Dr. Gleb Tsipursky – The Office Whisperer
Nirit Cohen – WorkFutures
Angela Howard – Culture Expert
Drew Jones – Design & Innovation
Jonathan Price – CRE & Flex Expert
Organizational culture — the shared values, behaviors, and norms that shape how work actually gets done — has never carried more weight than it did in 2025.
As organizations across various industries grappled with the rapid adoption of AI, economic uncertainty, heightened workforce anxiety, and evolving expectations around diversity, equity, and inclusion (DEI), culture became both a stabilizing force and a point of tension.
Leaders were forced to confront a difficult reality: transformation was accelerating faster than people, systems, and leadership capabilities could cope with.
In 2025, organizational culture placed greater emphasis on authenticity, trust, fairness, and psychological safety rather than abstract ideals and surface-level values. Decisions around technology, flexibility, communication, and workforce design increasingly revealed cultural fault lines — between intention and execution, leadership perception and employee experience, and ambition and capacity.
The year ultimately exposed those organizations where culture was merely symbolic.
Drawing on Paradigm’s report The State of Workplace Culture: 2025 Trends and a Look Ahead at 2026, The Institute for Corporate Productivity’s (i4cp) 2026 Priorities & Predictions report, and interviews with workplace culture experts, Allwork.Space identified the defining cultural themes of 2025.
Here’s a closer look at what organizations learned about culture under pressure, how AI, DEI, and engagement reshaped priorities, and what leaders must now focus on to build resilient, people-centered cultures for 2026 and beyond.
What 2025 Revealed about Workplace Culture
Across industries and regions, 2025 emerged as a year of pressure, tension, and unfinished transformation for workplace culture. Research from Paradigm reveals that organizations experienced a convergence of forces: rapid AI adoption, economic uncertainty, heightened scrutiny of DEI (particularly in the U.S.), and political instability.
Employers were forced to balance productivity against rising workforce anxiety, difficult cost decisions, and shifting expectations of what culture should deliver.
Fortunately, most organizations chose to recalibrate their approach to culture rather than abandon it completely. Paradigm’s data, drawn from more than 200 organizations and talent insights, found that 93% of companies reported leaders were equally or more committed to culture than the year before, and 96% had continued to invest in fair processes. However, some critical initiatives were scaled back. For instance, employee feedback collection, benefits adoption, and childcare support all declined (reflecting tighter budgets and a narrower focus on core priorities).
AI played a central but uneven role. Half of organizations reported using AI tools to support culture, with adoption concentrated among large enterprises and technology firms. Relatively few organizations, however, applied AI strategically, with only 36% using it to inform cultural initiatives and a mere 17% using it for benchmarking. This uneven adoption widened the gap between organizations that turned AI investment into meaningful results and those still experimenting without clear direction.
Allwork.Space also reviewed insights from The Institute for Corporate Productivity’s (i4cp) annual Priorities & Predictions Report, authored primarily by Kevin Oakes, Founder and Chief Strategy Officer at i4cp (and author of Culture Renovation). The report characterizes 2025 as a year marked by intensifying layoffs at large, iconic organizations, hiring decelerating, and near-zero job creation. The report also notes growing recognition that AI is reshaping work faster than culture, leadership practices, and operating models can adapt.
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David Grossman is an author, consultant, speaker, and one of America’s foremost authorities on leadership and change communication inside organizations. He is also the Founder and CEO of The Grossman Group.
“The defining trend of 2025 was reaching what I call the ‘change tipping point.’ Our research with The Harris Poll found that organizations averaged nearly three major changes in just the last two years, with 83% of business leaders reporting they’re experiencing more major change than ever before,” Grossman informed Allwork.Space.
Grossman revealed that AI ranked as both the top driver of transformation and the hardest change to execute. He also highlighted a critical mismatch: employees can realistically absorb one to two major changes per year, while leaders expect three to four. This gap between what Grossman defines as change velocity and human capacity became the central tension defining workplace culture in 2025. Grossman revealed that although leaders increasingly recognized the importance of visible and authentic communication, a perception gap remained: 99% of leaders believed they communicated change effectively, but one in four employees disagreed.
In 2025, changing work patterns, including schedule flexibility, also shaped organizational culture. Speaking to Allwork.Space, Andrew Hulbert, Chair of the Institute of Workplace & Facilities Management, highlighted the widespread acceptance that hybrid work is here to stay, alongside predictable patterns of lower office utilization at the start and end of every week. Hulbert states that although interest in AI accelerated in 2025, many organizations struggled to move from ambition to effective implementation, often adopting tools before fully understanding their purpose or having the capacity to utilize them strategically. Hulbert also notes that greater efforts to create positive workplace cultures (enabling people to enjoy their time at work, rather than remaining at home) were also a priority in 2025. These efforts include wellbeing initiatives, driven in part by rising levels of loneliness among younger workers. Diversity, equity, and inclusion (DEI) also continued to be a focus, but in very different ways (explored in the next section).
In many ways, 2025 functioned as a stress test for workplace culture. Organizations felt the full force of AI, economic pressures, and social complexity, often without the systems or skills needed to respond effectively. Rapid change and communication gaps fueled burnout, disengagement, and conflict. Employees needed clarity, purpose, and realistic expectations to navigate these challenges; yet, employers made key missteps—relying too heavily on policies instead of practical skills and real-world application, underestimating the human cost of failed change, and overestimating their employees’ capacity.
However, 2025 also highlighted the power of a strong workplace culture, with many distributed teams remaining engaged and motivated by shared norms despite physical distance. Cali Williams Yost, Founder and CEO of the Flex+Strategy Group, illustrates this insight in a recent Allwork.Space podcast. Yost emphasizes that culture is shaped less by where people work and more by how work is designed and led. When approached intentionally, flexible work can strengthen culture by boosting performance, engagement, and trust—but only if expectations are clearly defined and consistently applied across teams.
The Impact of AI, DEI, and Employee Engagement on Culture in 2025
According to the Paradigm report, workplace culture in 2025 was influenced by three key developments: the uneven adoption of AI, rising pressure on leaders to sustain culture initiatives (including DEI), and a stronger emphasis on implementing best practices that support resilient, high-performing, engaged, and future-ready organizations. AI, DEI, and employee engagement have become increasingly central to workplace culture. Drawing on Paradigm’s data and expert analysis, we explore how these three trends impacted organizational culture in 2025.
AI Adoption: Key Issues and Leadership Imperatives
AI adoption accelerated rapidly in 2025. Large enterprises and technology companies led the way, using AI for drafting communications and analyzing data. Many organizations, however, grappled to leverage AI effectively, often implementing tools without fully integrating them across systems or linking them to broader objectives.
Cali Williams Yost explained to Allwork.Space why AI adoption often falls short: “Success in adopting AI hinges on valuing and training people first.” Yost also indicated research from Columbia Business School and BCG that supports this, finding that employee-centric organizations (those prioritizing flexible work and professional development) are seven times more likely to report effective AI adoption. Yost believes that effectively integrating AI requires addressing both the skills shortage and the values gap through an employee-first approach.
Key challenges with AI adoption this year included:
- Changes in how employees work, make decisions, and interact.
- Unclear policies for data use, leading to confusion and ethical concerns.
- Job security fears (that AI will replace human roles).
- Heightened resistance in organizations with entrenched routines, exacerbated by poor communication.
AI adoption was successful when AI was integrated, and visible support was provided from senior leaders (equipping employees with training to work alongside AI, and communicating transparently about its capabilities and limitations).
David Grossman informed Allwork.Space that AI adoption must now move beyond experimentation to become a trusted part of everyday work: “Leaders need to shift the conversation from fear to value by clearly articulating how AI makes work easier, faster, and more meaningful for employees.” This means modeling AI use visibly, training teams in real-world applications, and ensuring adoption is people-first rather than purely technology-driven.
DEI Initiatives: Key Issues and Leadership Imperatives
DEI efforts faced heightened scrutiny in 2025, particularly in the U.S. Some companies responded by embedding inclusion into core processes such as hiring, performance management, and leadership development, while moving away from standalone programs.
Andrew Hulbert notes that in the UK, the influence of global workplace developments created mixed signals and uncertainty around DEI. Some organizations strengthened their DEI initiatives, while others scaled back their programs. Hulbert observes, “All organizations need to understand what their stance on DEI is. Redefine their cultures based on this DEI approach and rebuild their structures around this. Some organizations will go big on DEI, and some will go back on DEI. That’s understood. Workplaces need to agree on their cultural approach to DEI and be consistent.”
Challenges for DEI in 2025 included:
- Political backlash and scrutiny.
- A rebranding of DEI that diluted focus on equity goals (some companies replaced the word ‘equity’ with ‘belonging’ or ‘opportunity’).
- Internal organizational conflict caused by reduced visibility of DEI efforts.
- Uneven regional responses (due to differences in legal frameworks).
In 2026, efforts to strengthen DEI will focus on integrating it into organizational culture rather than treating it as a set of standalone programs. More organizations will embed fairness, equity, and inclusion into everyday operations, including all hiring and promotions processes.
Employee Engagement: Key Issues and Leadership Imperatives
Engaged employees reinforce culture, and culture in turn strengthens engagement, boosting productivity, loyalty, and retention. In 2025, employees placed greater value on meaningful engagement over superficial perks; however, employers were not always willing or able to meet these expectations.
Challenges included:
- Shallow initiatives that failed to facilitate engagement.
- A lack of cultural alignment among some hybrid and distributed teams.
- Inconsistent employer-to-employee feedback and recognition.
- Evolving expectations towards more meaningful work.
- Weak alignment between engagement initiatives and organizational culture.
Grossman highlights the urgency of addressing employee engagement (and wellbeing) gaps: “While 89% of managers believe their people are thriving, only 24% of employees actually report thriving. That disconnect is dangerous. Engagement in 2026 will depend on intentional, human conversations, regular check-ins focused not on output, but on capacity, energy, and how change is actually landing on employees as people.”
Grossman emphasizes that leaders must recognize employees as individuals (considering differences in motivation, learning styles, and personal circumstances) to engender greater commitment and resilience.
In 2026, leaders should prioritize engagement through programs designed to foster meaningful connections, providing real-time feedback and continuous recognition, and supporting hybrid and flexible work.
Looking Ahead: Workplace Culture in 2026
I4cp’s Priorities & Predictions report forecasts that in 2026, AI, employee engagement, and DEI will continue to shape culture, with high-performing organizations leveraging these forces strategically to build adaptable, resilient, and people-centered workplaces.
Here are 6 additional predictions on what will influence workplace culture in 2026:
1. Trust, Transparency, & Ethics
Workforce restructuring, including AI-driven role changes, will test organizational culture in new ways. Employees will expect honesty—particularly regarding job redundancies—while transparency, empathy, and ethical decision-making will emerge as core cultural differentiators.
Frank Weishaupt, CEO of Owl Labs, an expert in scaling tech companies and a leading voice on flexible, hybrid, and the future of work, spoke to Allwork.Space about his predictions for 2026. According to Weishaupt, 2026 is expected to bring increased employee demands for transparency. While only 19% of workers say their companies are not using tracking software, 85% believe employers should be legally required to disclose any monitoring practices. Weishaupt also predicts that organizations will likely be more transparent about how and when employees are monitored, signaling a potential shift in the employer–employee relationship toward greater accountability and trust.
2. Upskilling & Continuous Learning
By 2026, a skills-based approach is expected to move from experimentation to standard practice in high-performing organizations. Continuous learning and adaptability will become the norm, with skills embedded into every role.
According to Andrew Hulbert, AI will remain the top priority for most organizations heading into 2026, but the focus must shift toward reskilling employees. He believes that many organizations moved too quickly in 2025 without sufficient preparation, making readiness a critical focus for the year ahead: “Businesses have to make sure they are ready first, before jumping in.”
3. Human–AI Collaboration
Workplace culture will either evolve to support AI, or AI will become a competitive liability. With the rise of digital work twins and AI-enabled workflows, AI is no longer merely a tool. In this context, psychological safety will extend to employees’ comfort with digital colleagues and with being augmented or mirrored by AI.
Weishaupt predicts a “corporate reckoning” regarding managers’ use of AI in the workplace, noting that companies such as Amazon and Google are reducing middle management as AI assumes routine decision-making and agenda-setting responsibilities.
“In 2026, managers will need to prove they can do what AI currently cannot—drive creative problem-solving, build authentic team culture, navigate complex interpersonal dynamics, and shape strategic direction, ” states Weishaupt. He also believes that organizations must upskill managers to complement AI rather than compete with it, ensuring human judgment and relational skills remain central.
4. Flexibility (in all its Forms)
According to Weishaupt, hybrid creep is intensifying, with mandatory in-office days rising: 34% of employees are office-based four days a week, up from 23% in 2023. At the same time, flexibility has become non-negotiable for many workers. Weishaupt told Allwork.Space that 37% of employees would decline a role that does not offer flexible hours, 34% would not accept full-time office requirements, and 30% require location freedom. Employees are asserting greater control over how and when they work, creating growing tension between employer demands and employee expectations—a trend expected to intensify.
Weishaupt noted that Millennials, Gen Z, and caregivers are driving demand for schedule control, non-linear workdays, and microshifting. As a result, organizations are focusing on flexibility not only in where employees work but also in when they work. Companies that offer more personalized work arrangements—tailored to individual schedules and needs—will be better positioned to attract and retain top talent in 2026.
5. Meaningful Wellbeing Support
In 2026, employee wellbeing will center on meaningful work, trust, resilience, and psychological safety. Traditional perks and policies will no longer be sufficient. Benefits will focus on essentials and financial wellness, while the employee experience will increasingly emphasize autonomy, purpose, and opportunities for growth.
According to Weishaupt, companies are moving beyond what many now describe as “performative wellness” and taking employee burnout more seriously. “With rising costs of going into the office, increasing political tensions with co-workers, and ongoing employee monitoring, it should be unsurprising that 90% of employees reported their work stress levels are the same or worse than last year,” reports Weishaupt. He also highlights that while organizations once leaned on surface-level perks such as office parties and team-building activities, 2026 is expected to bring a broader rethink—one that prioritizes meaningful support, flexibility, and sustained investment in employee wellbeing.
6. Adaptability & Change Management
In 2026, organizations are expected to start moving away from rigid hierarchies and fixed roles. Employees will have greater autonomy, career mobility will be encouraged, and managers will develop talent (rather than simply retaining employees). Workplace design will also influence culture, with greater emphasis on spaces that can adapt to support collaboration, social connection, neurodiversity, and overall efficiency. Workplace culture will be defined less by perks, policies, or static values and more by an organization’s ability to adapt and respond to change.
How to Strengthen Culture in 2026
The most powerful drivers of cultural strength come from within the organization itself. When culture is built purposefully and supported across all levels, it can positively impact future performance.
The most resilient organizations treat culture as a responsive system—one that incorporates feedback, listens closely to employees, and equips leaders to act with confidence. This approach positions culture as a strategic long-term advantage.
In 2026, leaders face a difficult balancing act: guiding teams through AI adoption, workforce redesign, and continuous change while sustaining trust, inclusion, and psychological safety. Through building on lessons from 2025, leaders can reinforce culture by focusing on the following areas:
Empower Managers to Lead Culture
Hulbert recommends equipping managers with dedicated time, authority, and practical tools to influence engagement, coach teams, and model the desired behaviors. Leadership investment at this level ensures that culture is experienced across the entire organization.
Integrate Culture into Processes and Systems
Move beyond symbolic initiatives by embedding cultural principles into everyday work, including performance reviews, workflows, and decision-making structures. Clear systems for accountability, recognition, and learning help align everyday actions with organizational values. Leaders must also fully engage employees in any meaningful cultural change.
Prioritize Wellbeing Beyond Perks
According to Weishaupt, this entails offering meaningful support and creating purposeful work experiences. Encouraging healthy work habits that respect work-life balance will help employees feel valued within an organization.
Measure, Monitor, and Adjust Culture
Use real-time data and feedback to identify gaps, understand evolving employee needs, and continuously refine initiatives. Ensure cultural initiatives produce a measurable impact rather than remaining symbolic, to enhance retention and engagement.
Create Values-Oriented Environments
Research by McKinsey highlights the importance of leading with humanity, acknowledging uncertainty, and committing to developing people. Hulbert advocates for building visible organizational values by adopting a values-led leadership approach. Employees are more likely to contribute fully when they feel recognized and appreciated.
Balance Human Impact with Business Strategy
David Grossman describes this balance as “leading with your heart in your head,” explaining that exceptional leaders integrate empathy and strategic thinking rather than choosing between them. His research shows employees value empathy, feedback, and feeling understood as much as they value clear vision and planning, and leaders who balance both are “3.2 times more likely to succeed in major change because they earn full employee buy-in.”
The Key Takeaway for 2026
The lessons of 2025 have set the stage for action in 2026. Maintaining a strong organizational culture requires deliberate effort, including inclusive leadership, shared norms, and ongoing reinforcement through everyday decisions and work design.
2025 exposed the limitations of symbolic initiatives and reinforced the importance of embedding culture into leadership practice, processes, and systems. In 2026, the organizations that stand out will use culture to build trust, encourage innovation, and grow in ways that are fair, consistent, and sustainable.
