Curious about what 2026 holds for HR? While a year can bring significant change, Ciphr’s experts and HR professionals from around the UK have shared their insights on what may shape the HR landscape in 2026.
In this article:
- Which trends are affecting UK organisations and their HR teams the most?
- Will organisations increase their investment in HR technology?
- Which areas of HR functionality will organisations invest in?
- What will be the major drivers behind HR tech investment?
HR trends 2025: a recap
Want a reminder of what trends and challenges impacted the world of HR in 2025? We’ve got you! Check out our HR trends 2025 webinar for a quick refresher.
HR trends 2026: the big picture impacting HR
In October 2025, we conducted a survey about what the 2026 HR landscape might look like. Nearly 100 Ciphr staff members and external HR experts participated. Here's what they had to say:
Which trends are affecting UK organisations and their HR teams the most?
Our respondents highlighted several forces that are likely to shape HR decision-making in the coming year:
- Rising cost of living/wage expectations – 92.8% of respondents expect this to have a moderate or significant effect
- Rising cost of business – 87%
- Rising cost to employ (NI, etc.) – 87%
- Mental and physical wellbeing concerns – 73.9%
How will spending on HR software change?
Here are the changes we anticipate:
Do you think organisations will increase their investment in HR technology in 2026?
Here's the picture when it comes to budget:
- Yes, they will invest more but will be more strategic with their spending – 44% of respondents
- No, they will keep spending the same – 26%
- Yes, they will invest more – 16%
- No, they will be looking to cut costs – 14%
Which areas of HR technology functionality would you expect organisations to invest more in in 2026?
Respondents told us they're prioritising investment in these areas:
What will be the major drivers behind HR technology investment in 2026?
Here are the motivations we predict:
- Cost saving – 13% of respondents
- Desire for greater efficiency and reduced manual processes – 13%
- Introduce AI to their processes and expand their use of AI – 12%
- Better analytics and reporting – 11%
Do any of these challenges sound familiar? Our HR software could help. Get in touch for a chat to see if we’re the right fit or download our brochure to learn more about our solutions.
Challenges for HR in 2026
Our survey asked how significant certain challenges would be to UK organisations and their UK teams in 2026. Here are the top five challenges according to the experts:
- Offering competitive salaries and benefits packages – 88.4% of respondents
- Finding the right talent in a difficult market – 86.9%
- Skills shortages – 85.5%
- Building capable managers – 79.7%
- Offering upskilling and structured career development opportunities – 79.7%
Offering competitive salaries and benefits – without losing control
Pay and benefits remain one of HR’s biggest pressure points. With wage inflation continuing and employee expectations rising, organisations are being asked to do more with less – while still staying fair, compliant and competitive.
Common challenges include:
- Wage inflation leading to salary compression
- Balancing tight budgets with market competitiveness
- Fragmented data and time-consuming manual processes
- Managing fairness, equity and pay transparency
- Benefits packages that no longer reflect what employees value
What helps:
- A single, trusted source of people and pay data
- Clear pay benchmarking and reward architecture
- AI-supported insights to inform better decisions
- Flexible benefits and salary sacrifice schemes
- Giving managers the tools and confidence to have better pay conversations
Finding – and keeping – the right talent in a difficult market
With skills in short supply and competition high, attracting the right people is only half the battle. Retaining them once they’ve joined is just as critical.
Common challenges include:
- Ongoing skills shortages and fierce competition
- Standing out as an employer of choice
- Manual, disconnected recruitment and onboarding processes
- Limited visibility of talent data and trends
- Higher retention risk as employees reassess their options
What helps:
- Integrated recruitment and onboarding journeys
- Strong, consistent employer brand messaging
- Data-driven insight into hiring and retention trends
- AI-powered screening to save time and reduce bias
- Flexible benefits and clear development pathways
Addressing skills shortages before they become business risks
Skills gaps don’t appear overnight – but they can quickly become blockers if organisations don’t plan ahead.
Common challenges include:
- A shrinking pool of qualified candidates
- Skills requirements changing faster than roles
- Limited internal mobility and progression
- Disconnected learning and development systems
- Employees leaving due to lack of growth opportunities
What helps:
- Strategic workforce and skills planning
- Integrated learning and development platforms
- AI-driven insight into skills gaps and future needs
- Making internal mobility visible and achievable
- Learning-focused benefits that support continuous development
Building confident, capable managers
Great managers don’t just happen – they need the right support, tools and insight to succeed.
Common challenges include:
- Inconsistent management capability across teams
- Limited access to coaching and development
- Manual or fragmented performance processes
- Difficulty identifying future leaders
- Higher attrition linked to poor management experiences
What helps:
- Structured leadership and management development
- Real-time feedback, coaching and insight
- AI-enabled performance management
- Succession planning grounded in real data
- Benefits that support managers’ wellbeing and growth
Upskilling and career development that actually delivers
Employees want to grow – but they also want clarity. Without structure and visibility, even well-intentioned development efforts can fall flat.
Common challenges include:
- Rapidly changing skills demands
- Unclear or inconsistent career pathways
- Siloed, manual learning processes
- Limited visibility of development opportunities
- Retention risks when growth feels out of reach
What helps:
- Structured learning and development programmes
- Clear career frameworks and progression routes
- AI-driven learning and role recommendations
- Flexible benefits that support personal development
- Continuous feedback to keep development on track
Want the full scoop on what HR should expect in 2026? Watch the webinar hosted by our HR and benefits specialists Karen Lough and Phil Curtis:
Watch your HR department thrive in 2026
Despite the challenges listed above, there are a host of solutions you as an HR professional can implement to watch your department thrive and grow in 2026. Investing in HR solutions, from HR software and LMS to recruitment, can help you meet these challenges head on. Automate tasks, facilitate eLearning, monitor trends through robust reporting and more – all with the help of Ciphr.
If you want to learn more about how we can help your HR department meet their goals in 2026, download our brochure or book a demo today.