recognition that wellbeing is not separate from performance, and that leadership development must include stress management, resilience, and capacity building.
3. Leadership Development Remains a Priority, and Spending Is Growing
Multiple global surveys indicate that leadership and manager development continue to be top priorities for HR leaders.
For example, a major Gartner survey found that leadership and manager development was the number one priority for HR in 2025 for the third year in a row, as organizations work to equip leaders with the skills needed to navigate growth, AI adoption, and talent shifts.
Further, training and development budgets are increasing in many organizations. One global trends survey showed that overall learning budgets were expected to increase by 11.7%, with leadership development spending up by 13.3% in 2025 compared with prior years.
This investment trend demonstrates that many organizations are not only recognizing leadership challenges but actively funding solutions.
4. AI Adoption Brings Challenges and Opportunity for Leaders
Artificial intelligence continued its rapid ascent in 2025. A study involving 7,000 professionals globally showed that 87% of executives were using AI at work, compared with just 27% of employees and 57% of managers.
This gap highlights both the opportunity and the risk for leadership development:
- Leaders who master AI tools can boost productivity and innovation
- But disparities in adoption and training risk creating disconnects within teams
In response, many organizations are prioritizing digital literacy and AI skills as leadership competencies, recognizing that tomorrow’s leaders must navigate technological and human complexity simultaneously.
5. Skill Gaps Persist, but Self Awareness and Reskilling Uptake Are Rising
Data from leadership surveys in 2025 showed that many leaders still feel underprepared for aspects like future talent development and decision making. In one report, less than 20% of leaders said they had sufficient time to fulfill all their responsibilities, and over half reported increased stress in their roles.
Yet at the same time, many leaders are actively embracing growth. For example, nearly 55% of leaders reported that upskilling their teams was essential to future success, and a significant portion of business leaders planned to increase investments in training and reskilling programs in 2025.
This combination of acknowledging gaps while taking action to close them is a promising sign for leadership capability building globally.
6. Trust in Leadership and Psychological Safety Are Emerging Focus Areas
Trust in immediate managers has become a key leadership topic in 2025. Some data points suggest trust levels are under pressure, with noticeable declines over recent years, especially among older employees.
However, organizations and researchers are increasingly emphasizing psychological safety and authentic leadership as drivers of trust—and early evidence suggests leaders who emphasize vulnerability, transparency, and empathy see better team cohesion and engagement.
Though the full impact of these approaches is still emerging, the focus on human centered leadership is a positive trend that could counteract disengagement in the long run.
7. Leadership Insights Extend Beyond Negative Headlines
While challenges such as stress, burnout, and engagement dips make headlines, other emerging leadership data in 2025 reflect strong momentum:
- A majority of organizations recognize leadership development as a strategic priority
- Many companies are increasing development and wellbeing budgets
- Leaders are increasingly aware of their development needs
- AI and digital fluency are moving from niche skills to expected capabilities
- Human centered leadership practices (empathy, psychological safety) are rising in influence
These positive shifts show that organizations are not passive amid disruption—they are adapting, reskilling, and refining leadership approaches with intention.
Key Takeaways for HR Leaders and Executives
- Leadership quality matters more than ever. Engagement and performance are stronger in teams with skilled, supported leaders.
- Wellbeing needs strategic focus. Burnout data are concerning, but increased attention to wellbeing and leadership development indicates progress.
- Investing in leadership pays dividends. Growing training budgets and priorities reflect organizational recognition that strong leaders are a competitive advantage.
- AI and digital skills are now leadership essentials. Leadership development must include technological competency.
- Human centered leadership is gaining traction. Authenticity, trust building, and psychological safety are becoming core leadership capabilities.
Take Home
The data from global leadership research in 2025 paint a nuanced picture: leadership faces undeniable stressors and performance pressures, but confidence, investment, and strategic focus are rising. For HR leaders, people professionals, executives, and managers, the path forward is not only about mitigating risk, they’re also about capitalizing on areas where leadership growth, development, and innovation are already happening.