Key workforce trends to watch in 2026

As 2026 begins, the workplace is rapidly changing due to technological advances, shifting labor dynamics, and evolving employee expectations. Organizations that anticipate and adjust to these changes are more likely to attract top talent, boost productivity, and stay competitive. From embracing artificial intelligence in the workplace to a continued focus on skill-based hiring, the future of work is being shaped by trends that could redefine how we collaborate, learn, and thrive. Here are three top workforce trends to watch in 2026.

1. THE AI-AUGMENTED WORKFORCE

The adoption of AI is quickly becoming a critical factor in modernizing the workplace. Companies and employees alike are recognizing AI’s value and are actively weaving it into their daily operations and workflows. Rather than replacing jobs and skills outright, AI is reshaping roles and creating new opportunities to boost efficiency and improve work quality.

McKinsey Global Institute reports that AI-driven automation has the potential to generate $2.9 trillion in economic value across the U.S. by 2030. Their research suggests that unlocking this potential value will require more than just automating individual tasks. It involves rethinking entire workflows to enable effective collaboration among workers and AI assistants.

By automating routine, repetitive tasks like document preparation and basic research, AI allows employees to focus on more complex tasks and contribute in more strategic, impactful ways. A March survey we conducted with 1,000 HR professionals showed that nearly 70% view AI positively and find it helpful for their work. This benefit is particularly evident when automating initial, high-volume administrative tasks in the recruitment process.

The survey suggests that AI adoption is highest during the early stages of the hiring process, especially in job posting (39.7%) and résumé screening (39.5%), with larger companies more likely to use these tools due to a higher volume of applications. Usage drops for more subjective tasks like hiring decision (14%) and shortlisting (13%), showing a continued preference to leave key judgments and final decisions to humans.

2. SKILLS-FIRST HIRING AND UPSKILLING

With many industries continuing to struggle with labor shortages, more employers are reevaluating their hiring practices. To fill this gap, many companies are moving toward skills-based hiring. The transition to skills-based and skills-first hiring is more than just a passing trend; it’s a strategic response to evolving labor market dynamics.

A National Association of Colleges and Employers (NACE) found that 65% of employers surveyed reported adopting skills-based hiring practices for entry-level hires. Additionally, 90% of employers who use skills-based hiring report applying it during the interview stage, while almost three-quarters include it in the initial filtering process.

This emphasis on a candidate’s skills highlights a common misunderstanding between skills-based and skills-first hiring methods. Skills-first hiring primarily evaluates candidates based on skills, though other factors might still influence the decision. In skills-based hiring, a person’s abilities are important but not necessarily more important than other factors like education or experience.

By embracing continuous learning, individuals can effectively bridge existing skill gaps and proactively position themselves for the jobs of tomorrow. Our March survey of 1,000 unemployed individuals found that among respondents actively seeking jobs, 59.3% of those who considered upskilling reported receiving a job interview compared to 48.7% who did not, a 21.8% difference.

Upskilling not only boosts their short-term marketability but also strengthens long-term resilience in a constantly changing workforce, ultimately leading to a more confident and successful return to employment.

3. A STAGNANT LABOR MARKET FOR NEW GRADUATES

The U.S. labor market is currently experiencing a stagnant phase, often described by economists as “low-fire, low-hire.” This means companies are not laying off employees, but they are also not hiring new staff quickly. While this stability benefits current workers, it creates a significant obstacle for the newest generation of workers, especially recent graduates. This is particularly true for those not pursuing in-demand fields, such as the healthcare industry.

NACE’s 2026 job outlook reports that 45% of employers view the overall job market for 2026 class of graduates as “fair.” The last time the majority of employers (52%) described the job market this way was in 2021, when hiring expectations were similarly stagnant. This signals a return to when the market was still recovering from the pandemic, and companies were more cautious and hiring out of necessity.

Despite this bleak outlook for young job seekers, students are still optimistic. ZipRecruiter research shows that students overwhelmingly expect a quick transition from campus to career, with 82% expecting to land their first professional job within three months of graduating. While 77% do manage to find employment quickly, 5% are still searching for their first job.

While the present job market offers stability for current employees, it creates challenges for new graduates trying to succeed. Moving from college to a professional career is now more like a marathon than a sprint, requiring young job seekers to focus on building skills in high-demand fields and refining their job search tactics to navigate an increasingly selective employment environment.

FINAL THOUGHTS

The 2026 workplace will be influenced by emerging technologies, changing expectations, and evolving hiring practices. Although economic uncertainties and slower recruitment may pose challenges, they highlight the importance of innovation and adaptability in business strategies. Organizations that invest early in AI and focus on skill-based hiring are better positioned to attract and retain top talent, foster innovation, and boost productivity and growth. Recognizing these trends is essential for successfully navigating the rapidly changing labor market and maintaining competitiveness.

Paul Toomey is president and founder of Geographic Solutions.