KPMG Survey: Chicago Businesses Expanding Workforce, Office Space in 2025

CHICAGO – Feb. 18, 2025 – Despite concerns around the city and state’s economy, business leaders in Chicago are strategically planning to hire talent and increase their office footprint in 2025, while exhibiting a growing willingness to embrace AI as well as flexible work schedules to recruit and retain talent, according to a new study released today by KPMG LLP, the U.S. audit, tax, and advisory firm.

The KPMG 2025 Perspectives: Local Insights from Chicago report revealed that 84% of city business leaders expect an increase in hiring this year, with 71% planning to increase their office footprint. Business leaders also overwhelmingly (91%) believe the city is well-positioned to attract talent and new businesses, including start-ups, in the next 18 months. Notably, the report also found that business leaders are embracing AI to maintain a competitive edge, with 82% of leaders reporting that generative AI is a top investment priority.

"Chicago's business leaders are not just optimistic—they're trailblazing," said Travis C. Hunter Jr., KPMG Chicago Office Managing Partner. "They’re innovating to stay ahead, offering flexible work arrangements while investing in generative AI.”

The KPMG 2025 Perspectives: Local Insights from Chicago report surveyed 100 business leaders (65% C-suite; all VP-level and above) at companies with annual revenues of more than $50 million on the key challenges and opportunities in driving business growth in the city. Key findings are highlighted below.

Chicago business leaders are confident in the growth prospects for their companies against a backdrop of challenging economic and market conditions.

Hunter: "Though there are headwinds like interest rates and inflation, Chicago business leaders are bullish on the growth prospects of their companies and both the local and U.S. economy."

• Almost all Chicago business leaders are confident (96%) of their company’s growth in 2025, including 59% who said they are “very confident.”
• Chicago business leaders also have high confidence in growth prospects for the city (80%), state (83%), and country (83%). 
• Issues top of mind for their businesses reveal the impact of increased disruption and the challenges of navigating long-term structural change.
  • The top three issues included: economic and market conditions (60%), AI or GenAI implementation (42%) and cybersecurity (32%).
• Most business leaders (84%) said they expect to increase hiring this year.
• 71% of business leaders said they are planning to increase their office footprint, and 21% expect their office footprint to stay the same.
• 83% say the provisions set to expire at the end of 2025 from the Tax Cuts and Jobs Act (TCJA) will have a moderate to high impact to their overall organization.
•  91% of business leaders said they believe the city is well-positioned to attract talent and new businesses, including start-ups, in the next 12-18 months.

Business leaders in Chicago eyed strategic, transformational M&A deals – with the overwhelming majority planning to do so in early 2025. 

Hunter: "Going into 2025, business leaders were getting ready to come off the sidelines, with a significant number of business leaders planning to make strategic transformation deals. This reflects the city's dynamic business environment and its leaders' commitment to growth and innovation.”

• 69% of business leaders are planning strategic transformation deals. 51% are expecting to pursue deal making in the first half of 2025, while 38% of business leaders expect to do so in thel the second half of 2025. Only 3% are waiting until 2026. 
• Business leaders are also pursuing minority investments (42%), bolt-on acquisitions (38%), and joint ventures (36%).  

GenAI is a top investment priority as Chicago business leaders predict AI will have a significant impact on their organization; they also are increasing their investments in cybersecurity to protect their operations and intellectual property from AI threats.

Todd Lohr, KPMG Head of Ecosystems—Advisory: “Chicago is embracing generative AI as a catalyst for innovation, with an overwhelming majority of business leaders viewing it as a top investment priority. While this technology promises to reshape roles and operations, there is a growing focus on implementing AI responsibly with robust governance frameworks. As a hub for cutting-edge solutions, Chicago companies are also fortifying their cybersecurity defenses against AI threats. This forward-looking approach to AI adoption and risk management will be crucial for the city's long-term leadership in technological innovation."

• 82% of business leaders today said they expected AI to have a moderate or significant impact on their organization, compared to 66% a year ago.
• 82% of leaders said GenAI is a top investment priority in their organization.
• 70% of leaders say the integration of GenAI has made them rethink the skills required for entry level roles.
• 80% say their organization is equipped to upskill employees to fully leverage the benefits of the technology.
• 58% of business leaders said they are concerned about the impact of generative AI on company culture, reflecting a growing need to implement AI with safety and governance frameworks in place.
• 85% of leaders said they are confident their organization can access suitable cybersecurity talent and solutions to defend against AI threats.
• An overwhelming majority, 92%, said their organization is increasing investment in cybersecurity to protect its operations and intellectual property from AI threats.

With employee engagement and recruiting and retaining top talent seen as big challenges, Chicago business leaders are open to alternate work arrangements including 4-day work weeks.

Hunter: "Chicago business leaders are thinking outside the box to increase employee engagement and recruit and retain top talent. From considering 4-day work weeks to GLP-1 coverage, business leaders are intent on enhancing their organization’s employee experience."

• The greatest challenges business leaders in Chicago anticipate in 2025 as it relates to their workforce are employee engagement (42%), recruiting and retaining top talent (42%) and upskilling and reskilling initiatives (31%).
• 41% of business leaders say they are providing 32-hour work weeks today due to efficiencies gained by using AI. 
• To enhance their organization’s employee experience, 57% said they would consider a 4-day, 32-hour work week and 53% said they would consider a 4-day, 40-hour workweek. Only 17% said they would consider an arrangement with no formal work schedule (employees work when they choose as long as work gets done) and just 22% said they would consider a 9-day work week, where employees have every other Friday off.   
• 92% feel they have successfully optimized their organization's work arrangements (i.e., hybrid, in-office full time, remote), yet 81% are trying to make their hybrid work arrangements work more effectively and 67% report they have changed their approach to work arrangements in the last 12 months.
• 65% say they are trying to bring employees back to the office more frequently.
• Business leaders cite increased employee engagement and connectivity (64%), increased productivity (64%), driving greater innovation (63%) and improved professional development and mentoring opportunities (62%) and as the primary motivation for encouraging employees to return to the office.
• More than half (51%) said they would consider a job-sharing arrangement for certain roles to avoid potential layoffs, but only 26% said they would consider it for the entire organization. 
• Almost half (47%) of leaders in Chicago said they would consider providing GLP-1 coverage to enhance their organization’s employee experience but have yet to implement it as an option, while 23% already provide coverage today.
• 87% of business leaders believe the Chicago talent pool is superior to other regions across the U.S.

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