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Talent
Workplace trends for 2026: preparing for the new labor market reality
Key predictions and strategic guidance for leaders balancing technological disruption with the need to attract, retain, and reskill talent in 2026.
Multiple pressure points on organizations in 2025 pushed them to firm up their approach to work, talent, and technology. As we move into 2026, five key trends will reshape the workplace landscape, demanding proactive, strategic responses from business leaders who must balance technological disruption with the need to continue to attract and retain talent.
Flexibility: more demand, higher costs
The appetite for flexible work arrangements continues to intensify, yet regulatory environments are making flexibility structurally more expensive. This creates a fundamental contradiction: workers increasingly seek varied contractual formats – from platform work and even remote cross-border contracting, to employer-of-record arrangements – while policymakers struggle to secure tax revenues and social security payments through a model based on traditional open-ended employment contracts.
This tension stems from what might be called the “budget dilemma.” Governments facing significant fiscal challenges are attempting to perpetuate employment models that maximize tax collection, even as both workers and companies actively seek flexibility in how work gets done. The result is a flourishing of alternative contractual arrangements, creating an uneven playing field where agency work remains the most secure flexible option, yet competes with less regulated alternatives.
The shift toward portfolio careers is also accelerating, but no longer confined to senior professionals approaching, or even post-retirement. Younger workers are increasingly embracing multiple income streams and project-based engagement throughout their careers. The idea of a person following one career path in their lifetime has gone for good, a sentiment acknowledged by 82% of senior executives, according to the Gi Group Holding survey The Work Life We Want. Jobs have become transient, and employees continuously seek situations that work better for them. The question for managers is not whether this trend exists, but whether their organizations have systems in place that reflect this new reality.
“For us to let flowers live, we must exist with them, without having a pre-set vision of what we want to create.”
Inclusion resurgence: from pariah to priority
The inclusion agenda experienced turbulence in 2025, particularly as diversity, equity, and inclusion initiatives faced backlash driven primarily from the United States. Many companies immediately scaled back DEI programs – or stopped promoting them – in response to political pressure. However, 2026 will see inclusion reclaim its rightful status as organizations recognize that diverse and inclusive teams remain fundamental to economic performance and productivity.
The business case for inclusion has never been stronger. As noted in my Forbes article, organizations with robust diversity, equity, and inclusion practices are 2.7 times more likely to report high success rates when competing for new business opportunities and 2.4 times more likely to cite employee satisfaction as a competitive advantage. These, and similar findings on DEI – as previously reported on I by IMD – make clear that inclusion is not a discretionary initiative but an economic imperative.
The realization that inclusive and diverse teams drive superior business outcomes will prevail over short-term political pressures. In particular, companies that manage to create truly age-diverse workplaces – spanning up to six generations from the Silent Generation to the incoming Generation Alpha – will find that doing so benefits both business performance and employee retention.
The agentic AI tsunami: job displacement begins
While large language models have helped workers enhance productivity, 2026 marks the year when agentic AI begins displacing jobs, rather than merely augmenting them. This will represent the first opportunity to measure AI’s actual impact on the labor market.
The displacement will be nuanced rather than uniform. White-collar roles at junior to mid-levels face the greatest immediate risk, while skilled trades – plumbers, electricians, farmers, cement masons – remain largely insulated from AI disruption. Nvidia CEO Jensen Huang’s recent observation that “the next millionaires will be plumbers and electricians rather than techies” reflects this emerging reality. Blue-collar segments show potential for growth precisely as white-collar positions face technological pressure and displacement.
However, adoption patterns will vary dramatically. While multinational corporations and large consultancies deploy agentic systems aggressively, small and medium enterprises (SMEs) – which constitute more than 90% of most economies – lag significantly in adoption. This creates a bifurcated labor market with AI’s impact concentrated in specific industries and company sizes rather than spreading uniformly across the economy.
The productivity question remains contentious. One observer aptly compared current AI capabilities to an intern: useful for specific tasks under oversight, but requiring judgment, correction, and guidance. The 95% of corporate AI investments that have not delivered expected returns underscore this reality. For AI to move beyond intern-level maturity requires both technological advancement and careful consideration of the ethical implications.
Workers perceive significant time savings from AI but lack guidance on how to channel that recovered time into activities that create measurable business value.
The AI training crisis: bridging strategy and execution
The most critical challenge facing organizations in 2026 is not whether to adopt AI, but how to prepare their workforce to use it effectively. This represents a fundamental failure of organizational strategy execution: workers are excited about AI and report saving an average of two hours per day using these tools, yet only 25% receive formal AI training from their employers, according to The Adecco Group Global Workforce of the Future 2025 report.
This disconnect creates a dangerous vacuum.
Workers perceive significant time savings from AI but lack guidance on how to channel that recovered time into activities that create measurable business value. Without clear direction, this productivity potential dissipates rather than translating into competitive advantage. Leaders must define expectations and set parameters for how freed-up time should be deployed, ensuring it flows into tasks that benefit both employee development and organizational performance.
The broader skills crisis compounds this immediate AI literacy gap. The fundamental misalignment between business needs and worker competencies has persisted for fifty years; agentic AI simply adds urgency to an already acute problem. The central challenge remains financing. While everyone acknowledges the reskilling imperative, nobody funds it adequately. Governments lack resources, companies resist investment, and individuals cannot bear the costs alone. Yet, if even a fraction of the trillions flowing into AI development were redirected toward human capital development, the productivity gains would likely exceed current AI returns.
In addition, leaders continue to misunderstand both AI’s capabilities and their impact on their organizations. More critically, they fail to articulate how AI supports organizational strategic priorities, leaving employees to interpret its role independently. This creates a situation where AI adoption feels like a top-down mandate rather than a tool for achieving shared success. Workers need transparent guidance on how AI will affect their specific roles and career paths, yet organizations systematically fail to provide this clarity.
The retention implications are substantial. Almost all workers – 99% – who feel a strong sense of purpose intend to stay with their employer for the next year. Leaders must show employees how their work contributes to organizational goals even as AI changes their daily tasks. For example, if AI now handles routine customer inquiries, explain how this frees the employee to focus on solving complex problems that directly improve customer retention – a measurable contribution to company success. Conversely, the absence of such guidance creates uncertainty and disengagement. Workers are motivated to upskill, but without targeted skills planning and clear career development pathways that account for AI impact, this motivation finds no productive outlet.
The talent mobility crisis: borders close as needs grow
Perhaps the most overlooked threat to workplace stability in 2026 is the deterioration of systems that promote international talent mobility. Policymakers have turned a blind eye to establishing well-regulated talent corridors, while some major economies like the UK and the US are actually closing borders or making skilled legal migration more difficult. This ‘double whammy’ fails to fix the “uncontrolled migration problem” as perceived by the public, but does deprive companies of access to critical talent in tight labor markets.
With demographic drift reducing the home-grown workforce populations in developed economies, and skills mismatches persisting across industries, access to international talent becomes increasingly critical.
Leaders must articulate exactly how AI supports their organization’s strategic priorities and provide comprehensive training rather than treating AI literacy as individual responsibility.
Strategic guidance for leaders
Addressing 2026 workplace trends requires leaders to consider taking four key actions.
Build structural flexibility into talent strategies. Rather than resisting the shift toward varied contractual arrangements, create ‘mass customization’ systems that accommodate portfolio careers, project-based work, and flexible engagement models, while ensuring adequate worker protections and organizational stability. Recognize that flexibility has become a table stake for all generations.
Recommit to inclusion as economic strategy. In particular, age-diverse teams spanning multiple generations bring resilience, adaptability, broader skill sets, and enhanced innovation capacity. Focus on creating “ageless teams” through targeted support for each generational cohort: apprenticeships and entry programs for younger workers, work-life balance support for mid-career professionals, and redesigned career paths with cultural belonging for senior employees.
Take ownership of workforce AI education. Leaders must articulate exactly how AI supports their organization’s strategic priorities and provide comprehensive training rather than treating AI literacy as individual responsibility. Define clear expectations for how time saved by the use of AI should be deployed, provide transparent guidance on how AI will affect specific roles and career paths, and offer targeted skills planning and development that connects employees’ evolving roles to the company mission. The ROI on an investment in human talent development will exceed most AI technology investments.
Advocate for policy frameworks that enable international talent mobility. Systemic challenges cannot be solved by individual companies, but business leaders can shape policy conversations and push for coherent solutions. The alternative – constriction in the international talent pipeline – will ultimately undermine all other human capital development strategies.
The workplace of 2026 will be characterized by fundamental tensions: flexibility versus regulatory costs, AI displacement versus human irreplaceability, skills gaps versus investment shortfalls, and global talent needs versus closed borders. Leaders who manage these contradictions proactively will build organizations resilient enough to thrive despite volatility. Those who ignore these trends risk having to fight a rearguard action in the battle to attract and retain talent at all levels of their business – and that represents an existential threat.
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