As we look ahead to 2026, leaders around the world are navigating a workplace shaped by profound geopolitical and economic volatility, demographic change, accelerating technology, and new expectations about how and where work happens.
AI has moved from experimental to essential. Talent scarcity remains the defining feature of global labor markets, and organizations are rethinking how they attract, develop, and retain the people who keep them competitive.
The year ahead will reward leaders who act with clarity and purpose - those who pair technology with humanity, create equitable pathways into work, and adapt their talent strategies to where skills truly are.
These are the five developments I believe will shape the workplace in 2026.
Like every technological leap before it, fears that 2026 will be the year of mass unemployment thanks to AI will prove to be untrue. While the technical potential of AI automation is undeniable - with research suggesting over half of current work hours could technically be automated - the operational reality is different. Moreover, a fundamental economic counterweight is at play: demographic necessity. With workforce cohorts shrinking in developed economies, AI is emerging not as a rival to labor, but as the essential productivity lever to plug the gap.
The narrative for 2026 should therefore not be about job displacement but job reconfiguration. We already see redundant tasks being stripped away, and that leaves the human intervention in the non-automatable tasks even more important. The risk for businesses this year is not a surplus of labor, but a failure to augment the workforce they have fast enough to maintain growth.
Recommendation: Leaders should pivot their AI strategies from cost reduction to productivity creation. Instead of waiting for AI to replace roles, focus on deploying it to automate the low-value tasks that most often contribute to inefficiency and job dissatisfaction. In a labor-constrained world, the goal is to use AI to extend the impact of your team, not to remove them.
The capabilities that make people effective are uniquely human: they can’t be automated or replicated by AI, and demand for inherent human strengths continues to rise. Leadership skills is now the #1 most sought-after inherent capability, while problem-solving and critical thinking are also climbing, accordinto our In-Demand Skills research.
At the same time, resilience and creativity have some of the highest hiring difficulties among human skills, with vacancy ratios of 12% and 8.7%, reflecting a growing mismatch between what organizations require and what talent say they have.
At the same time, the premium in the labor market is shifting from AI builders to AI-empowered professionals - people who can apply AI effectively in their own disciplines. Compensation for AI-related roles continues to rise, with increases of around 10% in EMEA and 2.5% in the US. Employers increasingly value hybrid profiles: finance experts who use AI for risk modelling, marketers who leverage generative tools, and operations leaders who automate workflows.
Recommendation: As work environments evolve rapidly and AI-powered tools reshape how tasks get done, leaders must invest in both sides of the capability equation. That means giving all talent the confidence and opportunity to use AI at scale, while also prioritizing the human strengths that matter most in a changing workplace to ensure growth alongside technology.
Across industries, talent patterns are shifting. In fast-growing fields like AI and data, opportunities for early-career talent are narrowing rapidly. In 2023, about 26% of automation roles were open to junior candidates. Today that share has fallen to under 17%, meaning fewer young workers are entering the fields where demand is growing fastest. At the same time, young talent is not staying long enough to develop. Gen Z’s median tenure in their first five years of career is just 1.1 years - four times lower than Baby Boomers.
Millennials now make up nearly 60% of the global workforce, while Gen Z accounts for about 20%, a ratio that reflects their stage of life. But the concern is not the cohort size, but the narrowing entry pathways and the accelerating churn. With fewer early-career roles and shorter tenure, fewer young workers are progressing into the areas where demand is rising fastest. Some sectors are feeling this most acutely: Banking, Financial Services & Insurance has one of the lowest young-talent retention rates at just 22.5%, while Life Sciences sits even lower at under 9%, underscoring how rapidly early-career workers are moving out of these industries.
With fewer early-career hires progressing and tenure shortening, organizations are leaning more heavily on experienced talent. But with demand for seasoned specialists rising across industries, this dependence is creating capability gaps that will widen unless early-career pathways are rebuilt.
Recommendation: Leaders must rebuild pathways from both ends: reopening entry-level opportunities, redesigning early-career work, accelerating internal development to grow the next generation of experienced talent, whilst also leveraging and retaining older talent.
Every organization is looking to scale AI, but the limiting factor is no longer technology: it’s people. Senior technical roles now carry the highest hiring complexity, reflecting the level of experience required to lead transformation. While junior hiring is becoming easier in many markets, demand for senior specialists continues to rise, widening the gap between what organizations need and what the current talent pipeline can supply.
The global talent landscape has shifted. Year after year, more people are becoming open to new opportunities and re-evaluating their careers. For highly demanded skill sets, mobility is particularly pronounced. Across many markets, the number of people actively looking for jobs grew by around 16%, and tech talent, including those in traditionally non-tech roles who have acquired AI skills, are acting on those new opportunities more frequently.
Mobility, however, varies sharply by market. In Europe, around 16% of experienced talent change jobs each year, rising to 20% among workers with AI skills. In Italy, the dynamic is more muted: roughly 13% of experienced talent and only 8% of AI-skilled talent decide to move. And while countries like the Netherlands show some of the highest overall job-change dynamics in our research, mobility for AI-skilled specialists remains far more limited - particularly in deeply scarce markets such as Germany.
Recommendation: In 2026, businesses will invest as much in building resilient, future-ready tech teams as they do in technology itself - through upskilling, cross-functional mobility, and strategic workforce planning.
Even as AI reshapes knowledge work, the global economy continues to rely on people who build, move, and serve. Yet many essential roles are facing severe and persistent shortages. Retail and direct-sales roles show some of the highest vacancy ratios - 29% in France, about 20% in Brazil, and 19% in Spain - reflecting tight labour markets, high churn, and the ease with which people move between adjacent roles such as delivery, warehousing, and retail.
Manufacturing shortages are also intensifying in many mature markets. The Netherlands, for example, shows a 12% vacancy ratio compared with a global average of 2.9%. But this picture is far from uniform. In countries like India, vacancy ratios in manufacturing sit below 1%, highlighting significant labor availability and signalling how global production capacity may continue to shift toward markets with deeper talent reserves.
Automation will boost productivity, but it will not replace the human qualities that make frontline and skilled-trade work so essential: judgment, dexterity, problem-solving, and the interpersonal connection that defines many of these roles. These jobs create value precisely because of the human element. Yet demographic pressures mean demand is rising faster than the available workforce. With the share of older workers growing and retirements accelerating, many economies are losing experienced specialists faster than the junior talent pool can replace them. Technology, including AI, will be critical in supporting frontline workers to do more with less, helping businesses meet demand despite shrinking labor pools.
Recommendation: Forward-thinking employers will invest in frontline and skilled-trade work, improving progression, safety, training access, and work quality - and pairing this with technology that helps workers deliver more impact. In a world where experienced talent is retiring faster than new workers enter, supporting blue-collar talent with modern tools and AI-enabled productivity will be essential to sustaining growth.
2026 will be a pivotal year for organizations. The leaders who succeed will be those who pair technology with humanity, build inclusive and resilient talent pathways, and adapt their strategies to the realities of scarcity and opportunity.
The future of work is indeed about AI and efficiency, but more than that, it is about people - and the leaders committed to helping them grow and thrive.
