The balance of power at work shifted toward employers in 2025. What’s predicted for 2026?
The pandemic changed almost everything about work: where we work, when we work and even, for many people, whether we work at all. After discovering the freedom of working from home, people began questioning the norms that had dominated the workplace for decades. The result was the Great Resignation: a massive wave of people quitting their jobs due to longstanding and deep-rooted dissatisfaction.
While companies scrambled to try to retain employees, the employees felt empowered like never before. The ensuing talent shortage gave workers the upper hand for a time, but now things have changed.
“In 2025, the balance of power tilted back toward employers,” says Annie Rosencrans, Director of People + Culture at HiBob, a people management platform. “Widespread layoffs, hiring freezes, and return-to-office mandates—particularly across tech and finance—gave companies more control.”
The Great Resignation may have run its course by mid-2023, but just because people aren’t quitting en masse doesn’t mean they’re now happier at work. I connected with Rosencrans to discuss what characterized 2025, what’s coming in 2026 and how employers and employees can navigate a fast-changing landscape. Here’s what we covered.
A shifting power dynamic
It’s a depressing view of the workplace: an unending tug-of-war between companies and the people they employ. The advantage gained by employers in 2025 was quickly felt. “Reports in mainstream business media noted that job cuts hit their highest levels in over two decades, while employment experts warned that overreach could erode trust and retention,” says Rosencrans.
“At the same time, many organizations focused on internal mobility to fill critical roles cost-effectively, and AI reshaped the skills landscape—boosting productivity in some areas while exposing capability gaps that left employees anxious about job security.”
Rosencrans believes that this employer advantage will persist but soften in the coming year. “The most forward-thinking companies will use it to reset relationships, not control them,” she says. To facilitate this reset, organizations should lean in to three vital areas:
1.) Skills development
2.) Transparent communication
3.) Clear pathways for career growth
“Internal mobility and AI-driven upskilling will define the new contract between employers and employees,” Rosencrans continues. “Power will shift from control to collaboration toward organizations that measure success not just by productivity, but by trust, credibility, and how effectively people can grow within the business.”
In other words, employers may continue to enjoy a greater measure of power in 2026, but only those who use it wisely will build a durable advantage.
Human: a feature, not a bug
This past year, even as AI took center stage, human-centered work has been quietly on the rise. “Research tells us companies are investing in upskilling, human-skills leadership, and personalized employee experiences,” says Rosencrans. “For example, the trend for ‘human-skills leaders’ (empathy, communication, creativity) is gaining traction.”
The human touch makes everything better, from the very start of the employee-employer relationship. “Our internal data show that organizations with strong onboarding programs, with clear role clarity and connection to purpose, see significantly better early engagement,” says Rosencrans. “For instance, our HR Investment Insights 2025 report found onboarding made the biggest impact of any people program.”
Another human-centered perk is flexibility. “It’s firmly part of the mix now,” says Rosencrans. “Workers expect and in many cases receive hybrid or remote models, giving them more control over how work fits into life.”
Engagement challenges
Despite the positive steps many companies are taking to promote human-centered work, there is still much to do. ‘Quiet cracking’ is the latest way to describe the disengaged workforce, referring to employees who seem fine on the surface but are internally exhausted, disengaged and disconnected.
“Engagement levels globally are alarmingly low,” Rosencrans warns. “We’re seeing, internally, more employees asking for clearer career development and stronger leadership support and without these things, motivation drops.”
“Employee engagement today goes far beyond perks or pay since it’s about creating a sense of purpose, belonging, and growth,” stresses Rosencrans. “Organizations need to focus on authentic connections, transparent communication, and opportunities for development to keep employees motivated.
“With that being said, engagement now hinges on how deeply people feel seen, supported, and aligned with their organization’s mission.”
2026 hiring projections
On the hiring front, 2026 will likely be marked by increased caution by both organizations and workers.
- Employees may approach career decisions more thoughtfully. “They may be more cautious when evaluating opportunities for stability and long-term growth, weighing roles, projects and organizational fit against personal and professional goals and compensation and benefits,” says Rosencrans.
- Employers may invest in their workforce more deliberately. “They will make hiring more selective to concentrate on roles that are the most critical to strategic objectives and business outcomes,” Rosencrans says. “They will also focus more energy into targeted upskilling programs, helping employees grow into their roles and reduce reliance on external hires.”
Overall, Rosencrans predicts that organizations that communicate transparently, invest in employee growth and balance agility with empathy will be best positioned to navigate uncertainty, while workers will favor employers who offer clarity, resilience and development opportunities.
Pulling for a better 2026
2025 saw employers and employees pulling in different directions, with employers gaining the advantage. What we’ll see in 2026 is that an advantage gained by force rather than persuasion can be erased by force when conditions change.
To collaborate with their people rather than control them, Rosencrans advises organizations to prioritize cultivating agile cultures where employees feel empowered to experiment, learn new technologies and pivot quickly.
For individuals, she encourages learning skills such as digital literacy, emotional intelligence, critical thinking, a growth mindset and openness to change.
“Both sides should align on shared goals, resilience, inclusion, and innovation, so businesses remain competitive while people find purpose and stability in their work,” says Rosencrans.
Her final predictions for the coming year? “Human skills—empathy, adaptability, communication—will outweigh technical expertise as AI takes on more operational work. Leadership development will focus on credibility and connection, not command and control. And as employees seek more autonomy and purpose, rigid hierarchies will give way to networked, trust-based teams.”
2026 may well be a tug-of-war, but organizations that want to win it will pull with their employees, not against them.