The new year is three weeks away, which means you’re probably juggling year-end tasks: finalizing budgets, reconciling payroll, prepping for benefits enrollment. Here’s what most HR leaders already know but don’t always have time to act on: the decisions you make before December 31 will define your entire 2026.

This year, the stakes are higher. Recent research shows that while growth and market expansion top the priority list for 2026, about 60% of CHROs point to economic uncertainty as their biggest external concern. 

At the same time, leadership development has jumped to the number one HR priority, with innovation rising sharply in rank as organizations pivot from pure cost control to building resilience and capability.

This isn’t about resolutions. It’s about making five concrete strategic decisions before year-end that position your organization for what 2026 will actually demand: AI integration, skills transformation, leadership capacity, employee retention, and smarter cost management.

Let’s walk through what needs to be finalized in the next few weeks so January feels less like controlled chaos and more like strategic momentum.

---

---

1. Define Your AI and HR Technology Roadmap

Here’s a stat that should get your attention: about one-third of organizations expect hiring to be handled entirely by AI in 2026, and more than 40% of HR leaders list upgrading HR tech as a top priority this year.

The question isn’t whether AI will transform HR; it’s whether you’ll be ready when it does. Before year-end, you need to decide which HR processes will use AI in 2026 and what guardrails will govern that use. This isn’t about jumping on every AI trend; it’s about strategically choosing where automation creates real value without introducing new risks.

Here’s what to finalize before December 31:

Map your AI use cases. Where will AI actually help? Common starting points include resume screening, candidate sourcing, chatbot-driven employee questions, internal mobility recommendations, and predictive analytics for retention risk. Don’t try to do everything at once. Pick two or three high-impact areas where AI can demonstrably reduce administrative burden or improve decision quality.

Establish governance and guardrails. As industry analysts note, “responsible AI integration” means having clear policies around data privacy, bias monitoring, and human oversight before you deploy tools at scale. Define who reviews AI-generated decisions, how you’ll audit for fairness, and what happens when the system gets something wrong.

Commit to your core system upgrades. If your HR tech stack is still fragmented across multiple platforms, now is the time to plan consolidation. Disconnected systems mean data errors, compliance gaps, and hours wasted on manual reconciliation. A unified platform for payroll, benefits, time tracking, performance management, and analytics isn’t a luxury; it’s the foundation that makes everything else work.

Enable employee self-service. The best HR technology removes you from routine transactions entirely. Employees should be able to access pay stubs, update information, request time off, and get answers to common questions without submitting tickets. Your 2026 roadmap should include concrete milestones for rolling out self-service capabilities that scale as you grow.

The payoff: time reclaimed from administration, better data for decision-making, and an HR function that can finally focus on strategy instead of constantly firefighting operational issues.

2. Build Your Skills-Based Workforce Plan

Traditional job descriptions and rigid role definitions won’t survive 2026. Organizations are rapidly shifting to skills-based hiring and workforce architecture, recognizing that the skills your team needs today will be different from what you need six months from now.

Recent HR research identifies skills-based workforce planning as both a top recruiting priority and a critical capability gap for most organizations. If you’re still hiring based solely on years of experience and job titles, you’re already behind.

Here’s what to finalize before year-end:

Identify your critical skills gaps. Map the skills your business will need in 2026 against what your current workforce actually has. This isn’t about vague competencies; it’s about specific technical, leadership, and adaptive skills that drive performance in your industry. Which gaps will you close through hiring? Which through reskilling existing employees?

Define your reskilling programs. As the McLean & Company 2026 HR Trends Report notes, there’s a “growing gap between organizational change and leadership capacity.” Your workforce architecture needs to include concrete plans for upskilling current employees, not just recruiting new ones. What training will launch in Q1 2026? Who owns delivery? How will you measure effectiveness?

Establish clear job architecture. Skills-based hiring requires consistent frameworks for how roles are defined, how skills translate to compensation, and how employees can move internally based on capabilities rather than tenure. This foundation supports both external recruiting and internal mobility, making your organization more agile and your employees more engaged.

Plan your recruiting infrastructure. If you need specialized skills fast, your recruiting process needs to match that urgency. Consider whether your internal team has the bandwidth and industry expertise to fill critical roles in the timeframe your business needs, or whether dedicated recruiting support makes more sense.

The reality: a workforce that adapts as your business needs change, internal talent development that reduces external hiring costs, and employees who see clear paths for growth within your organization.

3. Strengthen Leadership Capacity for Continuous Change

Leadership development ranks as the number one HR priority for 2026, and for good reason. Your mid-level managers are being asked to lead through AI adoption, skills transformation, economic uncertainty, and constant organizational change. Many of them weren’t trained for this, and the gap shows.

As workforce experts note, “there’s a growing gap between organizational change and leadership capacity.” You can have the best strategy in the world, but if your leaders can’t execute it while keeping their teams engaged, you won’t get results.

Before December 31, finalize these decisions:

Select your 2026 leadership development focus. You can’t address every leadership skill gap at once. Pick the two or three most critical capabilities your organization needs from managers in 2026. Common priorities include coaching through change, making data-informed decisions, fostering innovation, and maintaining team engagement during periods of uncertainty and transformation.

Invest in your middle managers. Research consistently shows that middle managers are the make-or-break layer for change initiatives, yet they often receive the least support. Your 2026 plan should include structured development programs specifically for this group, not just senior executive coaching.

Define leadership expectations around culture. Your leaders need clarity on what’s expected of them beyond hitting operational metrics. How should they approach coaching? What does “fostering innovation” actually mean in daily practice? How do you want them to handle team concerns about AI, restructuring, or workload?

Combat change fatigue proactively. Continuous transformation is exhausting. Build in mechanisms for leaders to recognize and address burnout in their teams before it becomes a retention crisis. This might include regular pulse surveys, structured one-on-ones focused on wellbeing, or simply permission to push back when change timelines are unrealistic.

The outcome: leaders who can actually execute your 2026 strategy, teams that stay engaged through change rather than burning out, and managers who develop their people instead of just managing tasks.

4. Lock In Your Employee Experience and Retention Strategy

Innovation, retention, and employee experience sit among the top five HR priorities for 2026, and they’re interconnected. You can’t innovate with a constantly churning workforce, and you can’t retain talent without deliberately designing experiences that make people want to stay.

The competition for talent isn’t slowing down, and your employee experience strategy can’t just be “we offer competitive pay.” Research shows that flexibility, wellbeing offerings, and clear career development are now table stakes for retention, not perks.

Here’s what to finalize before year-end:

Define your 2026 retention metrics. What will you actually measure? Turnover rate is a lagging indicator; by the time it shows up, you’ve already lost people. Consider leading indicators like engagement scores, internal mobility rates, manager effectiveness ratings, and participation in development programs. Pick three to five metrics that will signal retention problems early enough to fix them.

Clarify your flexibility stance. Remote work, hybrid schedules, and scheduling autonomy aren’t going away as retention differentiators. You need a clear, documented position on what flexibility means at your organization. Don’t leave it to individual managers to make up their own rules; that creates inconsistency and resentment.

Audit your wellbeing offerings. Employee wellbeing isn’t just about health insurance anymore. Mental health support, financial wellness programs, and work-life integration support are increasingly expected. What do you currently offer? What are employees actually using? Where are the gaps between what you provide and what your workforce needs?

Map career development pathways. One of the strongest retention drivers is employees seeing a future at your organization. This ties directly back to your skills-based workforce architecture. Can employees see clear paths for growth? Do managers have structured conversations about development? Are there actual opportunities for internal mobility, or do people have to leave to advance?

Plan your engagement pulse system. Don’t wait for annual surveys to learn that half your team is burned out. Implement regular, lightweight check-ins that give you real-time visibility into how people are doing. Act on what you learn, and close the loop by telling employees what changed based on their feedback.

The result: a workforce that chooses to stay because you’ve deliberately built an environment where they can thrive, not just survive. Lower turnover costs, stronger institutional knowledge, and teams that actually want to come to work.

5. Finalize Your Benefits Strategy and Labor Cost Plan

Healthcare costs aren’t slowing down, economic pressure remains high, and about 60% of CHROs cite economic uncertainty as their biggest external concern for 2026. At the same time, you’re competing for talent in a market where benefits and compensation are make-or-break factors for recruitment and retention.

This creates a genuine tension: you need competitive offerings to attract and keep people, but you also need to manage costs that can quickly spiral out of control. The companies that navigate this well make deliberate choices about where to invest and where to optimize.

Before December 31, finalize these decisions:

Set your 2026 compensation strategy. Where will you position yourself in the market? What’s your philosophy on base pay versus variable compensation? Are you comfortable with geographic pay differences for remote workers, or will you maintain location-agnostic bands? These decisions affect both your budget and your talent competitiveness, so make them deliberately rather than reactively.

Audit and adjust your benefits portfolio. Review your current offerings against rising healthcare costs and employee needs. Recent benefits research notes that many organizations will face a “benefits crunch” in 2026, with pressure to maintain competitive offerings while costs increase. Where can you add value without adding massive expense? Mental health support, financial wellness programs, and flexible work arrangements often deliver high perceived value at manageable cost.

Plan your open enrollment strategy now. Yes, enrollment is nine months away. But the planning happens now. If you wait until September 2026 to think about enrollment, you’re too late. Lock in your vendor relationships, finalize plan designs, and map your communication timeline before year-end so Q3 isn’t a scramble.

Define your workforce mix strategy. What’s your approach to full-time versus contract workers, in-house versus outsourced functions, and geographic distribution? Strategic workforce planning requires deliberate decisions about each of these factors. Each choice has cost implications, compliance considerations, and cultural impacts. Document your strategy so everyone’s operating from the same playbook.

Build your 2026 compliance calendar. Payroll taxes, benefits reporting, ACA compliance, and multi-state employment all come with hard deadlines and real penalties for missing them. Create a master calendar with every deadline, assign clear ownership, and set early warnings. Compliance isn’t exciting, but it’s expensive when you get it wrong.

Establish your HR ROI metrics. Here’s the strategic piece many organizations miss: you need to prove the value of everything you’re doing. Define now how you’ll measure return on HR tech investments, recruiting spend, training programs, and retention initiatives. These metrics inform your 2027 budget conversations, and waiting until next November to consider them means you won’t have the necessary data.

The outcome: a benefits and cost structure that’s both competitive for talent and sustainable for your business, with compliance buttoned up and clear metrics proving HR’s strategic value.

The Strategic Shift from Cost Control to Capability Building

Here’s what the research tells us about 2026: organizations are pivoting from pure cost control to building resilience and capability. Innovation has jumped sharply in priority rank. Leadership development tops the HR agenda. Skills-based workforce planning is now mission-critical, not optional.

The companies that will thrive in 2026 aren’t the ones trying to do HR the way they did in 2020. They’re the ones making deliberate strategic choices about where to invest, where to transform, and how to build sustainable competitive advantage through their people.

These five decisions won’t make themselves, and they get harder the longer you wait:

1. Your AI and HR technology roadmap
2. Your skills-based workforce architecture
3. Your leadership development priorities
4. Your employee experience and retention strategy
5. Your benefits and labor cost plan

The difference between a reactive 2026 and a strategic one comes down to the planning you do before December 31, 2025.

You already know what needs attention. Technology that could work harder for you. Skills gaps that will widen if you don’t address them now. Leaders who need support to navigate continuous change. Employee experience factors that directly affect retention. Benefits costs and compliance requirements that won’t manage themselves.

The question is whether you’ll address them proactively with a clear strategy, or reactively when they become crises.

---

---

How We Help Organizations Plan for 2026

At MP-Wired for HR, we work with organizations navigating exactly these decisions. We connect the dots between business goals, HR strategy, and HR technology with a focus on results.

Our approach integrates three areas that most organizations treat separately:

Technology: Industry-standard HCM platform with payroll, benefits, time tracking, performance management, and analytics in a single system. No disconnected tools, no manual reconciliation, no data errors from system handoffs.

HR Services: Strategic consulting, compliance support, policy development, and proactive guidance from SHRM-certified experts who understand your industry. We help you think through workforce planning, organizational development, and the complex HR questions that don’t have easy answers.

Recruiting: Dedicated specialists who can handle some or all of your recruiting process, with an average time-to-fill under 30 days. We align hiring with your business goals and deliver qualified candidates faster than internal teams juggling ten other priorities.

This isn’t about selling you more tools. It’s about building an HR infrastructure that can scale with your growth, adapt as your needs change, and free your team to focus on strategic initiatives instead of constant firefighting.

If you need help finalizing any of these five decisions, let’s talk. Your 2026 planning doesn’t have to be overwhelming.

Schedule a consultation