What’s Shaping HR in 2026: Highlights from ExtensisHR’s Outlook Webinar

Quick look: The human resources (HR) landscape in 2026 is being defined by rapid change, from cautious adoption of artificial intelligence (AI) to a renewed focus on company culture. ExtensisHR’s recent webinar, 2026 HR Outlook: What’s Breaking, What’s Shifting, and What to Redesign Now, explores what small businesses need to do to not just keep up, but to stay ahead. Read on for the key takeaways, then watch the full on-demand session at your convenience.

The pace of change in HR has never felt faster. New technologies, shifting workforce expectations, and an increasingly complex compliance environment are creating both challenges and opportunities for small and midsized business (SMB) leaders as 2026 unfolds.

To help you cut through the noise and focus on what matters most, ExtensisHR’s Chief Human Resources Officer David R. Pearson, recently hosted a webinar, 2026 HR Outlook: What’s Breaking, What’s Shifting, and What to Redesign Now, joined by special guest Anthony Onesto, Vice President, Platform and Marketing at 15Five.

The session takes the findings from ExtensisHR’s 2026 HR Trends Report a step further, delivering expert perspective and practical frameworks for leaders to move from reactive to strategic.

Below are key takeaways to help your organization keep pace this year, or you can watch the full webinar on demand here.

Pulse check: a look at HR in 2026

Before diving into where to focus, it helps to take stock of where many businesses actually stand. Across organizations of all sizes, HR teams are navigating a set of compounding pressures. And the challenges aren’t isolated, they’re interconnected.

The tools paradox

AI is no longer a futuristic buzzword; it’s here and can make a real impact. However, many HR professionals are still figuring out how, and how much, to lean in.

The challenge isn’t a shortage of tools; if anything, it’s the opposite. HR professionals face a growing number of options, each promising to solve a different pain point. Meanwhile, the capacity to evaluate, implement, and maximize them keeps shrinking.

Resource constraints on HR departments is nothing new. But the new wave of emerging AI programs is adding a new layer of fatigue, with too many choices and not enough time to explore them in depth. And at the same time, leadership is inquiring about AI adoption and the efficiency gains it’s supposed to deliver.

The answer is to be intentional and work closely with vendor partners to understand the full capabilities of the tools, and make sure they are truly applied throughout the organization.

The manager overload

Today’s managers are being asked to do far more than they were hired or trained to do. The traditional expectation was clear: hit targets, meet deadlines, be the subject matter expert in your function, and report progress up the chain.

However, the reality of 2026 looks different. Managers are now expected to lead performance conversations, support employees through mental health challenges, actively shape team culture, navigate compliance requirements, and own a significant portion of the onboarding experience. Most of those responsibilities require a set of people skills that simply weren’t part of their job description or training when they stepped into their roles.

The result is overload and gaps that show up in retention, culture, compliance risk, and the employee experience.

Compliance has moved to center stage

State and local employment laws are shifting faster than most small business policy teams can track, and what was fully compliant last year may not be today.

Department of Labor (DOL) and Equal Employment Opportunity Commission (EEOC) enforcement activity has increased, and SMBs are no longer flying under the radar. Some common risks include:

• Documentation gaps
• Leave law requirements that now layer across federal, state, and local levels
• For organizations using AI tools in hiring, screening, or storing candidate information without a clear governance policy

The 5 trends shaping HR in 2026

David and Anthony spent the bulk of the session exploring five trends drawn directly from ExtensisHR’s 2026 HR Trends Report, and what each one means for today’s SMB leaders:

1. The reluctant embrace of AI in HR

AI is helping HR teams be more productive, with common use cases including:

• Resume screening
• Automating administrative tasks
• Extracting retention signals from people data
• Faster responses to employee questions through chatbots

But on the other hand, AI also increases risk. Screening algorithms can introduce bias, using AI hiring tools without a governance policy creates compliance exposure, and automation can leave people feeling monitored rather than supported.

Adopting AI intentionally, with both efficiency and the human element in mind, is what separates organizations that benefit from those that backslide.

2. Talent management and staffing in a tight market

The hiring environment is changing, with candidate volume down across most SMB categories, job seekers having more leverage than ever, and employer branding being evaluated well before the first conversation.

There is pressure to move fast, but speed without strategy can lead to early turnover due to poor role or culture fit, onboarding that ends after the offer is signed, and retention efforts that start only after disengagement has begun.

Building a clear success profile before the search and carrying that through the entire employee lifecycle can help HR teams move rapidly and create an optimal work experience.

3. Continuous and connected performance management

When feedback is primarily delivered through an annual performance review, employees don’t know where they stand, and it’s often too late to course-correct any concerns.

Here’s why treating performance management as an ongoing partnership works better:

• Feedback is tied to real work in real time
• Growth conversations happen separately from compensation conversations, so both can be honest
• When performance data connects to engagement and retention signals, managers can act on it promptly

4. Defining, measuring, and growing company culture

Values on a wall mean little if they don’t connect to how decisions get made. And if you can’t measure culture, you can’t catch it when it starts to slip.

The organizations that get culture right treat it like an operating system with measurable inputs:

• Recognition, psychological safety, and manager behavior are all trackable
• Pulse surveys are regularly administered
• Managers are equipped to have a range of conversations
• Hiring decisions assess what someone will add to the culture, not just whether they’ll fit into what already exists

5. The rules and risks of compliance and employee relations

Compliance isn’t HR’s problem alone; it’s everyone’s. But SMBs are especially exposed because issues tend to appear only when something goes wrong. Common vulnerabilities include:

• Wage and hour misclassification
• I-9 errors
• Leave law complexity
• Ungoverned AI hiring tools
• Undocumented employee relations discussions

Building a compliance-forward culture means distributing ownership across departments, training managers to document correctly, conducting regular audits rather than scrambling reactively, and updating policies as regulations change.

What should HR leaders strengthen today?

Throughout the webinar, it was mentioned that tools, processes, and people only work when they’re in sync. When they operate in silos, inefficiencies compound and inconsistencies spread. Also, ownership of that alignment should be shared across the organization.

David and Anthony outlined four areas for HR leaders to focus on:

• Align hiring, retention, performance, and compliance: These functions should operate in unison. For example, the insights from an exit interview should inform the hiring profile, and a performance framework should shape a retention strategy.
• Support managers as the frontline of culture: When managers are equipped with the right training, tools, and support, good intentions evolve into consistent execution.
• Make HR processes repeatable, not robotic: Automation and templates free up time for more strategic conversations.
• Build for change, not compliance: Compliance is the floor, not the ceiling. In 2026, the best-positioned HR functions are built to adapt to a landscape that will keep shifting.

Catch the full conversation on demand

These five trends only scratch the surface of what was covered in the full session. David and Anthony expanded on each topic, sharing real-world context, strategies, and guidance specific to the needs of growing businesses.