Employers Confront Shifting Workplace in 2026

BOSTON — Massachusetts employers are navigating a rapidly shifting workplace landscape shaped by economic uncertainty, new regulatory mandates, and evolving employee expectations, according to a report recently issued by Associated Industries of Massachusetts (AIM).

Employers participating in the 2026 AIM HR Practices survey listed employee morale and talent retention as their priorities for next year, while the percentage of companies integrating artificial intelligence (AI) into their human resources operations has nearly doubled, from 14% in 2024 to 26% in 2025.

“This year’s results show a workplace in transition: employee morale is slipping, AI adoption is accelerating, and health plan premiums are rising at the fastest rate in years. Together, these shifts are prompting organizations to rethink how they attract, support, and retain talent,” said Kyle Pardo, executive vice president of AIM HR Solutions, the human resources and training unit of AIM. “As workplaces navigate rapid regulatory change, economic uncertainty, and shifting workforce expectations, HR is increasingly responsible for creating environments where employees feel valued, supported, and connected.”

The survey collected insights from 216 employers from every sector of the Massachusetts economy.

Employers project wage and salary increases of 3.5% for 2026, down slightly from 3.6% for 2025 as the labor market continues to moderate. Unemployment in Massachusetts has ticked up from 4.2% in January to 4.7% currently.

The AIM survey also found that average health plan premiums will rise from 7.7% in 2025 to 9.7% in 2026. Meanwhile, the number of employers offering hybrid work schedules has dropped from 61% to 50%.

Pardo said 2025 began with a flurry of federal executive orders that reshaped the employment environment. These orders repealed affirmative action requirements except for veteran and disability reporting, increased scrutiny around I-9 compliance, and directed the recognition of only two genders. The Equal Employment Opportunity Commission also issued guidance on discrimination related to diversity, equity, and inclusion. Meanwhile, all 50 states introduced legislation governing AI in the workplace.