Experts cite importance of metrics and advocacy from HR in prioritizing flexibility, AI training
Canadian employers are entering 2026 with “cautious optimism” but expect hiring challenges and softer demand, according to new survey data.
The Harris Poll-Express Employment International survey, released Jan. 14, reveals that right now, 29 percent of job seekers are actively looking for a new job, down from 39 percent last year, while 71 percent are “not fully committed to their job search.”
In that environment, experts say decisions about HR budgets are crucial, particularly around retention, flexibility and skills.
“The current variety in work arrangements across and within industries is striking, and to me, it makes the role of HR even more central and important to organizations,” says As Erin Reid, professor and Canada research chair in work, organizations and careers at McMaster University.
In a competitive talent market, especially for organizations insisting on full-time office work, the stakes around retention are rising, Reid explains.
“It’s becoming a very competitive environment to keep talented staff, and so I think generally, HR budgets should be very large in organizations,” she says, adding that talk about a coming recession is increasing the pressure. “It’s just going to be really hard to keep people.”
Retention and flexible work as core HR budget priorities
The Harris Poll showed that 40 percent of employed workers are worried about not getting a raise they deserve this year, and 27 percent fear having fewer opportunities at work.
Reid explains that retention should sit at the top of HR budget discussions for 2026, particularly where employers are pushing for more in-office time.
“I think flex-work, hybrid schedules, are a really important way to retain people, especially when people can go work for other organizations on a hybrid or remote basis,” she says.
“Continuing to advocate for options for flexible schedules I think is really important.”
Reid acknowledges that in times of economic uncertainty, employers can be tempted to cut staff because of the immediate benefit to the bottom line. However, that approach can have knock-on negative effects in the form of turnover and low morale.
“Cutting staff for the sake of cutting staff, and then just loading up those who remain and expecting them to take on more duties and overwork, can have a really negative spiraling effect,” she says.
“Because the people who remain are concerned about losing their jobs, and they’re overworking and so they’re looking for new jobs.”
Making HR more strategic: metrics, mindset and business priorities
Reid stresses that HR’s influence over 2026 budgets will depend on how clearly leaders can connect people-related spending to business outcomes – requiring an increased emphasis on data analysis and interpretation for other leaders.
“Metrics are essential. We value what we count, right? That is how decisions are made,” says Reid. “So, to the extent that HR can bring metrics and evidence to the table, the better positioned HR leaders will be to advocate for the importance of an HR budget.”
As an example, she suggests HR can help organizations understand the costs of decisions like moving from hybrid to fully in-office work, especially for leaders who don’t necessarily come from people management backgrounds.
“We know that a good balance for white-collar, in-person, computer-based work seems to be three days in office, two days at home … we know that when you go to five days, you don’t actually see an increase in productivity for those kinds of jobs,” Reid says.
“When you have more rules and less flexibility about how people work, you open up a need to accommodate people who don’t easily fit in the box. And so that is a cost metric type of evidence that HR should also be bringing to the table.”
HR education of leadership
The lack of background in leadership can make it harder for some to see the full cost of cutting people-related investments, Reid says – making hard data even more important when advocating for bigger HR budget lines.
She points to large tech companies as prime examples of CEOs who don’t necessarily have business backgrounds.
“We are living in a moment where many people who are leading organizations don’t have training in in management and leadership,” Reid says.
“That’s really essential to run a good organization. So, I think there might be a mindset challenge there, because the people who are perhaps making the ultimate decisions do not have expertise or training in how to lead people effectively. … I think HR leaders in a budget crunch in a downwards economy really need to do a lot of educating.”
HR should invest in non-traditional AI training
Reid adds that AI adoption is an area where HR should advocate for practical training that not only supports organizational needs, but individual careers as well.
“There’s a lot of hype and fear around AI. I think for HR, it would be important to try to find ways to support employees in accessing AI training,” she says.
“They need to know how to use and work with it for their own professional development. I think the extent to which HR can advocate for training for individuals on AI, that would be valuable for people.”
This training extends to HR professionals as well, as AI has become a key component of the role, says Susie Lee, chief learning officer at Degreed.
“Because how do you manage through AI, and governance, and risk and all of those things that HR cares about? You need to understand that in the context of AI,” she says.
“How do you help support the business on AI and transformation if you don’t understand it yourself in HR?”
Investing in learning, not just technology and content
Lee is seeing HR functions “really pressure-tested at the moment, and a lot of people are feeling the cuts.”
Her main concern is that organizations are pouring money into technology and AI while neglecting to address the “human side” of tech adoption and the associated required skills.
“They are getting rid of a lot of the learning people within companies, and resources,” she says.
“Some of it is because they’re reorganizing their operating model to support AI, and also breaking down silos between HR functions like talent acquisition and learning.”
Lee describes a familiar pattern: organizations buy technology and content – “AI investments and all of that good stuff” – but under-invest in helping employees actually change how they work.
“Where I think people get fuzzy is where we need to lean into helping our employees adopt and change with whatever’s happening around the industry, around them within the organization, to drive business impact,” she says.
Traditional learning formats are part of the problem, Lee says, stressing that learning investments need to move away from one-off courses and generic content libraries and towards continuous upskilling that’s customized to people’s actual jobs.
