Introduction
Leading organizations through the complexities of today’s workplace requires CHROs to navigate a dynamic and often unpredictable environment. Amid economic uncertainty and shifting workforce expectations, the challenges facing HR leaders are multifaceted and demand both strategic foresight and adaptability.
CHROs play a pivotal role in aligning workforce strategies with broader business objectives, ensuring that HR initiatives not only address immediate organizational needs but also support long-term success.
In 2026, the urgency for strategic alignment has only intensified. CHROs must anticipate emerging trends — such as the growing adoption of AI, the need for leadership development, and the challenges of economic volatility — while simultaneously addressing immediate workforce priorities. At the same time, CEOs are also signaling financial pressures ahead, with more than 4 in 5 (81%) expecting labor and total workforce costs to rise over the next 12 months.1 Navigating these competing demands will be essential for CHROs to guide their organizations through an increasingly complex landscape.
SHRM conducted research to address these evolving demands and achieve three key objectives:
- Understand the priorities that CHROs are setting for their teams in 2026.
- Explore the challenges that CHROs are facing in their roles, from macro-level to personal challenges.
- Determine CHROs’ perspectives on emerging workplace trends.
Based on insights from 129 CHROs, this report provides a comprehensive view of the strategies, challenges, and trends defining the HR landscape in 2026. It aims to equip CHROs and other HR executives with actionable insights to navigate the complexities of today’s workplace and position their organizations for success in the years ahead.
OUR PERSPECTIVES
2026 CHRO Priorities
Leadership, Culture, and Change Are Key Priorities for 2026
As CHROs look ahead to 2026, setting clear HR priorities remains a critical yet complex undertaking. They must balance immediate workforce needs with long-term organizational goals while navigating a rapidly changing business landscape.
To better understand how CHROs are addressing these complexities, this research explores the top three priorities CHROs are focusing on for 2026. The findings reveal continuity across 2025 and 2026 as well as clear alignment with CEOs, reflecting a shared view of the challenges ahead and the strategic focus needed to navigate them effectively.
CEOs anticipate workforce reductions (cited by 75% of respondents) and organizational restructuring (74%), along with heightened expectations for workforce agility (78%) and increased reliance on contract and gig talent (72%) over the next 12 months. These expectations signal a shift toward more flexible workforce models and reinforce the areas where CHROs must lead — managing change, strengthening culture, and preparing leaders to guide their organizations through ongoing transformation.2
In response, many CHROs are prioritizing leadership and manager development to equip leaders for this period of change, enhancing employee experience to keep people engaged and supported, and advancing organization design and change management capabilities to effectively navigate evolving workforce strategies. These priorities require strong alignment with broader business objectives and close collaboration across the executive team to ensure HR initiatives drive both organizational performance and employee success.
Leadership and Manager Development Remains a Top Priority
To gain insight into CHROs’ priorities for the next year, they were again asked to select their priorities from 16 key HR practice areas defined in SHRM’s HR Excellence (HR-X) Framework.3
The data show that leadership and manager development (i.e., enhancing skills for guiding teams and managing organizations effectively) continues to lead all practice areas by a substantial margin, with nearly half of CHROs (46%) identifying it as one of their top three priorities for the next year. This continued focus on leadership and manager development mirrors findings from HR professionals at all levels, who identified managers’ and supervisors’ ability to effectively lead their teams as a critical area their organizations need to address.4
While leadership and manager development is the clear top priority, there is substantial variability across secondary and tertiary priority areas. Nearly 3 in 10 CHROs are prioritizing employee experience (29%; i.e., a holistic approach to enhancing employee engagement, productivity, and satisfaction) and organization design and change management (28%; i.e., aligning organizational structures and processes with strategic goals to enhance adaptability and performance). These results mirror those from 2025, demonstrating that, alongside leadership and manager development, many CHROs continue to view these practice areas as critical to their organization’s success. Most priorities remained similar between 2025 and 2026, but CHROs are placing less emphasis on talent management in 2026 when compared with 2025 (15% versus 27%).
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Leadership and Management Skills Dominate Development Priorities
The overall emphasis on leadership and manager development is reinforced by a clear focus on developing the skills necessary to lead and manage effectively. Among CHROs that are prioritizing leadership and manager development, the top focus areas remain largely unchanged. Over 2 in 5 CHROs (43%) reported that leadership skills are their top focus area, followed by management skills (38%). These areas are critical for fostering the ability to motivate teams, guide operations, and adapt to evolving business landscapes. Other areas such as identifying high-potential talent (12%) and coaching (7%) continue to receive less attention, suggesting that CHROs are concentrating their efforts on immediate, high-impact areas of leadership development.
Focus Within Employee Experience Shifts to Culture
Employee experience remains a top priority for nearly 3 in 10 CHROs (29%), and the top focus area within this category continues to be employee engagement. This aligns with findings from SHRM’s 2026 State of the Workplace research, in which workers, HR professionals, and HR executives highlighted employee engagement as a critical area that organizations need to address.5 Closely tied to engagement is workplace culture, an area of focus that has more than doubled since last year, rising from 15% of CHROs identifying it as a focus area to 31%. Engagement and culture are deeply interconnected, with culture serving as the foundation for fostering engagement. As organizations face increasing disruption, workplace culture has become essential for driving agility and adaptability.
Change Management Leads Organization Design Efforts
In an era when constant organizational change is the norm, CHROs continue to prioritize strategies for managing transitions effectively. Change management remains the top focus area within organization design and change management, with over half of CHROs (53%) identifying it as their primary concern. This focus reflects the critical role CHROs play in guiding organizations through planned transitions, ensuring that changes align with strategic goals and are implemented smoothly. Other focus areas within this category include organizational development strategy (25%) and organizational structure (22%), which highlight broader efforts to align processes and structures with evolving business needs. Overall, this priority area and its related focus areas align with CEOs’ expectations for the year ahead, with nearly 8 in 10 CEOs (78%) emphasizing the growing importance of organizational agility in workforce management, while 74% anticipate that organizational redesigns or restructuring will become more prevalent.6 CHROs are not only managing change but also proactively shaping their organizations to be more adaptable and resilient in the face of ongoing challenges.
Overall, the priorities for CHROs in the upcoming year mirror the strategic landscape of 2025, with a continued emphasis on leadership and manager development, employee experience, and change management. However, the shifts within these categories, such as the growing focus on workplace culture and the sustained emphasis on change management, reflect an adaptive approach to emerging challenges. By addressing these areas, CHROs are positioning their organizations to navigate the complexities of today’s business environment while laying the groundwork for future success.
2026 CHRO Challenges
CHRO Challenges for 2026 Highlight a Complex and Evolving Landscape
As organizations navigate an increasingly volatile business environment, CHROs are faced with a growing array of challenges that span both external macroeconomic pressures and internal organizational priorities. Economic uncertainty and wage inflation remain top concerns, with economic uncertainty now surpassing wage inflation as the greatest challenge compared to 2025. At the same time, talent shortages, demanding candidate expectations, and skills gaps further complicate efforts to attract and retain top talent in a competitive labor market.
Internally, financial pressures such as rising operational costs and the need to meet ambitious financial goals are reshaping HR strategies, underscoring the critical link between HR and overall business performance. Additionally, challenges such as maintaining employee morale, addressing leadership development gaps, and managing limited budgets continue to test the resilience and adaptability of CHROs.
Wage Inflation and Economic Uncertainty Are Top CHRO Challenges
Overall, CHROs continue to view wage inflation and economic uncertainty as key challenges moving forward. However, in contrast to 2025, when wage inflation was most identified as the greatest challenge, now more CHROs reported economic uncertainty as their greatest challenge. Moving beyond wage inflation and economic uncertainty, 40% of CHROs identified talent shortages as a challenge, with 17% reporting it as their greatest challenge. Recent research by SHRM reinforces the existence of challenges related to talent shortages, because nearly 1 in 3 active job openings (33%) cannot be filled by unemployed people with aligned occupation experience.7 In addition to these challenges, CHROs were most likely to identify demanding candidate expectations (cited by 39%), skills shortages (37%), and labor market competition (35%) as macroeconomic challenges.
CHROs Face Mounting Financial Pressures
Financial pressures remain a dominant concern for CHROs, with rising operational costs (cited by 43%) and the pressure to achieve financial goals (42%) topping the list of organizational challenges. Both are significant, but notably, the pressure to meet financial targets was more frequently cited as the single greatest challenge (21%), underscoring the direct link between HR strategy and business performance. Beyond fiscal concerns, adapting to technological advances such as AI (35%) and fostering clear communication (34%) also emerged as critical issues. These findings highlight the expanding role of the CHRO, who must now be as adept at navigating financial discussions and technological shifts as they are at managing talent.
In contrast, CEOs identified adapting to technological advances — particularly AI — as their leading organizational challenge, followed by the same financial pressures that CHROs identified.8 This distinction suggests that while CEOs are looking ahead to the transformative impact of AI on their business models, CHROs are feeling the immediate strain of financial constraints on workforce strategy, investment, and operations.
Macroeconomic pressures and internal financial priorities are creating an increasingly complex environment for HR leaders and organizations alike. Economic uncertainty and persistent wage inflation remain external challenges, intensified by a competitive talent market characterized by skills shortages and high candidate expectations. Internally, greater emphasis is placed on achieving financial objectives, with rising operational costs and the pressure to meet financial targets significantly shaping organizational strategy. These findings illustrate the expanding scope of CHRO leadership, which now encompasses not only traditional talent management but also meaningful contributions to financial strategy and the adoption of new technologies such as AI. Successfully balancing these demands will be essential for organizations seeking to maintain resilience and competitiveness in the current business landscape.
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Maintaining Employee Morale Leads Talent Challenges
The data reveals a notable overlap between the top priorities for CHROs and the challenges they anticipate within organizational talent. Nearly 3 in 10 CHROs (29%) identified employee experience as a top HR practice area priority, while nearly half (46%) said they view maintaining employee morale and motivation as a challenge. Furthermore, 46% identified leadership and manager development as a top priority, while 37% said establishing effective leadership development programs is a challenge. These findings demonstrate that organizational talent is both a primary area of prioritization and a major source of challenges.
In addition to challenges related to maintaining employee morale and establishing effective leadership development programs, 36% of CHROs identified attracting skilled employees as a challenge, with 17% reporting it is their greatest challenge. This indicates that while attracting skilled employees is not among the two most frequently cited challenges, it is still a deeply felt and pressing concern for the organizations most affected by it.
Budget Constraints and Resource Limitations Are Impacting HR
Over 1 in 3 CHROs (36%) reported HR budget constraints or limited resources as a challenge. This marks an increase from 2025, when 31% said the same. The percentage that reported it as their greatest challenge has remained relatively consistent between years, with 22% saying it was their greatest challenge in 2026, compared with 19% in 2025. It is important to note that these findings reflect an alignment between CHROs, recruiting executives, and learning and development (L&D) executives. Both recruiting executives9 and L&D executives10 also cited budget or resource limitations as their top functional challenges. These results demonstrate that CHROs and senior executives within the HR function continue to have issues obtaining sufficient funding.
These insights also underscore the intricate balance that CHROs must navigate between prioritizing key HR initiatives and addressing persistent challenges, particularly within organizational talent and resource allocation. The alignment between CHROs and other HR leaders, such as recruiting executives and L&D executives, highlights a shared struggle to secure adequate funding and resources, which remains a critical barrier to progress. As CHROs strive to enhance employee experience, leadership development, and overall morale, overcoming these financial and resource constraints will be essential to driving sustainable growth and achieving strategic HR goals.
CHROs Navigate Personal and Professional Demands
Lastly, the demanding nature of the CHRO role is clearly reflected in the personal challenges these executives face. Workload management (cited by 38%) and navigating workplace politics (33%) emerged as significant hurdles, with both being identified as the greatest personal challenge by 1 in 5 CHROs. This highlights the immense pressure to deliver results while managing complex organizational dynamics. Close behind is the struggle for work/life balance (34%), reinforcing the always-on reality of senior leadership. Furthermore, feeling the need to upskill on AI (29%) demonstrates that even top executives must continuously evolve their own capabilities.
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The evolving role of CHROs highlights the multifaceted challenges they face in today’s dynamic business environment. In navigating macroeconomic pressures such as economic uncertainty and wage inflation as well as addressing internal priorities such as employee morale, leadership development, and financial constraints, CHROs are tasked with balancing competing demands. These challenges are further compounded by the need to adapt to technological advancements, manage personal workloads, and maintain work/life balance. As organizations continue to rely on CHROs to bridge the gap between talent management and business performance, their ability to lead with resilience, innovation, and adaptability will be critical to sustaining organizational success in an increasingly complex landscape.
2026 CHRO Trends and Expectations
Emerging Workplace Trends: Balancing Technology, Skills Development, and Workforce Dynamics
CHROs are reshaping the workplace by embracing AI, prioritizing skills development, and addressing evolving workforce dynamics. With AI-driven productivity enhancements and targeted upskilling initiatives, HR strategies are becoming more innovative, inclusive, and future-focused. This research highlights CHROs’ perspectives on the trends shaping the future of work, including the growing integration of AI into HR processes, the rise of multi-generational workforce management, and the increasing emphasis on transparency and ethical practices. Leaders are navigating the dual challenges of leveraging technology to drive performance while maintaining trust and equity, pointing to a future in which AI, skills, and accountability converge to create agile, people-centered organizations.
Confidence in AI Adoption Remains Strong
Continuing the findings from the 2025 report, CHROs remain optimistic about the growing adoption of AI in the workplace over the next year. A vast majority (92%) said they anticipate that AI will be further integrated into the workforce, closely mirroring last year’s sentiment (90%). Similarly, 88% said they expect an increase in the use of AI to boost workforce productivity (compared to 87% in 2025), and 87% foresee greater adoption of AI within HR processes (up from 83%). These consistent trends highlight the continued momentum of AI as a transformative force in the workplace.
Notably, CHROs are increasingly recognizing the importance of AI-related skills. A significant 84% predicted that AI skill requirements for current and open roles will become more prevalent, a notable rise from 76% in 2025. The same percentage (84%) also said they anticipate greater application of AI to tasks traditionally performed by employees, reflecting the growing integration of AI into day-to-day operations.
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Emphasis on Skills Development Grows
In addition to AI adoption, CHROs are focusing on skills development to meet the demands of a rapidly evolving workplace. Over 8 in 10 (84%) said they expect upskilling in AI-specific skills to become more prevalent, while more than 7 in 10 foresee an increase in the use of short, focused learning modules (77%); opportunities for employees to earn certifications in emerging fields such as AI, data analytics, and sustainability (74%); and a broader emphasis on upskilling and reskilling to adapt to technological advancements (74%). These findings underscore a clear shift toward fast, targeted skills development, with AI at the forefront of workplace transformation.
Technology-Driven Monitoring Redefines Workforce Management
The integration of AI and monitoring tools is rapidly transforming how organizations evaluate and manage their workforces. Nearly 7 in 10 CHROs (68%) said they expect the use of AI tools to monitor and evaluate employee performance in real time to become more prevalent, while 64% foresee growing employee concerns about workplace surveillance. The rise of monitoring tools in remote and hybrid work settings (cited by 50%) and the use of wearable devices to track employee health and productivity (27%) further illustrate an increasing reliance on technology to drive performance and safety. However, these advancements also raise critical questions about privacy, data security, and employee trust.
Managing Multi-Generational Workforces Becomes a Growing Trend
Managing a multi-generational workforce is a prominent focus, with nearly half of CHROs (47%) anticipating that addressing the associated challenges and opportunities will become more prevalent. As organizations navigate the complexities of addressing the diverse needs and expectations of Generation Z, Millennials, Generation X, and Baby Boomers, they are also contending with labor negotiations and strikes, which 40% of CHROs said they expect to become more prevalent. Additionally, 42% said they expect “silent firing” (i.e., making employees’ jobs unbearable so that they quit in an effort to replace their jobs through automation) due to AI investments to rise. These trends highlight a growing need for tailored strategies that foster inclusion and collaboration across generations while addressing broader labor concerns.
In contrast, over 3 in 4 HR professionals (77%) said they anticipate that sponsorship opportunities for job candidates on work visas will become less or much less prevalent over the next year. This shift could have significant implications for talent acquisition strategies, particularly as organizations strive to build diverse and agile teams in an increasingly competitive global market.
Transparency and Accountability Take Center Stage
Corporate leadership is under increasing pressure to prioritize transparency and accountability, with 40% of CHROs expecting this trend to grow and 38% anticipating that pay transparency will rise. However, other areas of corporate social responsibility (CSR), such as sustainability and climate change initiatives, are seeing less momentum. Only 16% of CHROs said they foresee an increased emphasis on sustainability and CSR, and just 11% predict greater adoption of workplace practices to address climate change. This suggests that while transparency is gaining traction, broader environmental and social initiatives may be deprioritized in the near term.
Shifts in I&D and Ethical AI Practices to Reshape Workplace Strategies
The landscape of inclusion and diversity (I&D) is shifting, with 60% of CHROs expecting companies to reduce or eliminate I&D initiatives. At the same time, there is a growing focus on ethical AI practices, with 57% of CHROs anticipating efforts to reduce bias in AI tools used for hiring and promotions. These trends reflect a dual challenge: maintaining equitable workplace practices while ensuring that emerging technologies are implemented responsibly.
CONCLUSION
The findings highlight the pivotal role that CHROs play in shaping the future of work by prioritizing leadership development, fostering workplace culture, and driving change management to align workforce strategies with long-term organizational goals. As CHROs navigate economic uncertainty, financial pressures, and talent shortages, they must balance workforce investments with broader business objectives while maintaining employee engagement and morale. Additionally, the rapid adoption of AI and emerging technologies positions CHROs as leaders in supporting upskilling, ethical AI implementation, and workforce innovation. By combining strategic foresight, adaptability, and a people-first approach, CHROs are driving enterprise success and preparing their organizations to thrive in an era of rapid change.