The People Challenges Growing Companies Will Face in 2026

Let’ be REEL for a moment.  2026 isn’t just another year, it’s the moment when the next wave of people challenges will separate organizations that scale with intention from those that struggle under the weight of yesterday’s systems.

Talented teams, evolving regulations, rapid tech advances, new expectations.  All of it is reshaping what effective people strategy looks like. The companies that win this year won’t just react, they will prepare.

Here’s what every small and growing business needs to anticipate as we head into 2026, and how to get ahead.

Attracting and Retaining Top Talent Gets Harder, Not Easier

Finding the right people won’t be a one-time sprint, it’ll be an ongoing marathon.

• Many employers continue to struggle to fill full-time positions and retain high-potential employees, even as hiring slows in some sectors.

• Expectations around competitive pay, meaningful work, and connection to mission will continue to shape where talent chooses to stay.

For small but growing companies without a big employer brand, this means being intentional about career pathways, manager development, and employee experience, not just perks.

 AI Integration Isn’t Optional. It’s Strategic (and Challenging)

AI is moving past automation into areas like predictive analytics and everyday workforce decision support. But adoption isn’t as straightforward as installing a new app.

• HR teams need to balance efficiency with empathy and ethics, especially as AI influences hiring, performance insights, and workforce planning.

• New HR roles focused on AI governance, training, and insights are emerging, requiring new skills and leadership alignment.

And while AI can free time from routine tasks, today’s implementations still require thoughtful human strategy to ensure trust and long-term impact.

Skills Shortages and Workforce Planning Will Become Central to Growth

Talent shortages aren’t just about attracting people, they’re about building the right skills internally.

Organizations increasingly recognize that the skills they need tomorrow might not exist today, and they must invest in upskilling and reskilling to stay competitive. Workforce planning, once a “nice to have,” will become a business imperative as leaders forecast talent needs and mitigate risk.

Employee Expectations Are Evolving Fast

People aren’t just looking for jobs, they’re looking for meaningful work, alignment with values, and supportive environments:

• Engagement and personalized experience are now retention imperatives, not perks.

• Flexible work models remain essential to attracting and keeping talent, especially for smaller employers competing with larger organizations.

This means leaders must design work, feedback, and rewards to reflect what people actually value, not just what’s easy to measure.

Compliance Complexity Will Increase, Especially Across States and Regulations

New and evolving regulations around pay transparency, protected leave, and multi-jurisdictional law will demand sharper HR attention:

• Pay transparency requirements are expanding, with new laws affecting what must be disclosed and how compensation records are maintained.

• Leave requirements and other mandated protections continue to vary widely across states.

For small and growing organizations, especially those operating in more than one state, year-end and ongoing compliance readiness will be business-critical.

Manager Enablement and Employee Relations Will Be Strategic, Not Administrative

Employee relations and manager capability are becoming strategic multipliers. As organizations navigate shifting priorities, support for people leaders will define whether culture strengthens or erodes:

• Mental health challenges and complex employee signals won’t disappear, and they will shape workforce dynamics.

• Managers with clear frameworks and support will be the ones who drive performance, engagement, and retention.

This puts managerial support and employee relations practices at the center of proactive people strategy, not on the sidelines.

Data, Analytics and Insight Will Shape People Strategy

Data isn’t just another “nice to have” in 2026, it’s foundational:

• Predictive analytics will inform hiring, retention, and performance decisions.

• Organizations that leverage people data can anticipate issues before they happen, reducing turnover and increasing agility.

Ditching guesswork for insights will be a competitive advantage, especially for companies that want clarity and speed in decision-making.

How Growing Organizations Can Prepare Now

If 2025 was about survival and adaptation, 2026 will be about intentional scaling. Here’s how to think about the year ahead:

1. Invest in managers now. Equip them with the skills to lead through change.

2. Build internal mobility and skills roadmaps. Develop talent you already have.

3. Adopt AI thoughtfully. Balance automation with human judgment and ethics.

4. Stay ahead of compliance complexity. Especially if operating across states.

5. Use data intentionally. For hiring, engagement, and retention decisions.

In Summary

2026 will challenge organizations not because of what’s new but because of how fast everything is changing. The companies that thrive won’t be the ones that react, they’ll be the ones that anticipate, adapt, and lead their people with clarity and confidence.

Download our free People Preparedness Checklist here:

People Preparedness Checklist.pdf

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Let’s be REEL: future success will belong to leaders who treat people strategy as a core business strategy, not a back-office burden.