Hilti North America

Evgeniya Tikhonova

When I attended Society for Human Resource Management (SHRM) 2025 this summer, one message echoed louder than any keynote: retention is at a tipping point. Gallup’s research was cited repeatedly, revealing a grim truth: employee engagement in the U.S. has been flat for 25 years and is now declining. Despite companies investing billions in engagement programs, the needle hasn’t moved. Why? Because we’ve been solving the wrong problem. It’s not the benefits. It’s not the office perks. It’s not the surveys. It’s the managers.

Strategy, culture and systems matter—but when it comes to retention, nothing is more powerful than the manager-team relationship. Gallup finds that 70 percent of engagement variance is tied to the manager. Even in companies with uniform policies, engagement and turnover vary widely, because of who’s leading.

The Overlooked Middle Managers

More specifically, it comes down to the middle manager. They lead the largest population of employees, manage frontline teams and shape the daily work experience at scale. Their impact is enormous—yet they are often the least prepared and least supported. These are often first-time leaders—promoted not for their leadership potential, but for their technical excellence and hard skills. They know how to get the job done, so we reward them with a team. But we don’t equip them to lead it.

While companies frequently invest heavily in developing senior executives, middle managers, especially new ones, often receive far less. At best, they’re given a basic introductory training and perhaps some optional online courses. At worst, they’re left entirely on their own. And yet, we expect them to deliver engagement, retention and performance. Then we hand them the survey results and tell them to “fix it.”

Caught in the Middle

This gap was a recurring theme at SHRM. We’re asking middle managers to do more with less: lead through change, retain talent, prevent burnout and deliver results, with little to no real-time support. It’s no wonder they’re burned out.

And we’re paying the price. According to Great Place to Work, middle managers are under more pressure than ever, often caught between the expectations of executives and the demands of their teams. Gartner reports that 75 percent of HR leaders say managers are overwhelmed by expanding responsibilities. Seven in ten believe they’re not adequately prepared to develop their people. As a result, fewer people are aspiring to take on these roles, creating a leadership gap that threatens the future pipeline.

Middle managers are force multipliers. They turn strategy into action, shape employee experience and drive or block innovation. Yet many remain underdeveloped, unsupported and overlooked. In an era where flexibility, inclusion and growth are essential, treating middle management as a stepping stone to senior roles is a costly mistake. As McKinsey notes, companies must stop viewing it as a “waiting room” and start treating it as a destination—a vital, rewarding leadership layer in its own right.

The Leadership AI Co-Pilot

This is where leadership AI co-pilots make a transformational impact. These tools help leaders master skills from traditional training, offering personalized, realtime guidance that improves how they communicate, coach and retain talent—right when it matters most.

At the SHRM Expo, I saw one of the most compelling applications of AI for leadership. A new wave of startups is building AI co-pilots—not to replace leadership, but to elevate it. Their mission echoes SHRM’s 2024 theme: AI + HI = ROI. The message is clear—only by combining artificial and human intelligence can we drive lasting performance.

These co-pilots use behavioral frameworks to create manager and team profiles, and then deliver tailored guidance: giving feedback, running one-on-ones and delegating. It’s like having a leadership coach in your pocket. For large companies with deep middle-management layers, the breakthrough isn’t just efficiency—it’s unlocking leadership potential at scale.

Unlocking the Human Side of Performance

Imagine a world where every manager feels confident walking into a tough conversation or knows how to adjust their communication style to truly connect with their team. That’s what these co-pilots enable. And the impact goes beyond productivity. We know that people don’t leave companies—they leave managers. If AI can help even 10 percent of your managers build stronger, more trusting relationships, the ripple effect on retention, culture and performance is enormous.

And yet, traditional development methods—while necessary—aren’t fast enough. They don’t scale. They often only reach the top few percent. AI co-pilots change that. They offer just-in-time support for every manager, every day. They’re not replacing managers, they’re enhancing them. In the construction industry, especially, where frontline leaders are managing dispersed teams in high-pressure environments, this kind of support isn’t just helpful—it’s transformational. These managers are often promoted from the field with little preparation. They’re expected to lead teams, ensure safety, deliver on time and now, retain talent in one of the most competitive labor markets we’ve ever seen. We can’t afford to leave them to figure it out alone.

Equip the Leaders Who Matter

It’s time to stop outsourcing engagement to HR or waiting for the next big corporate initiative to magically fix it. Engagement doesn’t live in programs or policies. It lives in everyday interactions between managers and their teams. Let’s start empowering the people who make the real difference: the managers. And let’s give AI co-pilots that help them lead with clarity, empathy and confidence.

It’s not about adding another tool. It’s about changing the game. The companies that will win in the next decade are not the ones with the most perks—they’re the ones with the strongest managers. Let’s stop leaving leadership to chance. Let’s invest where it matters most: in the people leading people.