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3+ HR Trends to Watch in 2026

HR Industry Insights

12 minutes

January 12, 2026

Written by Hirex

AI is transforming global workforces, with the HR landscape of 2026 reflecting this shift. Korn Ferry's Workforce 2025 survey shows 59% of workers are full-time in offices, but only 19% are satisfied. Additionally, 82% of boards and CEOs expect to cut up to 20% of their workforce in three years due to AI. Organizations struggle to keep pace, as AI saves over 120 hours per employee annually, yet only 5% of HR teams feel prepared to use it effectively.

Large companies lead with 48% using AI, while small businesses lag at 4%. The workplace is changing rapidly; 89% of HR departments have restructured or plan to within two years. The core team is evolving, with 48% of FTSE 100 companies hiring a Chief AI Officer. HR tech spending is increasing, with 55% boosting investments, and the AI HR tech market is expected to triple by 2030.

1. The shift from roles to skills-based hiring

Skills-based hiring will be a key HR trend by 2026. The numbers tell the story - 9 out of 10 recruiting teams now look at what candidates can do rather than their credentials. This change isn't just a passing fad. Companies need it - 87% of them either face skill gaps now or expect them within five years.

Why skills matter more than titles

A person's true potential doesn't show up in the usual resume format with its list of job titles and dates. Smart companies now know that real value comes from what employees can do, not just the roles they've held. This way of thinking helps solve real business problems. Companies focus on career growth and finding talent as their main reasons for looking at skills.

Looking at skills instead of degrees works better. Companies that do this are 57% more likely to adapt quick to market changes. These hires also stay 9% longer because they're happier and more involved in their work.

The data backs up skills-first hiring:

• 90% of companies make better hires by focusing on skills rather than degrees

• 94% say skills-based hires do better work than those picked for traditional credentials

• 86% of business leaders would hire someone based on their skills alone

This change is happening now as about 55% of organizations worldwide move toward skills-based strategies. By 2026, only 42.1% of employers will consider GPAs, down from 73.3% in 2019. Now, college majors, experience, internships, and proven abilities matter more. Skills-first hiring benefits both businesses and workers: companies dropping degree requirements access more potential employees.

LinkedIn reports a 21% increase in skill-focused job ads and 40% more jobs without college degree requirements, making talent pools nearly ten times larger globally.

How internal mobility is being redefined

Skills have shifted talent movement within companies. Last year, 39% of roles went to internal candidates, up from 32%. Many talent leaders want to increase this in 2025. Companies now view talent mobility differently. Leaders in skills-based firms don't always post new jobs for specific skills. They search their workforce, find skilled people across departments, and form project teams.

This flexibility allows quick responses to change, opportunities, and challenges. The old career ladder is outdated. Now, there's a "career lattice":people can move sideways, diagonally, or up based on skills, not just seniority. Careers resemble networks more than ladders. Employees discover new opportunities, and companies find hidden talent.

Examples of skills-first organizations

Big companies show skills-first approaches work. IBM leads with a clear plan for needed skills, including performance reviews and rewarding development. Boeing addressed cybersecurity hiring issues with an apprenticeship that doesn't require college; mentors verify over 100 skills learned on the job.

HR trends for 2026 suggest skills-based hiring will grow as it boosts business success: companies using this method are 63% more likely to reach their goals. As technology evolves, what someone can do is more important than where they studied.

2. AI is reshaping HR operations

AI has grown beyond experiments in HR and become a key operational component as we approach 2026. Organizations are investing heavily in AI and generative AI, with 70% of these investments going to HR departments. This makes HR the leading use case across industries. The change shows how HR teams are moving away from administrative tasks to create strategic value.

Agentic AI vs. generative AI

HR leaders need to understand AI types for technology planning. Generative AI acts as a reactive assistant, creating content from prompts, and is widely adopted: over 70% of businesses use it, reducing HR administrative tasks by 15-20%. In contrast, agentic AI is more autonomous, recognizing signals like engagement drops or performance issues to suggest and take actions independently.

It combines language models and traditional programming to make decisions, adapt to situations, manage processes, and automate workflows. Adoption is projected to grow 327% by 2027, with nearly 25% of roles shifting to strategic, people-focused work. Large organizations (48%) currently use agentic AI more than small ones (4%).

AI in recruitment, onboarding, and learning

AI transforms the employee lifecycle, enhancing HR functions with efficiency and customization. AI-driven recruitment cuts time-to-hire by up to 75%, screens resumes, finds top candidates, and reduces bias, fostering diversity. Onboarding, once burdened with checklists, is now personalized through AI, boosting retention by 82% and increasing productivity by 70%.

AI revolutionizes learning by enabling personalized training based on individual data, aligning skills with roles and goals. With AI's rise, 83 million jobs may be disrupted globally, but 69 million new roles will emerge by 2025, as 80% of business leaders anticipate changes in employee skills. AI integrates learning into daily tasks, closing skills gaps and eliminating traditional training needs.

Challenges in AI adoption and ROI

Despite benefits, organizations face hurdles using AI in HR. Bias is the main issue, as biased data, such as in hiring or pay, causes AI to replicate unfair patterns. For example, a tech company’s AI favored male candidates because it learned from past decisions that preferred men. This contributes to 71% of HR leaders wanting to use generative AI to reduce bias.

Data quality is another challenge; AI requires clean, detailed datasets, but many organizations have scattered, inconsistent HR data. Without fixing this, AI projects lack value. Measuring AI's ROI in HR is difficult—HR leaders report a median ROI of 15%, with wide variation from 5% in low-performing firms to 55% or more in top organizations.

Regular ROI calculations (net benefits divided by investment cost) don't work well because:

• HR-specific AI adoption is still new

• Benefits often come indirectly and are hard to calculate

• AI needs big upfront costs while benefits come later

Leading organizations track specific metrics instead of overall ROI:

• Speed/cycle time improvements

• Customer satisfaction increases

• Accuracy enhancements

• Time saved through automation

• Query deflection rates (questions answered fully by AI)

• Direct cost savings

HR teams' skill gaps hinder AI adoption, as many can't interpret insights or fix tech issues. Resistance to change, fearing job loss, worsens this. AI shifts HR from admin to strategic tasks. Organizations that adapt early will gain in workforce management by 2026.

3. Workplace models are evolving again

Workplace flexibility stands as a defining HR trend that 2026 will shape further. Organizations now move away from quick fixes toward strategic long-term models. The global workforce shows 47% of employees work in some form of hybrid arrangement, which marks a big change in our understanding of "the workplace".

Hybrid, remote, and return-to-office trends

Organizations are adjusting their work location policies as the workplace pendulum swings. Currently, 72% have some office mandate, either requesting specific days (37%) or a set number of days per week (35%). The hybrid workforce has decreased from 63% to 47%. Over the past two years, 38% of employees experienced return-to-office policies, but only 34% support them. Support varies across hierarchy: 61% of C-suite executives favor RTO, while support among entry-level staff drops to 30%, and associates to 19%.

Regional differences show clear patterns in workplace expectations:

• Asian employees average 4.4 days per week in office

• European employees spend about 2.5 days on-site

• North American workers average just over 2 days in-office weekly

High-performers favor fully flexible work models, with 44% preferring working from home over 44% for office work. Organizations may need different strategies for various talent groups. Productivity data show that fully flexible setups yield 28% gains, slightly more than five-day office policies at 26%. This suggests both highly structured and flexible models can succeed if well-implemented.

Different age groups and backgrounds see varied productivity impacts, with remote work peaking at 41% for some. Employees aged 35-55, higher earners, and Asian Americans excel in hybrid models; no single approach suits all long-term.

Financially, remote work can save about $11,000 annually per employee, but forced return-to-office policies risk higher turnover (42%) and recruitment difficulties (29%).

Designing work for flexibility and productivity

Office spaces for 2026 are shifting from capacity to connection, focusing on creating versatile environments for employee choice. Success is measured by user satisfaction, amenities, and well-being rather than occupancy. Smart organizations know convenience isn't always key to productivity; employees prefer supportive spaces nearby, offering diverse options instead of just maximizing desk space.

Offices now serve global teams, operating beyond local hours, with dedicated areas for tasks: quiet zones, collaborative spaces with movable furniture, and advanced tech like video conferencing and Wi-Fi. Emphasizing employee well-being, they feature ergonomic furniture, natural light, and green spaces, boosting satisfaction and productivity.

4. HR and IT are becoming strategic partners

The line between HR and IT departments is fading as we approach 2026. This represents one of the most important yet overlooked HR trends. A recent study shows 64% of senior IT decision-makers believe their HR and IT functions will completely merge within five years. This marks a basic change in organizational structure that's already changing how companies work.

Why HR needs tech fluency

Technology is essential for HR, driven by the rising need for skills in data and AI. Beyond using new tools, HR professionals require digital expertise, now a core competency alongside data literacy, business acumen, and people advocacy. HR and IT must collaborate: HR provides insights on tool adoption, while IT manages technology. Data shows 56% of companies are revamping HR programs with digital tools, and 33% incorporate AI, profoundly changing HR expectations succeed:

• Continuously optimizing HR service delivery: Digital-savvy HR teams can automate routine tasks like interview scheduling and PTO approvals

• Improving organizational effectiveness: Better digital efficiency in HR helps entire operations

• Implementing new technology: HR professionals must lead the creation of digital-first cultures

Many HR departments have reached a vital turning point. Large companies now manage over 80 HR platforms in their tech stack. This creates new levels of complexity. Yet only 35% of HR leaders believe their current HR technology approach will help achieve business goals. This gap between technology growth and strategic planning shows why HR-IT partnerships are essential.

Joint governance and platform integration

The HR and IT merger creates strategic advantages beyond just restructuring. Companies that invest in HR-IT collaboration see impressive results - 93% of IT leaders report increased productivity, better employee satisfaction, and higher engagement.

Working together creates important technical benefits:

Data security and privacy: Centralized employee data gives HR teams full overview while IT maintains proper access controls

Operational efficiency: Core processes like onboarding and offboarding become automated, which reduces manual work and security risks

Enhanced user experience: Better system integration means fewer logins and easier process management

Business-wide dataflow: Good partnerships improve data flow across organizations

Poor alignment leads to wasted resources through troubleshooting, duplicate systems, or overreliance on vendors. Like other technology projects, AI needs both technical expertise and human understanding to work well.

The most successful organizations use practical methods to encourage HR-IT collaboration:

1. Breaking down silos through structured communication
2. Developing shared language between departments
3. Scheduling regular check-ins between HR and IT leaders
4. Defining mutual goals beyond cost savings
5. Involving IT early in HR technology decisions

5. Ethical governance and compliance are top priorities

Regulatory compliance stands out among HR trends for 2026 as state legislatures react to AI's expanding role in employment decisions. AI has become a game-changer in recruitment - 99% of Fortune 500 companies use it to screen resumes while 55% of HR leaders rely on algorithms to make hiring decisions. Organizations must now direct their way through an increasingly complex legal landscape.

New AI regulations in employment

The start of 2026 brings a complex web of state-level laws that govern artificial intelligence in hiring and workplace decisions. Several major regulations become effective January 1, 2026, creating significant hurdles for HR departments:

• Illinois House Bill 3773 amends the Human Rights Act to explicitly apply anti-discrimination standards to AI used in employment decisions

• Texas Responsible Artificial Intelligence Governance Act sets new requirements around transparency and risk assessment

Colorado Artificial Intelligence Act takes effect June 30, 2026, requiring risk management programs for high-risk AI systems

California's amendments to the Fair Employment and Housing Act, in effect since October 2025, spell out how existing civil rights protections apply to automated hiring tools. This state-by-state approach creates substantial variation in compliance requirements. Many employers now assess whether a single national approach works or if they need more tailored strategies.

Ensuring fairness and transparency in AI decisions

Transparency is crucial in AI hiring. Currently, 30% of tech workers consider leaving due to frustrations, fearing AI prioritizes keywords over qualifications. Clear AI policies are needed. AI algorithms face technical and ethical issues, potentially reinforcing biases from past data. A three-year study by a global consumer goods firm showed that such systems can entrench rigid fairness definitions.

Best practices to ensure fairness include:

• Regular data audits to spot and remove bias in training datasets

• Diverse development teams to bring different viewpoints to AI system design

• Explainable AI that shows clear decision-making processes

• Clear protocols for situations where AI spots potential bias

Many jurisdictions now require transparency in AI use. To name just one example, see Illinois, where employers must clearly notify candidates when AI plays a role in hiring or employment decisions. New York City's Local Law 144 requires yearly bias audits by independent auditors and public disclosure of audit summaries.

Building trust through human oversight

Human oversight is vital for ethical AI in HR. A 2022 Glassdoor survey shows 58% of job seekers worry about bias in AI-driven hiring tools. Human review builds trust. Organizations should keep a "human-in-the-loop" approach—AI suggests, humans decide. Accountability is essential; someone must take responsibility if AI errs, including vendors. Employers should review AI provider contracts for protections. Trust requires a structured approach.

Charlene Li of Quantum Networks Group describes the "Pyramid of Trust': safety, security, and privacy form the base, with fairness, quality, accountability, and transparency on top. This helps organizations leverage AI, often a "black box," making important decisions. Success involves continuous monitoring and clear communication. Regular audits spot bias and ensure compliance. Organizations should foster an environment where employees feel safe raising concerns about AI.

Conclusion

The HR landscape is changing as we approach 2026, with five key trends reshaping talent management. Skills-based hiring replaces traditional credentials, with 90% of recruiters prioritizing capabilities over degrees, leading to better hires, longer retention, and larger talent pools. AI has become vital in HR, with agentic AI offering strategic autonomy in recruitment, onboarding, and learning. Workplace flexibility grows, with companies balancing remote, hybrid, and in-office setups; successful organizations create meaningful in-office experiences.