After some wild swings from year to year, HR engagement is leveling out. Most surveyed HR professionals (78%) feel somewhat or fully engaged and energized, a slight uptick from last year’s report (77%).

HR professionals in Europe feel more energized and engaged than their US peers (85% versus 72%). Alan Cairns, chief people officer at GoCardless, attributes this to three things: work-life balance, cultural diversity, and employment law. “The combination of employee-friendly legislation, works councils, and notice periods has created a culture where employees have greater rights, which in turn leads to greater trust between employers and employees.”

The type of workplace matters too: In this year’s survey, 77% of blue-collar and 75% of gray-collar HR professionals said they were likely or very likely to recommend the field, whereas only 56% of white-collar workers said the same.

The biggest predictors of stability aren’t geography or industry — they’re structural:

If you sensed a “but” coming, you’d be right. Because job security, as it turns out, is no cure for a shift in purpose. In fact, 41% of HR professionals said they’ve considered leaving HR altogether in the last 12 months.

Many of them came to HR to help people grow and thrive, and build a better workplace. But reality has worn down that optimism, leaving many feeling unheard, undervalued, and underwater. 

“HR teams carry the emotional and operational weight of the business, yet too often receive little recognition or support,” said Rana Robillard, chief people officer at Tekion.

The good news, though, is that 32% of those who considered leaving HR found something worth fighting for — and they decided to stay.

The AI hype train has a new conductor. Top HR teams aren’t just chugging along in a window seat with a view — they’re commandeering the controls.

High-performing teams (those exceeding their goals) feel more optimistic and more open to AI experimentation than their low-performing counterparts (those falling short of their goals):

Successful HR teams are getting more value from their tech and using it to create real feedback loops between performance and strategic impact, such as tracking performance, managing talent operations, and unearthing hidden data insights. They’re also more likely to use specialized HR software.

But it’s not just tech that’s driving peak performance. Because there’s one very human thing that teams exceeding their goals do better than the rest: DEIB. High-performing teams are five times more likely than low-performing teams to be prioritizing DEIB in 2026, showing that they value process and people.

“Teams that prioritize DEIB create cultures of trust, agility, and accountability, the exact conditions that high-performing teams thrive in,” said Natalie Breece, chief people and diversity officer at ThredUp. “When people feel like they belong and their voice matters, engagement rises, retention improves, and collaboration becomes more impactful.”

If high performers have created a virtuous cycle between people, process, and tech, low performers are mired in a vicious one:

Here’s the gut punch: 68% of low performers have considered leaving HR altogether, or thought about it but decided to stay — for now.

Whoever said to leave your politics at the office door must not have worked in HR over the last few years. Because these days, everything seems political, employees and leaders are in an ideological standoff, and HR is stuck with a whistle, playing referee:

Polarization isn’t always obvious. Sometimes, it’s little fractures that shape everyday operations — where competing forces tug HR in different directions. Take return-to-office (RTO) mandates and pay raises, for example: Globally, 59% of HR said most or all employees are back in the office, and 67% of them agree with their company’s policy. But support for RTOs is felt even more strongly in Europe.

But some polarization can be worth the risk, especially when organizations make big, bold bets that show exactly what they stand for. 

HR professionals working in companies that take an active stance on political, social, and cultural issues report that 80% of their people are engaged. Meanwhile, HR professionals at organizations that keep quiet report only 50% engagement.

Gone are the days of corporate shrugging and performative lip service dressed up as a rainbow banner or a black square. HR says employees want their organization to stand up, speak up, and say something real.

“In polarized climates, taking a public stance may not be possible or productive,” said Regina Ross, EVP and chief people and operations officer at Opportunity Finance Network. “But that doesn’t mean action is off the table. Having clear guiding principles around when and how the organization takes a stance on a topic helps remove ambiguity in high-pressure moments.”

It’s a simple case of risk versus reward, and the organizations that are willing to show what they stand for are reaping the engagement and performance that follow.

For the first time in six years of this report, performance has overtaken engagement as HR’s top priority — but just barely. While 40% of HR professionals said performance management is top of their list in 2026, engagement follows hot on its tail at 39%.

This narrow lead doesn’t mark a change in direction for HR — if anything, it reinforces the inexorable pull between performance and engagement. These aren’t opposing forces — they’re twin stars, each sustaining the other’s momentum.

“Performance and engagement should not be opposites, they fuel each other and should be well balanced,” said Stéphanie Fraise, CHRO at OpenClassrooms. “Favoring one at the expense of the other creates short-term wins but long-term erosion.”

Fewer teams are struggling with quantifying “good” versus “excellent” performance (40% in 2025 versus 61% in 2024). They’re also getting better at the operational and logistics side, with only 41% of teams citing challenges with analyzing a year’s worth of performance data compared to 47% in 2024. Is HR getting the hang of manager enablement, or is the tech getting better? Some leaders say it’s a mix of both.

“Tech is finally catching up to what good performance management needs, but success still depends on leaders actually using it well,” said Kayshia Kruger, VP of people and organizational development at O. R. Colan Associates. “The differentiator will be enabling managers to have meaningful conversations that data alone can’t replace. Tools help, but culture change is the lever.”

This year, DEIB is a priority for just 16% of teams, down from a peak of 30% in 2023. Performance management and DEIB seem to share inverse trajectories — jostling almost neck and neck in 2023 before splitting sharply and veering off on mirrored paths.

There’s a cruel irony in this relationship. Cutting DEIB programs means organizations could be walking away from one of the most powerful performance drivers they have at their disposal.

It isn’t a case of either-or. High-performing HR teams understand this connection the most — they’re five times as likely to prioritize DEIB.

“When teams feel seen, valued, and empowered to contribute authentically, performance follows,” Breece said. “Diverse perspectives fuel innovation, help teams anticipate challenges from multiple angles, and drive more thoughtful decision-making.”

Updating tech infrastructure is a top priority for 25% of HR teams in 2026 — a ten percentage point increase from 2025.

This is one of the biggest year-over-year increases in our survey, and it reflects a deeper trend that goes beyond routine upgrades. HR teams are getting under the hood of their tech stack and auditing every platform. This timing isn’t coincidental. When viewed in the context of how teams are integrating AI, we can see that they’re facing pressure to build a tech stack that evolves with it.

Where and when people start their careers shapes how they think the workplace should look. Some toiled for the gold watch and the corner office, building trust at a literal water cooler. Others learned to navigate the freedom of work untethered from place — bound by Slack pings and virtual meetings. 

But everyone has a different “why.”

“Every generation brings a unique lens to HR influenced by the world they came up in, the tools they trust, and the values they hold,” said Breece. “As HR leaders, our opportunity isn’t to erase those differences, it’s to leverage them in designing cultures that are both inclusive and future-forward.”

Generational perspectives don’t just show up in what HR professionals want from work — they also define where each generation draws the line on workplace policy. 

Boomers have a clear stance: 83% are fully on board the RTO train. This could be due to their relationship with technology. As the generation that forged their careers through handshakes and hallway conversations, they clearly value face-to-face interaction. As a result, they’re almost twice as likely as Gen Z respondents to say technology reduces human connection (56% versus 30%) and makes work more impersonal (52% versus 23%).

Most generations share some healthy skepticism around HR's increasing reliance on tech, too — with over half of boomers (52%) and Gen X respondents (58%) wanting proof that something works before they’ll commit to using it.

Meanwhile, millennials, who represented over half of survey respondents, are getting into advanced AI tooling — they’re the group most likely to use agentic AI tools regularly in their work.

But Gen Z isn’t afraid to be the voice of dissent. Only 44% of Gen Z HR professionals personally agree with their organization’s RTO policy. As the only generation who grew up with tech right from the cradle, they’re the most likely to actively seek out and try new tech. But that tech experimentation is tempered when it comes to AI, as 70% of Gen Z respondents voiced ethical concerns over AI — more than any other group.

Pay transparency was supposed to end the guessing games on how people get paid. But after years of employee campaigns and new legislation, some organizations are still just going through the motions, rather than using it as the launchpad for deeper pay equity.

And this could be why organizations are losing momentum. Compensation is a priority for just 18% of HR teams in the coming 12 months — down from an already low 21% in last year’s report.

This priority shift could be because teams think the job’s already done. Globally, 54% of HR teams report that their companies are doing a good job with pay transparency compared with 2024 (36%).

European teams are feeling especially confident. For the second year in a row, they’re more likely than their US counterparts to rate their company’s pay transparency as good or excellent (67% vs. 45%). That’s partly due to the EU Pay Transparency Directive taking effect in 2026, and partly to company-level initiatives. 

“In Europe, the 2026 directive sets a legal framework, but real pay transparency demands a cultural shift,” Fraise said. “Beyond compliance, companies need a competency-based and data-driven approach to salary grids, anchored in clarity, fairness, and manager accountability.”

HR teams say they’re feeling more confident about pay transparency, but things get murky fast when employees’ pay doesn’t reflect their actual workload. 

This year, 43% of HR professionals said that employees are expected to take on additional responsibilities and tasks without a pay bump — also known as a dry promotion. 

“A dry promotion feels like more work with no development, no support, and no pay,” said Kruger. “A real growth opportunity includes learning, feedback loops, and exposure to skills and responsibilities. When companies cut budgets and call it growth, employees see right through it. We need to scrutinize how we define roles and career paths to avoid exploiting ambition.”

But organizations may not be getting the memo: Only 20% of American HR teams are increasing bonuses, compared to 41% of European HR teams.

In 2025, every people investment has felt like a negotiation. Snip, snip, snip: Before you know it, the programs you’ve worked so hard to build are on the cutting room floor, and the culture they support begins to fray. 

No surprise, then, that teams are feeling the squeeze. But it’s not just one program that’s under the microscope — it’s everything, everywhere, all at once.

HR teams are feeling pressure to advocate for people programs across the entire employee lifecycle, with 41% citing pressure to defend engagement initiatives. But a relatively even distribution among all priorities makes it clear they’re all important for creating a great place to work. 

And perhaps that’s what makes it hard to pick just one — because when you cut one thread, you unravel the rest.

“Initiatives focused on engagement, learning and development, wellbeing, manager enablement, and DEIB nourish an organization,” Coffey said. “Without them, an organization risks adopting a fixed mindset, hindering growth, and encouraging employee departure.”

But on a global scale, this weight isn’t evenly shared. European HR teams are feeling significantly more pressure than those in the US, with over 40% of European teams citing pressure to justify people programs in every category.

When organizations want quick wins and clear metrics, DEIB initiatives, which are neither fast nor easy, are becoming even more vulnerable.

It’s an ideological conflict between stated values and actual priorities — one that shows up less in what organizations say they’re doing about DEIB, and more in what they’re willing to defend when budgets get squeezed. 

“When companies scale back their DEIB initiatives, they inadvertently signal that their employees are not a top priority,” Coffey noted. “A common misunderstanding is that DEIB exclusively benefits marginalized communities — yet inclusion is universally applicable, and transcends individual identities. Faced with growing pressure to diminish DEIB efforts, companies must now integrate DEIB into all their operations — a practice that should have always been standard.”

Alongside DEIB rollbacks, 55% of teams are under somewhat or significant pressure to consolidate their HR tech stack as organizations call to streamline budgets. 

This comes into direct conflict with HR’s rising priority of upgrading their tech stack to match the pace of AI — and it’s hitting high- and low-performing teams alike. 

But when tech is deeply intertwined with keeping people programs up and running, it’s making the right cuts that counts.

“I try to ‘think like a CFO’ and scrutinize each of our HR investments before the pressure to cut the tool arrives,” said Alexis MacDonald, VP of People at Klue. “What value does it bring? What would we do without this tool? What, if anything, would break? What would our workarounds be? What would the cost be of implementing a new technology as a replacement, or solving the problem manually?

“Answering those questions will help map the path forward — you may find it’s a critical tool bringing a ton of value, or it might be something you can live without.”

With over half (55%) of teams facing tech cutbacks, our data reveals an interesting tension between tech stacks and performance. 

Seventy-two percent of high-performing HR teams use four or more HR tools, and almost half (49%) use six or more tools — double the average for all survey respondents

We’re not saying more is more here. But high-performing HR teams are more likely to design their tech stack with a bias toward action, measurement, and strategy across the entire employee lifecycle, rather than focusing on functional tasks. 

Our 2025 report revealed that AI adoption within HR had stagnated year-over-year. In 2026, it’s booming, but there’s a creeping tension between the opportunities and anxieties AI brings. This scramble is playing out differently across regions, team sizes, and performance levels:

But if you’re among the camp feeling anxious for the future, you’re not alone. A whopping 61% of HR leaders have significant ethical concerns about adopting AI, while only 6% say they have no concerns at all.

“HR leaders should really emphasize that AI is a tool to enhance our work, not replace us,” Marcelin said. “It’ll change how we operate, and we might not need to expand teams as often, but that human connection will always be essential. Those who hesitate might find themselves falling behind, as early adopters gain significant advantages in efficiency and workflow optimization.”

For the last few years, HR has been learning to play puppet master with AI — pulling the strings and tweaking prompts with careful guidance. But as agentic AI becomes the forefront of every conversation, teams are now asking: What happens when AI can pull the strings on its own?

Unlike generative AI, which generates outputs based on prompts, agentic AI can plan, act, and adapt autonomously.

The answer to how to use it, for many, is an evolving conversation. There’s a clear learning curve ahead:

While few HR teams have reached AI maturity, the appetite is definitely there: Altogether, 83% of HR professionals are either excited, hopeful, or optimistic about outsourcing to agentic AI — with a dash of caution, of course.

“High-performing teams are culturally wired to experiment, learn, and adapt,” said Kruger. “Experimenting with AI is a symptom of a learning culture, and AI just amplifies that culture. It’s less about the tech and more about whether the organization has psychological safety embedded into their culture to support the change required to use it well.”