As HR functions speed toward the new year, they are likely prioritizing all things AI: tech selection, integration, productivity gains and more. Yet, despite the focus on and investment in AI, experts say other ongoing people challenges will continue to bubble up—and require just as much innovation as HR is bringing to the AI space.

2026 talent forecast: Look beyond AI

Here are what three experts say are the leading 2026 talent challenges HR will face—and how to confront them strategically.

1. Becoming a world-class HR organization

The end of the fiscal year is a prime opportunity for HR to lean into the bigger picture: What can they do to become a “world-class HR organization”?

“This can be a reflective moment,” says Chris Johnson, senior vice president and general manager of employer services at Equifax Workforce Solutions. How can the function convey to leadership that every HR dollar is being well-spent?

Equifax is seeing leading-edge HR organizations leverage its solutions to benchmark their function against organizations of similar size, revenues and geographic locations in areas including compliance and cost-to hire, Johnson says.

With comprehensive benchmarking data and hiring strategies focused on delivering value, including practices that take advantage of hiring tax credits, HR can tell leadership, “Here’s how we’re saving the organization money.” And that message leads into the ROI for HR,” Johnson says.

That messaging can be strengthened with tighter ties to other key C-suite leaders, like the CFO.

“A strategic partnership with the CFO,” he says, “is something that HR leaders shouldn’t be overlooking at this point in the year.”

2. The people factor in AI use

Many organizations are so laser-focused on integrating AI into their organizations and driving up adoption that they’re neglecting what comes next: “the leadership mindset, learning culture and trust needed to sustain long-term engagement and growth,” says Trent Henry, EY global vice chair, talent.

Employees are already leveraging AI at work—88%, according to recent EY research—yet only a quarter of organizations are poised to drive “high-value outcomes” from employee use of AI.

HR needs to create environments where employees feel truly confident using AI to enhance their work and development. Invest in career agility, flexible career pathways and inclusive workplaces tailored to employees across generations and experiences, he advises.

“The future of talent,” he says, “won’t only be defined by organizations with the most advanced tools, but by those who build the most adaptable, confident and connected people.”

3. Talent and skills gaps

As of January 2025, the U.S. Bureau of Labor Statistics estimates there are about 1 million more Americans leaving the job market annually, largely driven by the retiring Baby Boomer generation. This is creating a significant talent supply concern, says Fran Maxwell, global CHRO team and people and change leader at consulting firm Protiviti.

At the same time, the World Economic Forum predicts that 78 million new jobs will be created in the next few years—but they will look very different, pointing to a need for new skills within the workforce. And according to WEF, most organizations at the moment plan to look externally.

“We can assume that it’s going to be very costly to bring in highly-sought after skills,” Maxwell says, “as there will be a lot of competition amongst organizations, so organizations need to be operationally excellent at developing and upskilling their talent.”

At the same time, HR needs to strategies to addresss sinking employee engagement amid global upheaval and tech-driven uncertainty, and ways to thoughtfully approach job redesign in the age of AI—all of which require people to be at the core of the response.

“With much of the focus on implementing AI and improving productivity, organizations tend to consider the impact on people too late in the process,” Maxwell says. “After more than 25 years of working with hundreds of organizations, I’m still struck by how many continue to treat their most valuable asset—their people—as an afterthought.”

Maxwell points to the rise of ERPs in the late 90s and early 2000s, which were intended to drive process efficiency, but often failed because people enablement wasn’t a priority. He also cited mergers and acquisitions that center financials over culture.

“We continue to see organizations making the same mistake today,” he says, “by focusing solely on implementing AI without thinking about the impact on our people.”