In 2026, the labor market is shifting in significant ways. Technological changes, evolving employee expectations, and ongoing economic uncertainties are reshaping how employers attract and retain talent. These changes create a key opportunity to reexamine hiring, development, and retention strategies. Here are five attraction and retention trends for employers to watch in 2026.
1. The Rise of Gig Work
More employees are turning to gig work. Statista reports that over 70.4 million Americans currently freelance, and by 2027, freelancers, gig workers, and crowd workers are expected to make up the majority of the workforce.
This shift is reshaping the labor market as more workers prioritize autonomy, flexibility, and control, often stepping away from traditional employment. At the same time, employers are increasingly using gig workers to meet fluctuating labor needs, from delivery roles to specialized work like design and software development. To stay competitive, employers must adjust recruitment strategies and workplace policies and understand the gig economy’s dynamics to build a more resilient, responsive workforce model.
2. Artificial Intelligence and Redefining Roles
Artificial intelligence (AI) is reshaping the workforce. Korn Ferry reports that 43% of companies plan to replace certain roles, especially those with repetitive or data-heavy tasks, with AI.
At the same time, AI is driving demand for new roles in technology, energy, AI infrastructure, and areas like oversight, ethics, and human‑AI collaboration. Skills such as adaptability, critical thinking, and emotional intelligence are becoming just as important as technical expertise. Employers are investing in reskilling for emerging roles, including prompt engineering and algorithmic auditing. For both workers and employers, success in 2026 will depend on learning to work with AI, not against it.
3. Burnout as a Business Risk
Employee burnout is rising worldwide, with many workers facing severe physical, emotional, and mental exhaustion. Nearly half (48%) cite overwhelming workloads as the main driver, according to a DHR Global survey. As organizations streamline teams and push for efficiency, employees are taking on more responsibilities without added support, often working longer hours to meet growing expectations.
The strain extends beyond the workplace. In hybrid environments, blurred boundaries make it harder to disconnect, turning stress into a constant. When heavy workloads are combined with limited recognition and few growth opportunities, engagement drops, and burnout deepens. While employer-sponsored wellness programs can help, more sustainable solutions come from right-sizing workloads and investing in ongoing career development.
4. Layoffs Reshaping Talent Pools
Economic uncertainty is reshaping workforce strategies, and layoffs are a central factor. According to Resume.org, 6 in 10 companies plan to reduce staff in 2026, reflecting expectations of slower growth and tighter budgets. While overall employment and hiring remain relatively stable, the share of layoffs is high and projected to stay that way, signaling a more selective, cautious approach to talent management. Many employers are hiring in key areas while cutting roles elsewhere.
These decisions have lasting effects. Remaining employees often take on heavier workloads, increasing the risk of stress and burnout. At the same time, layoffs expand the talent pool with experienced professionals, creating both opportunities and challenges for hiring and retention. To protect long‑term stability, employers must weigh short‑term budget relief against the potential impact on morale, loyalty, and retention.
5. Stability Returning to the Labor Market
After several years of volatility, the labor market is beginning to stabilize. According to Indeed’s 2026 U.S. Jobs & Hiring Trends Report, job postings are expected to level off rather than surge or decline, signaling a shift from the rapid hiring cycles of the pandemic era. Slower economic growth, improved workforce participation, and more cautious expansion are all contributing factors.
For employers, this means the urgency to fill every role may ease, but competition for specialized talent, especially in sectors like health care and technology, will stay strong. Organizations that overhired in recent years may now prioritize retention and internal mobility over aggressive recruiting. In 2026, successful hiring strategies will focus on skills alignment and long-term workforce planning.
Summary
To stay competitive in 2026, employers should closely track what employees value today and in the future. As the labor market stabilizes and shifts, organizations can refine their talent strategies by emphasizing flexibility, career development, and meaningful engagement to attract and retain skilled employees for the long term. Download the bulletin for more details.
