Originally published on hrotoday.com
2025 has been marked by prolonged uncertainty, a stagnant employment market, and rapid. AI adoption. While the hiring market will likely soften in the new year, low turnover, declining engagement, and a focus on skills rather than traditional experience will continue to challenge the workforce. As companies prepare for the new year, here are four trends that HR leaders are anticipating in 2026.
PREDICTION ONE
As the Employment Market Begins to Thaw, Many Organizations Will Continue to Choose Headcount Stability Over Expansion
Research from ZipRecruiter finds 75.8% of employers cite retention as their top priority for 2026, far outweighing recruitment and replacement. With hiring at a standstill, employees are reticent to leave, explains Josh Bersin, global industry analyst and CEO of The Josh Bersin Company.
“For as long as the economy slows, this will continue, and hiring managers are just going to find it harder to attract skilled professionals,” Bersin adds. Regardless of market conditions, taking care of, training, and engaging employees in meaningful work is always an important strategy, because the time and cost of hiring can result in six months to a year of a new employees’ salary.
“Retention should always be a top priority for an organization, but in this climate it’s even more important,” says Lydia Wilson, chief people officer at Dexian. “During the recruiting process, HR leaders need to look at how potential candidates will integrate within a generationally diverse company culture, and leaders will be looking at how the company’s culture can prioritize the needs of individuals wherever they are in their career journey.”
Industry trends indicate that organizations will increasingly prioritize career advancement, skills development, and upskilling, particularly in the context of AI, adds Maggie Driscoll, chief people and culture officer at Blackbaud. This shift may lead to fewer new hires and greater investment in talent development.
Purpose-driven organizations that offer meaningful work, flexibility, and opportunities to grow will continue to stand out, says Terilyn Monroe, chief people officer at Guardant Health. Culture, leadership, and employee experience will remain competitive differentiators in attracting top talent.
“For companies, I believe sourcing talent will get easier thanks to AI-powered tools. However, hiring the right candidate may become more challenging,” Monroe says. “Today’s applicants can use AI to quickly refresh their resumes with language aligned to a company’s posted job description. While we may see an uptick in applicant volume, ensuring we have a strong interview process and building manager capability to assess candidates will be key.”
This is the moment for HR leaders to get ahead by building skills-centered systems, says Annie Rosencrans, director of people and culture at HiBob. That means investing in internal talent marketplaces, creating learning pathways, and using AI to match people with opportunities.
“The next great hiring wave won’t be defined by how many people join your company but by how well your people can grow, adapt, and thrive within it,” Rosencrans says. “We’re not waiting for a rebound. We’re witnessing a reset.”
PREDICTION TWO
AI Adoption Will Expand, and HR Leaders Need to Clearly Communicate and Empower Employees to Embrace AI Strategy
There has been a lot of discussion about the type of impact that AI is having—or will have soon—on job security, displacement, and the future of work. Yet, employees at different levels of the workforce are experiencing these concerns in a variety of ways.
Certain types of work like call centers, schedulers, IT support, and help desk workers are highly vulnerable to structural change from AI, Bersin says. Marketing writers, video editors, and other creatives may need to upskill. Even analytics jobs—like data analysts or software engineers—face an increased risk of task automation.
The real concern is about readiness, rather than vulnerability, says Jenny Shiers, chief people officer at Unily. The company’s research shows that while 77% of CEOs believe AI will usher in a new business era, over half of enterprises lack an AI policy, and a third of employees have never used AI at work.
“We believe a new breed of what we call ‘supermanagers’ are needed, and that means focusing on helping people learn about AI, experiment, and invent,” Bersin says. “AI innovation is now part of every job, so managers need to be ready to help their teams reinvent their jobs. And, as AI reduces routine work, every employee needs to be more business savvy so they can focus on bigger, more complex value-add activities.”
Upskilling and continuous learning should be at the forefront of every organization’s growth and development strategy, says Eric Tinch, Chief People Officer at Sutherland. The company subscribes to the “human in the loop” strategy where tech-enabled solutions and AI work together to expand human capabilities. This means providing defined learning journeys for every level of the organization that emphasize core skills, tech adoption, and shifting repetitive tasks to tech-enabled solutions.
“Jobs have always been threatened by progress,” Wilson says. “From the industrial revolution to bots and software, there has always been talk about efficiency, effectiveness, and job displacement. As machines do more, companies will require more human skills, and most notably empathy, compassion, creativity, judgment, and communication.”
Research from Dexian finds 92% of employers and 94% of employees believe human skills like communication, creativity, and emotional intelligence will matter more as AI adoption grows. It’s more about evolution than elimination, she says.
“Employees want to hear clear communication about a company’s AI strategy and how it potentially affects them, Wilson says. “They need to understand the way that their human skills are being developed to face future changes.”
PREDICTION THREE
A Gap Between Employee and Employer Perceptions of Company Culture Will Create Challenges for Improving Engagement, Well-Being, and Productivity
Research from the Arbinger Institute reveals a disconnect in how senior executives view culture initiatives and how the rest of the company experiences them. Leaders see culture through the lens of intent, strategy, and programs. Employees experience them through impact, Shiers says.
“While leadership teams often believe their culture is well understood, research shows that 72% of frontline employees don’t fully grasp their company’s strategy,” Shiers explains. “That disconnect doesn’t mean disengagement, it means translation is missing. When employees can’t see how strategic intent connects to their own reality, clarity breaks down, and culture feels inconsistent.”
Perception gaps can grow quickly, and once they harden, they’re often hard to close, Monroe says. The best way to stay aligned is by listening—through observation, conversations, questions, and honest feedback.
To narrow the gap, Shiers says organizations should consider these three strategies.
- Turn listening into action. Many companies collect feedback but fail to close the loop. Creating always-on systems through integrated pulse surveys, open forums, and AI-powered sentiment tracking can give leaders a real-time view of what employees are feeling—and then importantly, they need to act on it.
- Equip managers as culture carriers. Managers are the single biggest influence on how employees experience culture, yet they’re often under-equipped to communicate it. Train middle managers to be confident communicators, so the culture message becomes consistent and credible.
- Make employees co-authors of culture. The companies that thrive culturally are ones that focus on embodying culture, rather than simply promoting it. Investing in employee participation through role modeling, cultural ambassadorships, and employee resource groups can create a shared mission that enables employees to believe in what they help build.
“There are often disconnects between how senior executives view culture initiatives compared to how the rest of the company perceives them,” Tinch says. “There could be many causes behind this gap in cultural perception, but in most cases, the answers lie within an organizations’ level of free-flowing interactions between executives and the rest of the organization.”
Since senior executives are traditionally more focused externally and not so much internally, this gap is the natural outcome, Tinch adds. However, without intentionality surrounding “internal interactions,” this gap can grow into a full-blown disconnect.
“It’s not about how many programs a company can offer; it’s about offering ones that genuinely resonate with employees and align with the culture you are building,” Monroe says. “Investing in culture and wellness signals to employees we care about their experience. When people know we care, that builds trust, trust leads to engagement, and engagement leads to productivity.”
PREDICTION FOUR
As AI Takes on More Transactional Work, Human Skills Will Define HR’s Future Impact—and Skills-Based Hiring Will Be Instrumental in Attracting Top Talent
Even as AI transformation accelerates, it does not replace the human judgment, wisdom, and experience necessary for most jobs, Bersin says. It simply replaces routine tasks. In every role as AI is introduced, it’s the humans who train the AI, check and interpret the AI for accuracy, and decide what to do with the information being generated.
Research from Workday finds that 81% of leaders believe adopting a skills-based approach drives economic growth by improving productivity, innovation, and organizational agility. HR leaders looking to adopt the approach should consider the following, explains Rosencrans.
- Start with a clear skills framework. This should define the technical, behavioral, and leadership capabilities needed for success.
- Use AI tools to assess, map, and match employee skills to business needs. Goal-setting and performance mapping can help employees understand where they need to develop and pursue training programs that specifically target those skills.
- Offer upskilling and training. These are integral steps to ensuring employees hone current skills and develop new ones that will help them propel their careers forward and advance the business as a result.
- Reimage job descriptions around skills rather than credentials. By promoting continuous learning, organizations empower employees to grow and adapt.
Research from TestGorilla finds 72% of employers and 82% of job seekers believe that holistic hiring that incorporates candidates’ skills, personality, and culture alignment leads to better hiring decisions and improved business outcomes.
“Sometimes the best talent can come from the most unexpected places,” Shiers says. “If a company focuses too heavily on a degree for hiring, they are missing out on potentially superb candidates who may have gotten their education or role-related experience through another channel. When building teams and culture, HR leaders and hiring managers should always be looking at the whole person rather than how they come across on paper. This starts with the hiring process.”