Lattice, the leading HR platform where people and AI succeed together, has released its annual 2026 State of People Strategy Report. Surveying 1,002 HR leaders and managers worldwide, the report provides a detailed view of HR’s evolving priorities as teams prepare for a year of tighter budgets, competing demands, and rapid technological change.
Performance management (40%) is the top HR priority in 2026, followed by employee engagement (39%).
Regional differences: Europe emphasizes L&D and DEIB, while the U.S. leans heavily on performance.
DEIB efforts decline globally—just 16% prioritize DEIB, down from 30% in 2023.
72% of high-performing HR teams use four or more HR tools, showing tech adoption fuels results.
42% of HR professionals already use agentic AI; 83% express optimism about AI adoption.
Nearly half of U.S. HR practitioners considered leaving the field due to stress and undervaluation.
Performance management has emerged as the leading focus for 40% of HR teams worldwide, followed closely by employee engagement at 39%. This emphasis reflects pressure to deliver measurable business outcomes while sustaining a motivated workforce.
“Performance and engagement should not be opposites, they fuel each other and should be well-balanced,” said Stéphanie Fraise, CHRO at OpenClassrooms. “Favoring one at the expense of the other creates short-term wins but long-term erosion.”
The report highlights strong regional differences. European HR teams balance employee engagement and learning & development at 36% each, while also prioritizing diversity, equity, inclusion, and belonging (DEIB) at twice the rate of their U.S. peers (24% vs. 11%).
Globally, however, DEIB initiatives are on the decline—just 16% of teams cite them as a priority in 2026, compared to 30% at their 2023 peak. While 61% of organizations with dedicated DEIB roles will retain them, shrinking budgets and performance-driven demands have deprioritized DEIB in many businesses.
High-performing HR teams are adopting specialized tools faster than others: 72% use four or more, compared to an average of three across respondents. Adoption, however, varies across generations—53% of Gen Z actively seek out new tools, while 56% of Baby Boomers worry tech reduces human connection.
Despite these divides, 42% of HR professionals already use agentic AI regularly, and 83% are optimistic about outsourcing HR tasks to AI. Still, 61% express ethical concerns, highlighting the need for careful adoption.
“Running low-risk pilots will help teams test new AI-enabled tools and scale what works,” said Regina Ross, EVP and Chief People and Operations Officer at Opportunity Finance Network.
AI’s potential role in supporting managers was emphasized by Joaquin Migliore, Director of People Experience at Superside, who noted that AI can “help scale manager calibration and consistency by helping managers compare reviews, identify biases, and condense feedback, as if you're giving them a dedicated HRBP.”
The report also points to stress within the HR profession. Nearly half (48%) of U.S. HR professionals considered leaving the field in 2025, compared to 31% in Europe. Despite these challenges, engagement levels remain high at 78%, and 79% report confidence in job security.
The report concludes that resilient HR leaders are successfully combining human-centered strategies with responsible technology adoption. By embracing AI not as a replacement, but as an enabler of creativity and connection, HR leaders are redefining the future of work.
About the State of People Strategy Report
The 2026 State of People Strategy Report features survey responses from 1,002 HR professionals collected between April 2 and June 5, 2025. Respondents represent various industries, company sizes, job levels, and geographic markets including the US, Canada, England, Germany, France, and other global locations.
About Lattice
Lattice is the best all-in-one people platform, giving HR teams everything they need for HR, Talent, and AI — together in one place. The platform seamlessly integrates a modern HRIS with performance management, engagement insights, AI-driven analytics, payroll, and career development tools, giving HR teams everything they need to build high-performing teams and make data-driven decisions that drive business results.
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