What’s keeping HR up at night

As you get ready and plan for 2026, there are several top HR priorities that you’ll want to prioritize as you strive to support your people and your business in meaningful ways. Based on the latest insights and data, here are the five top HR trends and priorities to guide your plans and make a positive impact.

1. Simplify and automate to maximize impact

You can’t talk about HR and not mention AI in today’s environment. However, you might have noticed that the excitement around AI and automation has shifted a bit. In 2024, many organizations were eager to try out all kinds of new tools, but now the focus is more thoughtful. It’s less about chasing every new technology and more about first simplifying processes, then automating in ways that truly add value.

Before you jump into automation, take a moment to look at your current HR and rewards processes. Are there steps that could be streamlined or policies that could be updated? When you simplify your foundation, automation becomes much more effective and easier to manage.

For example, AI can help you spot outdated or conflicting benefits policies, making it easier to clean things up and improve the experience for your employees. In areas like retirement and financial well-being, automation can help answer employee questions quickly, but it’s important to balance this with compliance and data security.

By focusing on simplification first, you free up your team from repetitive tasks and give them more time to focus on the things that really matter — like supporting your people and shaping strategic rewards programs. This approach leads to better productivity and a more positive experience for everyone.

2. Tailor total rewards offerings

Your workforce is wonderfully diverse, and a one-size-fits-all approach to rewards doesn’t always hit the mark. By segmenting your employees, you can design rewards that really resonate with each group.

For example, front-line workers might appreciate immediate financial rewards and benefits that help with work-life balance, while office professionals might value career development opportunities and long-term incentives.

Using data and employee feedback helps you understand what matters most to each segment. Then you can align your budgets and programs to focus on what will have the biggest impact.

This targeted approach helps you make the most of your resources, keeping your people motivated and engaged without overspending on perks that don’t add value.

In times when budgets are tight, smart automation can help you allocate rewards precisely — rewarding top performers, addressing pay equity, and supporting your most critical roles.

By tailoring your rewards thoughtfully, you create a strategy that’s both efficient and effective, helping your people and your business thrive.

3. Driving business results through rewards

Rewards programs are a great way to attract, keep, and motivate your people. But to really shine, your rewards strategy should also clearly connect to your business goals and show measurable results..

Sometimes, business leaders don’t see modernizing pay practices as a top priority, which means there’s an opportunity for you to help them understand the real value of rewards. Try to speak their language by showing how your rewards programs can boost sales, reduce hiring costs, or improve productivity.

Take retirement plans, for example. They’re not just benefits—they’re powerful tools to help your workforce transition smoothly. With many employees working longer or delaying retirement, your retirement programs can support phased retirements or early retirements with confidence, helping your business stay agile.

And with healthcare costs rising, it’s important to balance managing expenses with investing in employee wellness. When you connect these investments to things like reduced absenteeism and better productivity, you help shift the conversation from just cutting costs to supporting growth.

By aligning your rewards with clear business outcomes, you show how HR plays a key role in driving success—not just managing costs.

4. Engage your remote workforce effectively

Remote work is a big part of today’s world, and it brings some unique challenges for keeping employees engaged. Data shows that remote workers sometimes feel less connected, less fairly compensated, and less confident about their career growth compared to those on-site.

To support your remote team, it helps to be thoughtful and proactive. This might mean more frequent check-ins, virtual recognition, and clear career paths that everyone can see, no matter where they work. It’s also important to make sure your compensation is fair and transparent for remote roles.

Because hybrid work models tend to show higher employee engagement, finding ways to blend in-person and remote work could be beneficial. But when remote work is the best fit, using technology and thoughtful program design can help bridge the distance.

5. Connect across the business for exponential success

Total Rewards and HR often work in their own corners, but the best results come when you connect and collaborate across teams. Building strong partnerships with IT, Finance, and business leaders helps you create a more integrated and effective approach.

A big part of this is having clean, connected people data. Many organizations have great data about customers and products, but not always about their people. When your data is organized and integrated, you can link rewards to business results and personalize experiences for your employees.

With this foundation, technology and managers can help employees get the most from their benefits—like reminding them to file claims or increase their 401(k) contributions at the right time. This kind of personalized support makes a big difference in engagement and satisfaction.

You’ll also find that younger employees, like Gen Z, expect this seamless, connected experience. Meeting them where they are by leaning in with relevant, easy-to-use rewards helps keep your younger employees engaged and motivated.

By working together across the business, you create a total rewards experience that effectively supports your people and your organization.

Remember, engagement is about more than perks—it’s about helping your people feel connected, valued, and supported in their growth. Listening to your remote employees and tailoring your rewards and communication to their needs will go a long way.

Looking ahead to 2026

Focusing on the above five areas can help you build a stronger, more connected, and more impactful HR function.

By embracing these priorities, you’re setting yourself and your HR team up to be strategic partners focused on helping your organization grow and succeed. The future of work is bright, and with a clear understanding of the top priorities to focus on, you’re ready to lead the way.

How do these priorities line up with your plan for 2026? Mercer is here to help you identify the people priorities that will support your business success. Give us a call at 855-286-5302 or email surveys@mercer.com