SHRM identified seven HR trends that we expected would shape workplaces this year. Now that we’re halfway through 2026, how true were these predictions? Here’s how these seven trends are playing out.
SHRM Said: ‘I&D Is About Performance, Not Causes’
We predicted that HR leaders would have to focus on how to position inclusion and diversity (I&D) as a business advantage, noting that having a diverse workforce is critical for an organization’s bottom-line. I&D work remains vitally important, but organizations are shifting to a performance-based approach. It’s about focusing on financial performance — the impact of I&D — not about taking up the cause of addressing systemic issues.
“To create workplaces that are truly inclusive and diverse, employers must understand not just the boundaries of Title VII, but how the legislative, executive, and judicial branches shape its impact. Clear comprehension drives compliance — and innovation,” said Emily M. Dickens, chief administrative officer at SHRM, in January 2026.
6 Months In, Here’s What Happened
In 2026, enforcement and interpretation around I&D practices continues to evolve, and companies are being asked to adhere to strict guidelines in their company practices.
- January: Title VII was back in the headlines.
- March 4: Executive Order (EO) 14173 on Ending Illegal Discrimination and Restoring Merit-Based Opportunity was under scrutiny.
- This EO, issued on Jan. 21, 2025, was blocked by court injunctions. As of February 2026, it is back in effect but under increasing scrutiny. It requires federal contractors and grantees to certify that their organizations’ I&D programs don’t violate federal anti-discrimination laws and acknowledge that this certification is “material” under the False Claims Act.
- March 26: EO 14398 issued on Addressing DEI Discrimination by Federal Contractors.
- This EO limits certain workplace initiatives and specifies the removal of diversity, equity, and inclusion (DEI) practices from covered contracts. Contractors are required to revisit company policies and procedures.
- April 10: IBM paid a $17 million settlement.
- The U.S. Department of Justice (DOJ) charged IBM with violating the anti-discrimination requirements of its federal contracts. IBM denied wrongdoing but paid to resolve the issue rather than endure a longer fight.
The Takeaway
"The prediction held — and the story underneath it sharpened. Six months ago, the question was whether organizations would reframe inclusion around performance. ... Enforcement moved faster than the reframing: All of 2025 produced investigations and essentially no settlement dollars; the first seven months of 2026 have already produced roughly $18 million. We've moved from posture to payment,” said Carolynn Johnson, acting CEO of SHRM Linkage and president of the SHRM Center for Inclusion & Diversity.
I&D compliance regulations continue to evolve, and it’s up to leaders to ensure their organizations are being legally compliant, workplace unifying, and business accretive.
“Here's the lens that makes sense of this moment: diversity is the input, civility is the process, and inclusion is the outcome,” Johnson said.
U.S. companies lost a reported $2.6 billion in productivity per day due to incivility, according to the SHRM Q2 2026 Civility Index. This indicates the need for I&D, yet how companies choose to operate within an increasingly regulated I&D landscape is evolving. According to SHRM's 2026 CHRO Priorities and Perspectives report, 60% of HR executives said they anticipate many companies will eliminate or reduce I&D initiatives. Despite this prediction, a recent study from Catalyst and NYU Law’s Meltzer Center found that an overarching 80% of companies remain committed to I&D, and only 34% have reduced efforts in this area.
"The retreat narrative is louder than the reality. What's actually happening inside most companies isn't abandonment, it's recalibration," Johnson said. "And recalibration grounded in evidence — built to be defended — is exactly what this moment requires."
SHRM Said: 'Workforce Fragmentation Will Peak'
We predicted that workforce fragmentation would peak in 2026. Fragmentation happens when organizations bring in multiple types of workers — such as contractors, full-time employees, and consultants. This creates varied workplace policies across different roles and departments. In a competitive talent market where occupational mismatch spans industries, companies face growing pressure to fill open roles. Many have responded by hiring contractors and adjusting policies to build "micro-climates" within their organizations.
6 Months In, Here's What Happened
At six months in, fragmentation continues to provide organizations with a solution to talent needs. However, U.S. Bureau of Labor Statistics (BLS) data on traditional employment arrangements, including contractor roles, shows a plateau over the first six months of the year. The number of self-employed workers (seasonally adjusted) across industries has maintained levels above 8.7 million since February 2026, but have yet to reach the June 2025 measure of more than 9 million workers. There may not be a peak, yet, but various pressures have encouraged some organizations to fragment their workforces.
"At a time of elevated labor costs, companies are electing to increase contract positions to backfill critical vacancies or test long-term workforce management strategies," said Noah Yosif, chief economist at the American Staffing Association. Consider the practical applications: A healthcare organization can hire a locum tenens (temporary) physician to ensure continuity of care or an engineering firm can contract with a project manager for the term of one project.
Building a fragmented workforce often means partnering with a staffing agency to fill roles. Yosif noted that employment from temporary help services has risen for six consecutive months. “Anecdotal data from the Federal Reserve’s Beige Book affirms that contract employment is rising despite relatively low levels of labor demand,” Yosif said.
The Takeaway
Fragmentation is an approach to workforce building that helps organizations meet their goals through targeted hiring — but it is not the right approach for every organization. "In a high-cost environment, companies that continue to hire fall within one of two buckets — they face high turnover, which forces employers to look for new employees, or they have specialized needs that cannot be filled in-house," Yosif said.
Organizations that retain their workforce well or those that do not require large volumes of specialized workers may have little reason to lean into fragmentation. However, industries such as healthcare, engineering, IT, and scientific services will continue to drive demand for both full-time and fragmented roles.
SHRM Said: ‘Employees Work Harder, Smarter … and Collect Two Paychecks’
Financial pressure changes how people work. We predicted that polywork — or holding multiple jobs — would be here to stay, driven by rising costs and the fear of layoffs. That prediction carried real consequences for employers. On the upside, employees gain new skills that can be applied elsewhere in the organization. On the downside, burnout and absenteeism follow close behind. SHRM's October 2025 Current Events Pulse survey of HR professionals and U.S. workers found that 42% of U.S. workers have a side hustle, and 31% reported previously having one.
6 Months In, Here's What Happened
Six months in, the U.S. labor market has been somewhat uneven and unpredictable. First, after ending 2025 on a weak note and experiencing early volatility in 2026, total normal payroll employment suddenly rose by nearly 500,000 jobs across March, April, and May. However, that surge was followed by weaker than expected employment gains in June, as well as a notable decline in labor force participation. With overall economic uncertainty remaining elevated, these developments paint a murky picture for the road ahead.
That cooling may be showing up in polywork patterns, too. The most common arrangement — holding a full-time role while completing work on the side — appears to be easing from its post-pandemic peak. At the height of inflation pressures in late 2022, 44% of U.S. workers reported having a side hustle, up from 39% in 2020, according to LendingTree — a surge driven largely by rising costs and financial necessity. By 2026, that share had pulled back to 33%, according to the most recent data from Lending Tree, which may reflect some relief as inflation eased. One year’s data isn’t enough to call it a trend, but it still stands out as a large fraction of workers. More concerning, the underlying motivation hasn't changed: 61% of workers with side hustles said their life would be unaffordable without the extra income, the same survey found — a sign that most aren't hustling for spending money, but for survival.
“The rise in gig economy work after the onset of COVID-19 was likely driven by several factors, including pandemic-driven shutdowns of many businesses that have historically offered part-time employment, rising demand for services central to the gig economy (e.g., food delivery), and a sharp rise in inflation that led many people to find secondary sources of income,” said Justin Ladner, senior labor economist at SHRM. “Falling inflation and more general stabilization of conditions have contributed to reducing the prevalence of side hustles in more recent years; however, these jobs remain central for many workers.”
The Takeaway
That push-and-pull is exactly what makes the full picture hard to see. The reality is more nuanced than data can show. Kristen Appleman, founder and principal at GCB Performance, emphasized that uncertainty around the economy can lead to fear and pursuing ways to feel more financially protected in case of job loss.
“There is recognition that the second job is also about enjoyment, a pursuit of their passion, and fulfilling a sense of purpose,” Appleman said. “Like many aspects of life, it is not one-size-fits-all.”
HR leaders should keep this in mind as they shape financial wellness benefits and weigh both the positive and negative effects of employees working multiple jobs.
SHRM Said: ‘Training Is Dead — Long Live Real-Time Upskilling’
We predicted that one-size-fits-all training would be on its way out, driven in large part by the rapid pace of technology, including artificial intelligence, that renders static learning obsolete. Taking its place is AI-driven, real-time learning personalized to each individual employee. That shift is already underway: 1 in 3 learning and development (L&D) executives (33%) named skills training as a top priority for the year, according to SHRM's 2025 L&D Executives: Priorities and Perspectives report. Their leading focus areas included role-specific training and personalized learning paths.
6 Months In, Here's What Happened
The need for real-time upskilling continues to grow, and at the six-month mark, the implications for organizations are becoming clearer. SHRM research has pointed to a group of standout performers dubbed “Skills Strategists” — organizations that treat L&D as an integrated discipline rather than a series of one-off programs. Compared with most organizations, they are more likely to report stronger financial and nonfinancial outcomes, higher employee engagement, and a better workplace culture, according to SHRM's Skills (R)evolution: Preparing Employees for Tomorrow's Jobs report.
Part of what makes this strategic approach urgent is the speed at which technical knowledge is evolving. "When we think about technical skills, the half-life has dramatically increased," said Chris Wortmann, director of global talent management at Carnival Corporation. "Things are moving so fast that you may learn a program language today that's obsolete in six months." This rapid pace of change underscores why strategy matters so much in L&D, a theme that runs throughout SHRM's research.
To keep up, organizations are also rethinking how they deliver learning. "There is a shift where we no longer send people away to an offsite but are integrating learning into the day-to-day," said Hakeem Basheer, senior manager of learning programs at Carnival Corporation.
That integration introduces a new challenge: capturing and holding employee attention. "When even streaming services are changing content so users can watch while using their phones, L&D's role expands into internal communications," Basheer said. "It becomes a question of: 'How do I maintain the attention of employees?' and that involves treating employees as consumers to be marketed to."
The Takeaway
The world of L&D has been forever changed. "Training has been mostly insufficient for years, and this moment is making that undeniable," said Matthew Daniel, senior talent strategy and mobility principal at Guild, an education benefits company.
His advice to leaders is to stop treating training as a single effort and start treating it as two distinct priorities. "On one end, investments in talent and career development for everyone, not just high-potential employees," Daniel said. "On the other, continuous, in-the-flow learning tied to the specific skills the business needs."
Even amid all this change, leaders should not lose sight of the fundamental skills that sustain a thriving organization. "You have to continue to learn, especially in the age of AI, but what doesn't change is the leadership aspect — how you think critically, your emotional intelligence," Basheer said. "They're not ‘power skills’ anymore, they're the hard skills."
SHRM Said: ‘AI Hasn't Lived Up to the Hype, but Companies Aren't Giving Up’
We predicted that an organization’s success in 2026 would no longer be defined by what AI could do, but by what it actually delivers. Return on investment (ROI) would be top of mind, shifting business strategy from AI experimentation to AI refinement. Achieving this meant that leaders would focus on pragmatic, targeted AI deployments capable of delivering measurable business results and treating AI initiatives like any other performance program tied to metrics such as productivity, retention, and growth.
6 Months In, Here’s What Happened
Many CEOs (40%) view AI adoption as the top organizational priority for the year, according to SHRM’s Navigating AI in the Workplace: 2026 report. Additionally, the intent to deliver strong ROI on AI investments continues to be a dominant theme for organizational strategy, but over the past six months, AI implementation didn’t come without some bumps in the road. AI usage grew, but leaders are still determining how to best utilize the technology and which policies to have in place to protect employee data.
One significant finding is that AI usage varies by company and job level. SHRM’s The State of AI in HR 2026 report revealed that 62% of organizations have implemented some form of AI adoption, with 39% deploying it within their HR function. Also worth noting is that leadership is a driver of AI: An overarching 73% at the HR director level and above reported adopting AI by 2025, compared to 65% of individual contributors. However, of those organizations that opted into using AI, just 49% have established company-wide AI use policies.
In the first quarter of 2026, AI-driven layoffs often dominated national attention as each month saw another major company cite AI in its decision to cut headcount. However, the ROI wasn’t always straightforwardly positive or productive: A recent survey of HR professionals whose employers made AI-driven layoffs in the last year found that many of those layoffs didn’t have the intended financial payoff.
Some companies also began monitoring internal AI usage to tie those numbers to performance reviews, but discovered their employees were "tokenmaxxing," or inflating the number of AI tokens used to measure their productivity. This led Amazon to cancel its internal AI leaderboard, and Meta walked back its employee activity tracking for AI data collection after internal pushback.
The Takeaway
Despite these hiccups, this trend holds true because senior leaders are still focused on proving the ROI of their AI initiatives. Over half of CEOs in the 2026 KPMG U.S. CEO Outlook Pulse Survey (61%) said they are still investing in AI upskilling for their workforces. And while only 7% of leaders surveyed by KPMG for its Q2 Global AI Pulse survey reported an established ROI from their AI investments, 71% felt positive that their organizations are making progress toward a fully integrated AI-human workforce.
Moving forward, organizations are likely to continue focusing on demonstrating the measurable, sustainable value of their AI tools, according to Cal Engstrom, senior researcher for workplace technology and AI at SHRM.
“ROI is the largest determining factor in success,” Engstrom said. “How do you confidently justify value and ROI from these tools? This is where refinement comes in. Expect organizations to continue working toward this goalpost.”
SHRM Said: ‘AI Coaches Will be the Death of Annual Performance Reviews'
We predicted that AI would become an invaluable tool for managers as they complete annual performance reviews, long considered a process in need of strategic improvement. With new AI tools that can develop performance review templates, design improvement plans, and suggest better communication strategies when delivering feedback, the potential to completely reimagine the annual performance review is significant.
6 Months In, Here’s What Happened
Companies began introducing new AI tools geared toward optimizing the performance review process. One software company delivered an AI-native platform meant to turn continuous performance signals into actionable coaching for managers, while another built an AI-powered role-play simulation tool for managers to practice difficult conversations before having them with real people.
A Gartner survey found that 46% of managers are experimenting with AI to improve their work, compared to only 26% of employees, and argued that the role of managers has been overlooked in driving effective AI tool use in the workplace. AI-empowered mental health support for managers entered the conversation, as well, with a new AI-enhanced manager coaching tool to help managers tackle burnout, difficult conversations, and resilience.
The Takeaway
Despite these new process improvements, AI wasn’t the death knell for performance reviews altogether, and it is unlikely that AI will become a total replacement for conversations guided by real relationships and manager expertise.
AI tools may be entering the mainstream to make performance management easier, but the past six months have made it clear that the human element of management and employee relations is irreplaceable. Take it from employees themselves: A recent SHRM survey asked what technology should never do in an organization, and employees said that technology should not:
- Recommend discipline or layoff decisions (cited by 50%).
- Auto-track an employee’s mood or mental health (49%).
- Detect conflict through email exchanges nor make recommendations on who employees should or shouldn’t work with (43%).
- Assess productivity (26%).
Including conflict and discipline decisions as well as measures of productivity and mood, there are crucial aspects to performance management that employees believe should remain fully human.
“When it comes to performance management, AI can help, but it ultimately wouldn’t be able to pull off a truly fair review without a human leading it,” said Kenny Pyle, lead technology analyst at SHRM. “It’s a challenge of credibility and a lack of authority in the eyes of the person being reviewed. There are some lines AI shouldn’t cross, and HR should facilitate conversations about what those are.”
Pyle suggested that while annual reviews are unlikely to go anywhere — they're crucial for conversations around compliance and compensation — they may lose dominance as the primary mechanism for performance management overall.
SHRM Said: ‘Recruitment Is Broken; Automation and Algorithms Can't Fix It’
We predicted that job seekers would struggle to break through an oversaturated job market where AI-driven platforms are relied upon to screen, rank, and even interview candidates. At the same time, we also predicted that AI would impact the candidate application process because employers would face an influx of applicants using AI to tailor their resumes or conduct interviews on their behalf in real time.
6 Months In, Here’s What Happened
What resulted over the past six months was an AI-driven job market frenzy that ultimately didn’t solve many issues facing both employers and job seekers alike. In this year’s highly competitive job market, 66% of recruiters said they have found it harder to find quality talent, 65% of global job seekers said the job search has gotten harder, and AI is overwhelmingly being used by both recruiters and candidates.
LinkedIn also announced its own AI-enabled hiring assistant for recruiters, while Indeed embedded AI functions into its entire screening process from job description writing to candidate matching. These tools are aimed at saving recruiters time and making the process more streamlined, but they could lead to even less trust from job applicants, splintering the process even further.
At the same time, AI job interviews became more mainstream, complicating a job market where verification is key to securing a candidate. AI interviewing proved that recruitment was broken — employers saw candidates with AI-built resumes that didn’t match their actual skills. SHRM coined the term “skillfishing” to describe this experience, in which candidates claim to have skills, credentials, or capabilities they don’t really possess. The trend has been seen in applicants from the entry level all the way up to the executive level, underscoring that trust is one major way in which the recruitment process has been broken by AI.
The Takeaway
Recruitment has indeed been broken, and both sides of the recruiting process are unlikely to experience an easy fix anytime soon as AI continues to intensify its capabilities. In fact, recruitment could, in theory, be completely overhauled by AI, should an organization choose that route, according to talent acquisition expert Tim Sackett.
“When we think about AI in the recruiting process, we could replace every function in talent acquisition with AI right now,” he said at a session during SHRM26. “AI can do intakes, post jobs, source, match, screen, interview, background check, onboard.”
However, technology alone won’t solve the deeper challenges of hiring. Across areas such as process management and true talent expertise, it’s a system ripe for evolution. Sackett suggested that higher-value activities like building community talent pipelines and proactively pursuing top talent are places to begin, but organizations should consider where the human element is irreplaceable.
“Recruiters must rethink the entire [talent acquisition] function,” he said. “Where do we want human contact in the hiring process? Humans should be at the center of the moments that matter.”
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