Gallagher's 2026 benchmark data shows why burnout risk is building before retention numbers move
Nearly two-thirds of US employers reported annual turnover of 10 percent or higher in 2025, according to a new Gallagher workforce trends report. Most of those same organizations expect revenue to grow by 2027 without a proportionate increase in headcount. That gap shapes what employees experience at work and what they need from their benefits.
Gallagher's 2026 US Workforce Trends Report - Talent Benchmarks captures those pressures in detail. Drawn from 3,717 US organizations surveyed between January and March 2026, the report covers employee engagement, retention, and the expanding role of AI in HR operations.
When growth outpaces capacity
The survey found that 61 percent of employers anticipate revenue growth by 2027, but only half expect headcount to grow at the same pace. The result is a workforce expected to absorb expanding output with relatively stable staffing. The report ties burnout risk to this structural gap - not to short-term stress, but to the sustained difference between production expectations and the capacity available to meet them.
Retention is feeling that strain. Almost three in five employers ranked it as a top HR priority, and roughly two in five placed it among their top operational concerns. That overlap shows retention has moved beyond HR program management to become a cost and continuity issue.
When turnover exceeded plan in 2025, the effects were immediate. Unbudgeted replacement costs, lost institutional knowledge, and redistributed workloads added pressure to remaining staff. Those conditions tend to show up in benefits utilization - in mental health claims and absence management - before they appear in turnover reports.
That pattern is reinforced by separate data from NFP's 2026 US Benefits Trend Report, which found average employer spending on mental health resources fell roughly 7 percent year-over-year, even as financial and mental strain among employees climbed.
Engagement data without follow-through
Engagement measurement has spread, with 57 percent of employers conducting a survey in 2024 or later. But the report finds that measurement produces little without visible follow-through.
Employers that use engagement data effectively look past aggregate scores and focus on where risk is concentrated, such as differences by manager, team, or role. That granularity also surfaces in utilization patterns, since burnout and disengagement tend to cluster in specific pockets of an organization.
When employers are asked what drives engagement, manager behavior ranks at the top. Forty-five percent of employers focused on improving engagement work on clear performance goals, 45 percent on communication that builds trust, and 42 percent on timely feedback. None of those outcomes depends primarily on a benefits plan, but all of them affect how employees experience one. A workforce that trusts its leadership is more likely to use the benefits it has, which raises the floor on plan value even before design changes.
AI adoption runs ahead of readiness
The report's AI findings carry a separate set of implications. Seventy-three percent of employers say they are likely to increase AI use in HR by 2028, while 45 percent have already implemented it in parts of the business. In benefits administration, large employers are significantly ahead of small ones - 37 percent versus 14 percent. The gap reflects where the advisory work concentrates: smaller employers are half as likely to have adopted AI in benefits administration, and the compliance and governance infrastructure that responsible adoption requires is often absent.
AI adoption in HR is running ahead of the governance structures needed to support it. Only 51 percent of employers have expanded their risk management practices to cover AI, while just 45 percent have conducted ethical impact assessments. Data privacy and security are the top concern, cited by 72 percent. Nearly 29 percent say concern about eroding employee trust is itself a barrier to adoption. That finding points to a communication and change management problem as much as a technology one.
"The data show that many organizations are navigating a difficult balancing act," said John Tournet, US chief executive officer of Gallagher's benefits and HR consulting division. "Business leaders are pursuing growth while managing cost pressures, workforce capacity constraints and retention challenges. Organizations that succeed will be the ones that focus on the fundamentals: helping managers lead effectively, creating realistic workloads and ensuring employees understand how their work contributes to organizational goals."
