Today’s world of work is marked less by a lack of awareness about change than by uncertainty about how to respond to it. Our upcoming Future @ Work 2026 report suggests that these pressures are unlikely to ease over the year ahead. Instead, employers are entering 2026 facing a more demanding environment: rapid advances in AI, heightened geopolitical and regulatory uncertainty, and longer-term demographic and sustainability challenges are all converging at pace, making strategic foresight and organisational resilience increasingly critical to navigate in the year ahead.
In this increasingly complex environment, these 26 predictions highlight the key issues that will demand attention from businesses and policy makers by the end of 2026.
Geopolitics
Politics at home and abroad represented one of the most important drivers of change to the world of work in 2025. In 2026, it promises to be just as influential as a result of its impact on regulation, economic policy and approaches to diversity, inclusion and sustainability.
Domestic politics
UK politics in 2026 will be dominated by turmoil at the top of the labour government, but Keir Starmer will still be prime minister by the turn of the year. Despite predictably poor results in the May local elections, we can expect a refreshed cabinet, including possibly a new Chancellor of the Exchequer, which will seek to shift unfavourable polls and grow the economy. By the end of 2026, manifesto commitments will be under further scrutiny.
Dealing with the practical implications of legislative reforms such as the Employment Rights Act will keep employers busy and may impact on recruitment and investment decisions. UK economic growth is likely going to remain weak throughout the year, and (1) rising unemployment and underemployment will reinforce a broader sense of economic stagnation. Official government forecasts published at the end of 2025 suggest unemployment will hover at around 5% throughout 2026. That assessment may prove optimistic: by the time 2027 arrives, unemployment is likely to have edged closer to 6%.
At the same time, while the political unpopularity of mandatory rules to meet net-zero targets by 2050 is likely to lead to further softening in government plans, (2) the underlying push toward green energy will not be reversed. Instead, the narrative is likely to shift, with growing focus on job creation, lower energy costs, and productivity growth.
With people competing with technology for work, a more fundamental debate is likely to emerge about whether (3) taxing work (via employers’ national insurance contributions) is viable in the long-term. In that context, Labour’s decision to increase the employer’s NI rate from 13.8% to 15% may come to be seen as a strategic error.
(4) Reform is likely to remain ahead in the polls throughout the year, but by a narrower margin than at the end of 2025. At the same time, support for Zac Polanski’s Green Party will prove to be more durable than many initially assumed. The continued popularity of Reform and the rise of the Greens will also bring greater scrutiny of their respective economic and labour market policies.
By the end of the year, the political debate is also likely to prompt a broader discussion about the suitability of the British political system for five-party politics (or six, when Wales and Scotland are included). Against that backdrop, (5) pressure to introduce some form of proportional representation is likely to intensify.
European politics
Europe is likely to return to the top of the political agenda in 2026 (if, indeed, it ever fully left that position).
Geopolitical uncertainty will mean that the UK government will see little alternative but (6) to align more closely to Europe politically and economically, as already proposed by the prime minister.
Despite predictable opposition from parts of the media, the government is likely to feel increasingly emboldened to move in this direction. Public opinion has remained broadly supportive of closer European ties, while alternative routes to economic growth are proving increasingly elusive. We can expect further steps on youth mobility, building on the renewed links created by rejoining the Erasmus scheme from 2027, announced in December.
By the end of 2026, discussion of a new customs union is also likely to feel materially closer than it does today. The final weeks of 2025 saw influential figures within the Labour movement, including Wes Streeting, David Lammy and TUC General Secretary Paul Novak, express support for closer customs arrangements with the EU, despite Keir Starmer’s continued opposition.
The government may seek to argue that its manifesto commitment that there would be “no return to the single market, the customs union, or freedom of movement” (p.117) remains intact. A distinction could be drawn between rejoining the existing EU Customs Union and participating in a novel customs framework, framed as preserving sovereignty by avoiding the direct acceptance of EU rules. Such arguments, however, are likely to face fierce scrutiny and hostile reaction from Brexit-supporting media.
Beyond the UK context, (7) Europe itself is likely to enter a period of renewed political introspection. Discussions about EU reform may begin to gather momentum, particularly around the idea of a more integrated core, driven by frustration with internal blockages. These will include the continued influence of Hungary, where Viktor Orban’s Fidesz party is likely to remain in power, despite ongoing concerns about its democratic legitimacy. Closer to home, (8) Europe’s attention will be increasingly turn towards the forthcoming French presidential elections, where Rassemblement National is expected to remain a serious contender.
USA
Tensions between the USA and Europe, including the UK, are likely to intensify throughout 2026. Persistent trade barriers and increasingly divergent approaches to regulating large technology companies will continue to strain transatlantic relations.
(9) In the USA, the Republican Party is likely to lose control of the House of Representatives in the November midterm elections, albeit by a narrower margin than current polling suggests. At the same time, Republicans are likely to retain a slim majority in the Senate, resulting in a divided Congress and continued legislative gridlock.
Despite a Supreme Court decision expected to further limit the President’s power to impose tariffs, Donald Trump will continue to govern primarily through executive orders, proclamations and memoranda. As a result, (10) debate in the UK and Europe will continue to focus on how best to manage transatlantic relations in the short term, while increasingly turning towards what a post-Trump USA, and a recalibrated transatlantic partnership, might look like.
Technology
Notwithstanding ongoing political and economic turmoil, of all the drivers of workplace change technology will remain the most significant in 2026.
Over the year ahead, the (11) focus on skills will intensify as organisations, governments and individuals increasingly recognise their shared responsibility for preparing workforces for a changing world of work. As 2025 drew to a close, the Governor of the Bank of England, Andrew Bailey, warned that the widespread adoption of artificial intelligence could displace people from jobs in a similar way seen during the Industrial Revolution, and stressed the need for the right "training, education, [and] skills in place" to enable people to move into new AI-enabled jobs.
In the next 12 months, however, questions on (12) how we might manage the possibility of far fewer jobs over future years will begin emerging alongside the existing debate on whether AI will merely alter jobs and on the need to upskill workers for the new jobs that replace lost ones. By the end of the year, many more of us will be discussing the Engels’ Pause.
Meanwhile, the adoption of AI and robotics is likely to continue at pace throughout 2026 and to be widely seen as irreversible. While proponents will continue to point to productivity gains and efficiency benefits, their voices are likely to be increasingly drowned out by rising wave of (13) anti-AI populism. Political resistance to AI will become more visible and more polarised, particularly in the USA, where figures from both the right and the left are likely to amplify concerns about job loss, economic inequality, and corporate power.
As AI’s impact on society and the world of work becomes more visible, more people are likely to attribute changes they experience as alienating or disadvantageous directly to the technology itself. AI ethics will therefore rise up the agenda and questions of transparency and accountability will be more prominent in public and political debate. (14) How best to regulate AI will be an increasingly contested political issue and add further strain to transatlantic tensions.
At the same time, the environmental trade-offs associated with AI, particularly the energy demands of data centres, are likely to be better understood. As awareness grows, these compromises are expected to feed into wider opposition to the pace and scale of AI deployment, reinforcing scepticism about its rapid advance.
Notwithstanding these concerns, public use of generative AI is likely to continue expanding in everyday life. In the workplace, however, this widespread familiarity may contribute to (15) unrealistic expectations of what AI can deliver, fuelling an increase in grievances and legal claims. That, in turn, is likely to add further pressure to an already overstretched employment tribunal system.
As delays continue to mount, there will be a growing recognition that the cost of restoring the tribunal system to its current operating model is unaffordable. By the end of 2026, (16) debate is therefore likely to begin in earnest about the need for more radical reform, and what an alternative system might look like.
Demographics
The years ahead are likely to be shaped by two conflicting forces. On the one hand, technological change, particularly in AI and automation, is going to alter the number and nature of jobs available, especially for knowledge workers. On the other, the size of the working age population will shrink, driven by low fertility rates, hostility to immigration, outward migration from the UK, and persistently high levels of economic inactivity.
As with many longer-term challenges, however, the implications of an ageing population are likely to remain underappreciated. A year from now, the growing mismatch between a shrinking workforce and an unfunded state pension scheme supporting an expanding retired population is still unlikely to be receiving anything like the political attention it merits.
That said, pressure is likely to build for policymakers to look abroad for ideas. Italy’s recent approach to rethinking retirement and later-life participation is likely to attract increased interest, particularly as skills shortages persist, and pension costs continue to rise. We can expect growing debate around (17) incentives that encourage older workers to remain economically active for longer or re-enter the labour market in flexible ways. At the same time, the long-term sustainability of the state pension triple lock is likely to come under greater scrutiny, despite vocal opposition from some sections of the media. By the end of 2026, even the previously taboo idea of (18) means-testing elements of the state pension (more likely on income than assets) may begin to be discussed more openly.
In education, a continued shortage of entry-level graduate roles is likely to reduce domestic demand for university places, as more school leavers come to see student debt as an increasingly unattractive risk. As a result, (19) pressure is likely to grow to relax entry requirements for international students to offset declining domestic enrolment and sustain the financial viability of UK universities.
At the same time, (20) apprenticeships are expected to become significantly more popular, with their status rising alongside growing recognition of their relevance to the jobs of the future. As economies compete more intensely for the best people, highly skilled migration schemes will become a central focus of policy competition. (21) The immigration debate will become more nuanced, with greater emphasis on attracting and retaining highly skilled workers, even as irregular migration, particularly Channel crossings, remains a highly charged political issue.
Finally, the cultural backlash against so-called “woke” employers that gathered pace in 2025 is likely to have a chilling effect on how openly organisations communicate about diversity and inclusion, even where there is little substantive change in practice. Tackling gender inequality will, however, remain a priority. (22) Further progress will be seen in reducing the gender pay gap and more employers, both within and beyond the legal profession, will adopt more progressive approaches to parental leave, along the lines of Lewis Silkin’s ground-breaking equal parental leave policy.
Jobs
As AI and automation continue to reshape the world of work, demand for new skills will intensify, both in roles where employees work alongside AI, and in jobs that remain less susceptible to automation. At the same time, the characteristics employers prioritise when hiring, and employees value when choosing where to work, will continue to evolve.
As AI becomes more reliable and many of the traditional skills associated with knowledge jobs lose relative importance, employers are likely to place greater value on different skills sets: (23) attributes such as collegiality, oral communications, enthusiasm, resilience, empathy, imagination and curiosity are expected to become more important. These are harder to replicate through generative AI, and roles that depend on them are likely to prove more resistant to automation than purely technical or knowledge-based jobs. As these capabilities become more important, (24) employers are also likely to place greater emphasis on candidates’ experiences, rather than solely on academic credentials. Evidence of teamwork, resilience and communication, for example through team sports, hospitality work, or training in acting or performance, will be viewed as a stronger signal of a rounded candidate. Over time, academic grades and the prestige of the university attended are likely to diminish in importance as primary hiring filters.
Paradoxically, even though some roles might become scarcer, competition among employers for the best people is likely to intensify. Employers will need to deliver a competitive work proposition to attract and retain the best people. They will have to deliver on features such as (25) a sense of purpose and of belonging which many look for, especially younger generations.
(26) Hybrid working will be accepted and embraced as the future operating model in many workplaces. Efforts by employers to mandate a return to the office four or five days a week are likely to continue to collide with evidence that many workers value flexibility highly, sometimes enough to change sectors or employers and accept a drop in pay to secure it.
And, before you ask, a final very personal prediction: Wales will win the World Cup in the summer.