3 Labor Trends to Impact Work, Leaders and Employees in 2026

UKG unveiled its three annual predictions set to impact work, leaders, and employees globally in the coming year. 

“With the workplace changing faster than ever, leaders can no longer afford to read and react. They need to use the workforce data and insights they have to anticipate what’s next and adapt quickly to shifting labor and market trends,” says Rachel Barger, president, GTM at UKG. “The 2026 UKG Megatrends show how embracing change can be a real advantage — from using AI with a people-first approach to adopting flexible talent models and creating environments where employees can truly thrive.”

1.     The people-first AI imperative: Trust, understanding, and collaboration are key to AI success

UKG’s Great Place to Work study found that two-thirds of organizations are culturally unprepared for AI transformation, while UKG research shows only 53% of frontline employees believe their employer is preparing them for an AI-driven workplace. Companies that prioritize trust-building and cross-functional collaboration — specifically uniting IT, HR, and communications — will unlock AI's elusive value.

2.     The talent ecosystem reality: Agility, internal marketplaces, and schedule flexibility will drive retention

The talent shortage is accelerating, driven by shifting demographics, declining labor participation, and widening skills gaps. This has created a workforce talent crisis that traditional hiring can't solve. Simultaneously, losing good employees hurts even more when qualified talent is scarce, and UKG research shows that work schedules and limited career growth are the top reasons frontline employees quit. Build an adaptive talent ecosystem that blends full-time, part-time, gig, and AI-enabled roles.

3.     The employee enablement era: Strategies for autonomy, access, and personalization drive engagement

UKG research found that two in five employees lack decision-making authority, even for basic tasks like solving customer problems or improving processes. Leaders should shift their focus from engagement programs to enablement strategies to build trust-based cultures while providing autonomy, access to tools, and personalized and holistic well-being support. According to research, high-trust cultures generate 42% more discretionary effort in both good and recessionary times.