Global Talent Shortages Are Getting Worse as Employee Engagement Drops, Study Shows
The study suggests AI is partially to blame for employees becoming disengaged at work.
Expanding your business across borders sounds like a growth win — access to new talent pools, diverse perspectives, and round-the-clock productivity. But a major new study suggests that for many companies, global hiring is creating as many problems as it solves.
HR platform Atlas HXM surveyed more than 400 senior leaders across the U.S., Canada, the U.K., the Netherlands, and Ireland in late 2025. What they found should give any globally-minded business leader pause.
Expanding your business across borders sounds like a growth win — access to new talent pools, diverse perspectives, and round-the-clock productivity. But a major new study suggests that for many companies, global hiring is creating as many problems as it solves.
HR platform Atlas HXM surveyed more than 400 senior leaders across the U.S., Canada, the U.K., the Netherlands, and Ireland in late 2025. What they found should give any globally-minded business leader pause.
Finding Great People Is Getting Harder — Everywhere
Nearly half of companies with international workforces now describe attracting and retaining talent as "very" or "extremely" challenging. That's a level of stress on par with staying legally compliant across multiple countries — anyone who's dealt with cross-border HR law knows exactly how painful that is.
U.S. companies reported slightly less difficulty than the global average, but even so, nearly four in ten American leaders said they're feeling the squeeze.
Nearly half of companies with international workforces now describe attracting and retaining talent as "very" or "extremely" challenging. That's a level of stress on par with staying legally compliant across multiple countries — anyone who's dealt with cross-border HR law knows exactly how painful that is.
U.S. companies reported slightly less difficulty than the global average, but even so, nearly four in ten American leaders said they're feeling the squeeze.
Engagement Is Quietly Eroding
Here's the part that should really get your attention: almost seven in ten leaders said employee engagement across their international teams is slipping. The culprits? Higher turnover, more frequent job-hopping (flagged by 50% of respondents), and what the report calls "cultural friction" — the invisible drag that happens when distributed teams struggle to collaborate across different work cultures and expectations.
Add to this the rapid adoption of AI tools (54% of companies reported increased staff AI use), and you have a workforce that's simultaneously more technologically capable and less emotionally invested.
Here's the part that should really get your attention: almost seven in ten leaders said employee engagement across their international teams is slipping. The culprits? Higher turnover, more frequent job-hopping (flagged by 50% of respondents), and what the report calls "cultural friction" — the invisible drag that happens when distributed teams struggle to collaborate across different work cultures and expectations.
Add to this the rapid adoption of AI tools (54% of companies reported increased staff AI use), and you have a workforce that's simultaneously more technologically capable and less emotionally invested.
The Return-to-Office Tension Making Things Worse
One friction point stands out: return-to-office mandates. While 77% of leaders surveyed support RTOs on average, U.S. leaders are even more bullish — 83% are in favor. The problem? Their global employees, particularly younger Gen-Z workers, increasingly prioritize flexibility and work-life balance.
Atlas frames this as a "growing tension between global hiring ambitions and location-based workforce policies." In other words, you can't recruit globally with a local mindset.
One friction point stands out: return-to-office mandates. While 77% of leaders surveyed support RTOs on average, U.S. leaders are even more bullish — 83% are in favor. The problem? Their global employees, particularly younger Gen-Z workers, increasingly prioritize flexibility and work-life balance.
Atlas frames this as a "growing tension between global hiring ambitions and location-based workforce policies." In other words, you can't recruit globally with a local mindset.
So What Can You Actually Do About It?
The report points to several practical fixes worth considering:
Rethink where you're looking. Many companies are over-reliant on traditional hiring markets like Western Europe and Canada. Expanding searches into regions like the Middle East and Africa could open up significantly underutilized talent.
Audit your job postings. Inconsistent job titles and salary offers that don't reflect local norms are quietly killing your applications before they even start.
Drop the degree checkbox. Traditional qualification requirements don't translate universally. This is especially true for AI skills, which are now harder to source than IT staff or engineers, making them the defining competitive edge for new hires.
Design for engagement deliberately. As Atlas's Chief HR Officer, Lulu Rufael put it, "global hiring is accelerating faster than engagement strategy." Her point is worth sitting with: employee engagement doesn't scale on its own. Distributed teams need intentional culture-building, not just a Slack workspace and a quarterly all-hands.
The report points to several practical fixes worth considering:
Rethink where you're looking. Many companies are over-reliant on traditional hiring markets like Western Europe and Canada. Expanding searches into regions like the Middle East and Africa could open up significantly underutilized talent.
Audit your job postings. Inconsistent job titles and salary offers that don't reflect local norms are quietly killing your applications before they even start.
Drop the degree checkbox. Traditional qualification requirements don't translate universally. This is especially true for AI skills, which are now harder to source than IT staff or engineers, making them the defining competitive edge for new hires.
Design for engagement deliberately. As Atlas's Chief HR Officer, Lulu Rufael put it, "global hiring is accelerating faster than engagement strategy." Her point is worth sitting with: employee engagement doesn't scale on its own. Distributed teams need intentional culture-building, not just a Slack workspace and a quarterly all-hands.
The Bottom Line
If you're skeptical about international hiring given today's political climate around immigration, consider this: 52% of organizations in the survey are planning to expand their international operations within the next 18 months. And 92% of U.S. firms say they're prepared to navigate new or shifting immigration rules.
Going global isn't slowing down. The companies that will win aren't just the ones hiring across borders — they're the ones thoughtful enough to make it actually work.
If you're skeptical about international hiring given today's political climate around immigration, consider this: 52% of organizations in the survey are planning to expand their international operations within the next 18 months. And 92% of U.S. firms say they're prepared to navigate new or shifting immigration rules.
Going global isn't slowing down. The companies that will win aren't just the ones hiring across borders — they're the ones thoughtful enough to make it actually work.