As team sizes get smaller and employees are tasked with doing more with less, adopting a purpose-driven company culture can be a changemaker for engagement, productivity, and morale.
By Maggie Mancini
There’s no question that AI acceleration and adoption have fundamentally shifted the way work gets done—and who does it. With large employers increasingly cutting out managerial roles, research from ADP indicates that work teams are shrinking, too. Recently, HRO Today spoke with Amy Freshman, senior director of HR at ADP, to discuss how HR and business leaders can adjust to this leaner world of work as team sizes continue to get smaller and more consolidated.
HRO Today: Research from ADP finds that the average team size has shrunk from 7.4 people per team in January 2019 to 7.2 people per team in May 2025, with larger reductions in some industries. As team sizes get smaller and managers are tasked with doing more with less, how can HR and business leaders continue to build and lead high-performing teams?
Amy Freshman: The trend of declining team sizes creates an opportunity for HR and business leaders to double down on people-centered leadership and reinforce the value of connection. With fewer direct reports, the capacity to build deeper relationships, understand individual strengths and what their people love to do at work may be more available to managers. Leaders can also take the time to understand obstacles their teams may be facing and find ways to help them overcome which will enable them to build trust and connection with their team and across the organization.
According to ADP Research’s Today at Work, when a team leader is not fully engaged, their teams are less than 1% fully engaged. But when a team leader is fully engaged, their teams are 65% more likely to be as well. Regardless of team size, high-performing teams are built from the top down, and by taking a thoughtful, people-first approach to people management, the newfound time spent with your team can be a powerful driver of performance and help bring the best out of your people.
HROT: How can purpose-driven company culture help organizations navigate the “leaner” world of work?
Freshman: A purpose-driven culture becomes even more valuable, because that culture helps anchor the organization with a shared sense of responsibility and meaning in their work. With a deep understanding of an organization’s culture and what inspires and motivates its team members, business leaders can align more closely with their team’s key values, driving connection and engagement.
A positive culture is a core factor of performance within an organization, and while it may be hard to focus on as team sizes are getting smaller, those values are ultimately what helps attract and retain employees for a long time. Employees want to know that they’re a part of something bigger than themselves, so showing that your organization’s culture and values are a business imperative will provide your people with a greater sense of purpose.
HROT: How can HR leaders redesign and redefine employee roles and responsibilities in the wake of these changes?
Freshman: As business teams become leaner, leaders have a unique opportunity to rethink the roles and responsibilities of the employees on their team, while also providing clarity. When organizational changes occur without a clear vision, employees can feel uncertain about their direction, ultimately affecting their engagement and performance at work.
Transparent communication about how roles may evolve and how the organization plans to support, upskill, and retain its people, helps build trust and reduces employee anxiety. Promoting mentorship and offering stretch assignments are great ways to promote growth and development for those employees who have interest in going beyond their day-to-day responsibilities.
There’s a significant opportunity for employers to provide these resources as well: ADP Research shows that only 17% of employees strongly agree their employer invests in the skills they need to advance in their careers. By thoughtfully thinking about the employee experience, organizations can ensure alignment with their people and strengthen their team, even as team sizes shrink.
HROT: How can HR and business leaders maintain or improve employee engagement, morale, and well-being in a work environment where employees and managers are being asked to do more with less?
Freshman: At their core, employees want to know their organization is actively investing in their growth and getting to know them as people and at the same time want to feel connected to a purpose larger than themselves. Leaders should build meaningful relationships with their team members and recognize their accomplishments in timely, authentic ways that work to build their people up.
Offering continuous opportunities for skills development also signals a genuine commitment to employees’ long-term success. When leaders communicate intentionally and provide consistent support, teams feel more confident in doing more with less and can develop an even stronger sense of trust and belonging. 
