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2026

State of the Work: California

California

In the State of Work 2025: California, TriNet surfaces what's really happening inside small and medium-sized businesses across the state — from both sides of the desk.

California employers and employees agree on more than they disagree on. But the gaps that do exist are significant: employers consistently overestimate how satisfied employees are with their hours and balance, sharply underestimate turnover risk, and misread why their people actually leave. This report gives leaders a clear-eyed look at those blind spots — and what to do about them.

Based on surveys of 90 employers and 46 employees across California-based SMBs. Data collected June 30–July 2, 2025.

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Satisfaction

Work/Life Balance: California Employers Feel It. Employees Less So.

Employers and employees in California are reasonably aligned on how many hours get worked each week - but that alignment breaks down fast when you ask how people feel about it. Employers are more personally satisfied with their own work/life balance, and they underestimate how many employees feel overworked by a significant margin.

of California employers report some level of satisfaction with their work/life balance

of California employees report the same - a 17-point gap

The overwork gap

Employers believe only about a quarter of employees feel they work too many hours. But 43.5% of employees say they do - including 17.4% who say “extremely too many.” California employees report higher rates of feeling overworked than the national average (43.5% vs. 32%).

Work/Life Balance Satisfaction

"How satisfied are you with your work/life balance?" | Employer = personal satisfaction. Employee = self-reported.

Item	Very Dissatisfied	Dissatisfied	Somewhat Dissatisfied	Neither	Somewhat Satisfied	Satisfied	Very Satisfied
Employer	1 %	3 %	2 %	2 %	18 %	43 %	30 %
Employee	9 %	4 %	4 %	9 %	17 %	28 %	28 %

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Engagement

Employers See High Engagement. Turnover Risk Tells a Different Story.

Most California employers are confident their workforce is engaged — and employees largely agree they're committed. Half of California employees describe themselves as extremely engaged. But that engagement coexists with high turnover intent, and employers sharply underestimate how many of their people are looking.

95.6

of California employers say employees are moderately or extremely engaged

76.1

of employees say the same about themselves — with one in four only somewhat or slightly engaged

28.4

of employers believe fewer than 10% of their workforce is looking — the reality is 52.2%

One in nine California employees plans to change jobs within three months.

Potential turnover risk - including those open to looking — reaches 52.2%, with 37.0% planning a move within the year. Employers largely believe fewer than 25% of their people are looking.

Employee Engagement Levels

"How engaged are employees at work?"

Item	Not at all Engaged	Slightly Engaged	Somewhat Engaged	Moderately Engaged	Extremely Engaged
Employer	0 %	0 %	4 %	48 %	48 %
Employee	0 %	4 %	20 %	26 %	50 %

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Knowledge

AI Skills Are Rising on Both Sides - But a Readiness Gap Remains

California employers and employees both recognize that AI expertise is becoming essential. Employees in this state outpace the national average in prioritizing AI skills development (47.8% vs. 36% nationally). But while employers are confident their people have what they need to succeed today, employees are far less certain - and that confidence gap points to a real risk in future workforce readiness.

of California employers believe employees have the knowledge and skills to succeed (yes or mostly)

73.9

of employees say the same - with nearly 1 in 4 saying only “somewhat”

47.8

of California employees say AI expertise is a skill they need to develop - well above the 36% national average

Skills Employees Need to Develop (Next 3+ Years)

"Which skills will be most important to develop?" | Note: California employees rank AI Expertise more than 10 points higher than employers estimate.

Item	Upskilling	Leadership/Mgmt Skills	Creative Skills	Data Analytics	Reskilling	AI Expertise
Employer	66 %	56 %	50 %	54 %	48 %	37 %
Employee	22 %	52 %	44 %	33 %	35 %	48 %

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Empowerment

Employers See an Empowered Workforce. Employees Want Flexibility and Mentorship.

California employers and employees find common ground on the basics of empowerment - training and development rank near the top for both. But the agreement gets thinner from there. Employers consistently rate empowerment factors higher than employees experience them, and employees place unusually high value on flexibility and mentorship.

54.4

of employers say training and development defines an empowered employee experience

50.0

of employees instead put flexibility in work location at the top, with mentorship close behind at 45.7%

32.6

of employees say information is shared freely vs. 48.9% of employers who believe it is

Why employees leave — and what employers think

This is one of the defining findings of the California report. Employers believe better pay tops the list of departure reasons (40.0%). Employees invert it: better benefits (37.0%) and work/life balance (34.8%) outrank pay (32.6%). Compensation-first retention strategies may be solving for the wrong problem.

What an Empowered Experience Looks Like

"What does empowerment look like at work?"

Item	Training & Development	Info Shared Freely	Employee Input	Tech Resources	Autonomy Personal	Ownership Work	Mentorship	Flex Work Location
Employer	54 %	49 %	46 %	44 %	42 %	42 %	37 %	40 %
Employee	48 %	33 %	41 %	39 %	35 %	39 %	46 %	50 %

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Benefits

Benefits Are the Top Reason Californians Leave. Employers Are Misreading Which Ones Matter.

When California employees say why they leave, benefits come first, ahead of pay. Yet employers consistently misjudge which benefits carry the most weight, underreading the value employees place on retirement and mental health while over-emphasizing more traditional perks. The takeaway isn't that benefits matter less than employers think. It's that the benefits employees actually prioritize aren't always the ones employers lead with. As benefit budgets face scrutiny, knowing where employees place value is what separates a package that retains from one that simply exists.

37.0

of California employees name better benefits as a reason they leave, ahead of better pay (32.6%), making it the most controllable retention lever an employer has

39.1

of employees rate retirement plans (401(k)/pension) “Extremely Important” vs. 31.5% of employers, with employees skewing to the top tier more than employers expect

34.8

of California employees rate mental health coverage “Extremely Important,” and they weight it toward “exceptional rather than adequate” more than employers assume

Benefit Importance — "Extremely Important" Ratings

"% rating this benefit 'Extremely Important' when looking for a job" | Note: Employees rate retirement and mental health higher than employers assume.

Item	Medical Insurance	Pension & Retirement (401k)	Paid Vacation/Sick Time	Life Insurance	Dental Insurance
Employer	46 %	32 %	42 %	29 %	46 %
Employee	37 %	39 %	33 %	26 %	30 %

Item	Mental Health Coverage	Vision Insurance	Parental Leave	Childcare Assistance	Education Reimbursement
Employer	32 %	36 %	33 %	25 %	34 %
Employee	35 %	30 %	33 %	26 %	30 %

Where employers overestimate

Employers tend to over-index on traditional benefits like dental, medical, and paid vacation at the very top tier, while employees register those as important but spread their answers across “moderately” and “extremely.” Meanwhile employees place more weight than employers expect on retirement and mental health. Both groups rank core benefits like medical and parental leave among the highest priorities overall, so the issue isn't whether benefits matter. It's matching the design to what employees actually value. The report's own conclusion is direct: the employers who hold California talent are the ones who invest in benefits design, not only in competitive salaries.

Download the California Report

HR Expectations

Both Sides Want HR Available Around the Clock — Employers Overwhelmingly So

California employers and employees broadly agree: HR shouldn't be a 9-to-5 function. Employer endorsement of always-on HR access is near-universal and far above the national average. Employee agreement is a solid majority too, though a meaningful portion push back, suggesting the expectation isn't universal.

98.8

of California employers agree or strongly agree HR should be a 24/7 function — far above the 57% national employer average

76.1

of California employees agree or strongly agree

52-57

of employees still choose a human HR administrator over an AI assistant across scenarios — a narrower margin than most regions

California employers lead the nation

At 98.8% combined agreement, California employer endorsement of 24/7 HR access far outpaces the national employer average of 57%. The demand for always-available HR infrastructure is strong in this state.

HR Should Be a 24/7 Function

"To what extent do you agree: HR should be a 24/7 function" | Combined Agree: 98.8% employers / 76.1% employees.

Item	Strongly Disagree	Disagree	Somewhat Disagree	Neither Agree nor Disagree	Somewhat Agree	Agree	Strongly Agree
Employer	0 %	0 %	1 %	0 %	23 %	44 %	32 %
Employee	4 %	4 %	7 %	7 %	15 %	33 %	28 %

Download the California Report

AI in HR

Employers Are All In on AI. California Employees Are Right Behind Them.

California is one of the most AI-integrated workforces in the study on both sides. 70.4% of employers use AI at work at least weekly, and California employees post some of the highest adoption anywhere — 56.5% weekly or more, with only 6.5% never using it. Where both groups align is in where AI fits: transactional HR tasks like benefits questions show the strongest match between employee usage and employer acceptance.

70.4

of California employers use AI at work at least weekly — above the 66% national average

56.5

of California employees use AI at least weekly — among the highest in the study

6.5

of employees rarely or never use AI at work

AI Frequency of Use

"How frequently do you use AI at work?"

Item	Never	Rarely (1-2x/yr)	Occasionally (1-2x/mo)	Moderate (1-2x/wk)	Great Deal (multiple/wk)
Employer	0 %	9 %	21 %	42 %	28 %
Employee	7 %	13 %	22 %	33 %	24 %

AI Acceptability vs. Employee Usage by HR Function

Employer acceptability = % rating Moderately or Extremely Acceptable. Employee use = % using Almost Every Time or Every Time.

Item	Payroll Questions	Benefits Questions	Personal HR Questions	Interpersonal Concerns	Performance Reviews	Training & Development
Employer	69 %	62 %	73 %	58 %	70 %	54 %
Employee	36 %	56 %	40 %	48 %	64 %	45 %

Interested in a free HR strategy call?

Download the Full Report

Explore workplace trends across AI, employee engagement, remote work, and more in the full California State of the Workplace report by TriNet.

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