A year where only exponential performance will do

In 2026, the velocity and volatility of change will likely not abate as organizations continue to strive for growth amid uncertainty. But that growth — value creation, agility and productivity — is increasingly harder to come by: markets are mature, competition is global, disruptors move fast and risk is heightened. To remain competitive, organizations need every facet of the business performing at its peak.

Exponential performance isn’t just essential: it’s existential.

The pressure to deliver exponential improvements in economic performance — through greater agility, productivity, efficiency and impact — is intensifying for leaders, HR professionals and employees alike. Yet this year’s Global Talent Trends study reveals that alignment is breaking down. Leaders are pushing harder for productivity and efficiency, while investors favor organizations with AI-enabled, digital-first cultures that are built to deliver sustained performance. Both ambitions, however, are at risk of being thwarted by a depleted workforce and HR functions that remain siloed and disconnected from business priorities.

To unlock exponential performance and ensure sustainable growth, organizations must act now, intentionally redesigning work, processes and operating models to create the systems that will enable success for all stakeholders. Now is the time for bold bets. Organizations that transform to maximize human and machine capability will win big; the rest will be left in the dust.

Global Talent Trends is based on a survey of approximately 12,000 respondents (C-suite executives, HR leaders, investors and employees). It uncovers four trends as critical levers for leaders in solving the human-machine equation:

Reinvent for a human advantage

AI alone is not enough: work must be redesigned around human-centric principles, with cultures of AI-enablement powered by skills intelligence

Leap forward with insight

Talent foresight is the best risk mitigation strategy, enabling leaders to leverage workforce intelligence to plan ahead and pivot at pace

Recalibrate the value exchange

To drive growth and compete for talent, the employer-employee relationship must be redefined to ensure each sees impact from their investment

Unleash a new HR era

HR must stop looking inward and start designing outward. Its entire future relevance depends on its ability to enable the entire system, not optimize for itself

Together, these trends outline a path from experimentation to intentional, scaled transformation — one that delivers exponential and sustainable improvements in performance, leverages AI as a force multiplier for human capability, and recognizes and manages people risk as a business risk.

Key insights for senior leaders

1. The C-suite and HR are misaligned on what drives performance in the human-machine era

While executives are focused on redesigning work around AI and strengthening people analytics capabilities, HR leaders risk strategic misalignment, just when they need to reinvent.

HR’s top priorities for 20261

Enhancing the employee experience/EVP to attract top talent
Designing talent processes around skills
Rolling out new HR technologies or optimizing existing platforms

C-suite’s top people initiatives for driving ROI2

Redesigning work to incorporate AI and automation
Improving HR/people analytics capability
Improving managers' abilities to lead an integrated workforce (humans and AI agents)

2. Intentional work redesign is the missing piece for sustainable human-machine performance

C-suite leaders and investors see redesigning work to incorporate AI and automation as a major value driver, yet a minority believe the workforce can combine human and machine capabilities.

63% of executives believe redesigning work to incorporate AI and automation is the people initiative that will drive the greatest return

Only 32% believe their workforce can optimally combine human and machine capabilities

3. Talent scarcity risks constraining growth ambitions

Skills shortages will make it harder for organizations to drive performance. In an AI-enabled world it is talent, not tech, that is the force multiplier.

54% of C-suite executives say talent scarcity is the top macro driver influencing people plans

59% of HR leaders say difficulty attracting talent with vital digital skills is the top workforce challenge facing businesses in 2026

4. Executives are planning near-term organizational design changes

Almost all organizations will undergo significant design changes in the next two years, including AI-related headcount reduction.

of executives are planning organization design changes in the next two years

of executives expect AI to lead to at least some headcount reduction in the next two years

5. Talent intelligence emerges as a key differentiator — but significant gaps remain

Investors and executives rank improving people analytics as among the top two people priorities for driving ROI, but HR is falling short.

Executives in high-growth companies3 are 2x more likely to believe that acting on talent insights is as critical as acting on financial insights

of the C-suite see improving people analytics capabilities as the people initiative that will drive the most ROI in 2026

of executives believe their HR team effectively advises them on human capital risks and opportunities

6. A collapse in employee thriving threatens productivity

A depleted workforce, anxious about AI-driven job displacement and alert to inequities in AI access, cannot deliver sustained, exponential performance.

Employee thriving in 2026

Employee thriving in 2024

of employees would consider leaving their organization if they felt disadvantaged by unequal access to AI tools or training

7. It’s now or never for HR reinvention

Few organizations report an embedded strategic HR function, and most respondents expect HR and IT to merge in the near future. HR reinvention is non-negotiable.

8% of the C-suite see HR as an embedded strategic function today

Organizations with an embedded HR function report:

Greater resilience:

76% of executives say their business is resilient and can withstand unforeseen challenges

versus 62% of organizations overall

Improved talent competitiveness:

78% of executives say their organization is well-placed to compete for top talent

versus 62% of organizations overall

56% of HR leaders expect HR and IT to increasingly merge

In the human-machine era, people risk is business risk

Executives remain gloomy about the path ahead: 57% expect a stormy or turbulent outlook over the next 10 years.4 Emerging risks such as misinformation and increased geopolitical conflict add complexity to a fragile and volatile landscape. This context demands the balance of long-term strategic planning with meeting short-term operational needs — in other words, simultaneously running and transforming the business — something 81% of executives admit leaders in their organizations struggle to do.5

In 2025, executives said their biggest short-term risk to business growth was talent-related: reskilling and upskilling their workforces to keep up with shifting consumer demands, evolving business models and transformative new technologies.6 In 2026, talent continues to drive the leadership agenda: talent scarcity is the top social or economic force influencing people plans at an enterprise level, as identified by executives. This is followed by digital acceleration and shifting macroeconomic factors, such as de-globalization and tariffs.

Macro drivers influencing C-suite people plans

In response to the social and macroeconomic forces buffeting their businesses, as well as the rate of digital acceleration, almost all executives are planning organizational design changes. The question is how to ensure these changes drive the agility and productivity needed to deliver exponential and sustainable improvements in performance, beyond short-term gains in efficiency.

98% of executives plan to make organizational design changes over the next two years

Planned organizational design changes

Redesign with intent

For an AI-powered future, the 2026 watchword is intent. In a machine-enabled world, organizational systems and work itself must be redesigned to both deliver business impact and amplify human potential. Most of the C-suite believe redesigning work for AI and automation is the people initiative with the highest potential ROI. This must be the year organizations move from incremental experimentation to intentional AI integration at scale, and they must take their people with them. The time to act is now.

Leader, HR and employee misalignment threatens growth

Achieving and sustaining exponential levels of performance requires continual transformation at pace and scale — but there is a disconnect between stakeholders that risks constraining growth and fueling workforce burnout and resentment.

Leaders are pushing for productivity, and investors expect to see returns on AI investment, but both will be impossible to achieve without a thriving workforce and organizational systems that support continuous reinvention.

This year is the lowest-ever score in employee thriving at work (defined as prospering in terms of health, wealth and career) since this measure was introduced in Global Talent Trends 2018. Burned-out, demotivated people cannot deliver a sustainable transformational agenda, and any productivity gains through technology implementation will be short-lived. Exponential performance is not about ‘sweating the assets,’ but building the human systems that enable people to flourish in pursuit of business outcomes, supercharged through AI and backed by people science and insight.

Employee thriving has fallen sharply

To what extent do you feel you are thriving in your work?

What’s more, while the C-suite and investors seek growth through AI, HR functions are not prioritizing the impact of AI on work accordingly. No wonder, perhaps, that only 8% of executives see their current HR function as strategically embedded. The message for HR is clear: reinvent now or risk irrelevance, as executives become frustrated with the function’s lack of focus on business alignment and the outcomes that matter most.

Global Talent Trends methodology

Global Talent Trends is a global survey of approximately 12,000 people (C-suite executives, HR leaders, investors and employees) from 16 geographies and 16 industries. Data was collected over one month (September - October 2025) via online surveys through a third-party fieldwork provider.

Sample sizes for the specific groups referred to throughout this report are as follows:

Employees

C-suite leaders

HR leaders

Investors

Footnotes:

Top 3 of a list of 22
Top 3 of a list of 22
High-growth firms: Survey respondents self-reported business growth of 10+%; Low-growth: Self-reported less than 3% growth
World Economic Forum. Global Risks Report 2026. Available at https://reports.weforum.org/docs/WEF_Global_Risks_Report_2026.pdf.
Mercer. 2025 Executive Outlook Study: Invest with Intent. Available at https://www.mercer.com/assets/global/en/shared-assets/global/attachments/pdf-2025-mercer-executive-outlook.pdf.
Mercer. 2025 Executive Outlook Study: Invest with Intent. Available at https://www.mercer.com/insights/people-strategy/future-of-work/executive-outlook/.pdf