AI, skills shifts, new laws: What will hit HR hardest in 2026

The coming year will mark a decisive turning point for HR. As artificial intelligence reshapes the foundations of work, organisations are being pushed to adopt technologies that can accelerate productivity without eroding trust, fairness or human oversight. ADP’s latest global trends report argues that HR leaders in 2026 will be defined by their ability to integrate technological intelligence with humanity — and to do so at speed.

The report highlights six major forces that will shape the year ahead, offering a preview of how HR functions across industries are now planning for a future where compliance, people strategy and technological evolution converge more tightly than ever.

1. Agentic AI Moves From Hype to Core HR Capability

While generative AI dominated conversations in 2024 and 2025, agentic AI is emerging as a more consequential technology. According to the ADP report, agentic AI can autonomously think, plan and carry out multistep tasks, making it far more capable of executing complex HR workflows than earlier automation tools.

“Agentic AI unlocks new frontiers of automation,” said Amin Venjara, chief data officer at ADP, noting that the technology can coordinate variable conditions and deliver resilient automation when paired with human oversight.

Adoption levels, however, vary widely. ADP’s 2025 survey found that 48% of large companies are using agentic AI, compared to just 4% of small firms. Even so, familiarity among smaller organisations is rising, suggesting that wider uptake may follow in 2026.

For HR and IT alike, this shift brings new digital responsibilities. ADP reported that 79% of IT leaders now believe AI agents introduce fresh security risks, while nearly half say their data foundations are not yet robust enough to support agentic deployment.

2. HR and IT Move Toward Full Interdependence

One of the report’s strongest findings is the deepening convergence of HR and IT. ADP found that 64% of IT leaders expect both functions to merge or operate under shared governance within the next five years.

As organisations adopt more sophisticated AI systems, HR success depends heavily on IT’s capability to vet, implement and maintain complex technologies. At the same time, IT relies on HR to manage adoption, behavioural change and the human impact of digital tools.

The result is a new operating model: HR and IT must set unified goals, share data infrastructure and collaborate on governance to ensure that emerging technologies enhance — rather than undermine — workforce outcomes.

3. Skills-Based Organisations Become the Dominant Model

Organisations are rethinking how work is defined and performed. Traditional job descriptions are giving way to skill inventories, capability maps and role adjacencies.

AI’s ability to optimise tasks is accelerating this shift. As automation absorbs routine work, leaders can more precisely match people to tasks based on individual strengths and emerging skill requirements.

“Small and midsized organisations should also consider strategic workforce planning at a scale that’s realistic for them,” said Asal Naraghi, ADP’s global innovation leader for the future of work. The report notes that while larger companies lead in skills-based talent strategies, smaller firms are beginning to follow.

4. Policy Shifts Redefine How Employers Manage Benefits

Much of the regulatory movement highlighted in the ADP report reflects US legislative action — including new tax treatments for paid leave, childcare benefits and overtime compensation. While these developments are specific to the United States, they signal a broader global shift: governments are reassessing how work is compensated and how benefits are structured in response to changing workplace expectations.

Paid leave mandates are expanding internationally, and employers everywhere face rising pressure to modernise benefits, track compliance more rigorously and prepare for more frequent shifts in employment law.

5. Governments Begin Regulating AI in Employment Decisions

The ADP report warns that regulatory complexity will increase in 2026. Countries are taking starkly different approaches to controlling AI in the workplace, creating challenges for multinational employers.

Several major frameworks now govern AI-led employment decisions, including the European Union’s AI Act, Colorado’s forthcoming AI law and new rules in California. These regulations require employers to demonstrate transparency, minimise bias and keep humans involved in decisions affecting people’s livelihoods.

“Having humans involved in employment decisions is essential,” said Helena Almeida, ADP’s vice president and managing counsel for AI. She stressed that oversight must remain central even as technology becomes more capable.

For global employers, this means building stronger audit trails, increasing explainability in AI tools and tightening governance protocols.

In India, regulatory movement around AI in employment is gathering pace, though it is not yet as codified as in Western markets. The government has begun shaping early contours of AI oversight through policy discussions led by the Ministry of Electronics and Information Technology, while the Digital Personal Data Protection Act has already imposed stricter obligations on how employers handle, process and store employee data. 

Industry bodies such as NASSCOM have also urged companies to embed “human-in-the-loop” systems for high-stakes decisions and to document transparency mechanisms for AI-led screening, assessments and promotions. India is likely to introduce sector-specific guidelines before it adopts comprehensive AI legislation, meaning HR leaders will need to prepare for gradual but continuous regulatory tightening rather than a single sweeping reform.

6. AI Delivers Mixed Experiences for Workers

Despite rapid adoption, the workplace experience of AI remains uneven. Some employees view AI as a productivity enhancer; others see it as a source of pressure or uncertainty. ADP emphasises that employers must frame AI as a tool for augmentation rather than replacement.

Jason Delserro, division vice president of HR at ADP, said organisations should avoid unrealistic expectations. “Expecting immediate, massive productivity gains risks creating unrealistic pressures on both the technology and, more importantly, your people,” he noted.

The report suggests that employers need clearer communication strategies, stronger change-management practices and better support systems to guide employees through continual digital transformation.

The Road to 2026: Innovation With Caution, Technology With Humanity

ADP’s trends report underlines a central tension: innovation must not outpace humanity. Organisations that adopt AI without robust governance, transparent communication or human oversight risk losing trust at a moment when employee expectations are rapidly evolving.

The winners of 2026 will be employers that can innovate decisively while maintaining fairness, safeguarding privacy and embedding empathy into the design of work. Those that meet this balance, ADP suggests, will build workplaces resilient enough to capture competitive advantage throughout the year — and beyond.