Employees staying in an organization is generally viewed as a positive sign. But what if staying longer does not necessarily mean they are engaged, committed or excited about their future there? This is where the idea of job hugging comes in. Job hugging refers to employees holding on to their current jobs, even when they may not be fully satisfied with their role or workplace. This behaviour can be influenced by economic uncertainty, fewer opportunities in the market, or concerns about changing jobs.

But the concerning question for CHROs shouldn’t be Why aren’t employees leaving, but why are employees staying? There is an important distinction between employees who stay because they see a future with the organization and those who stay because leaving feels like a risk. This makes job hugging more than a retention issue. It is an employee experience and workplace culture issue.

What’s the Real Problem With Job Hugging?

A stable headcount and positive employee tenure graph can sometimes hide the real employee experience. If employees are staying but becoming less engaged, less motivated or less willing to invest in discretionary effort, organizations may eventually see the impact through productivity, innovation, collaboration and customer experience. All of this will in turn affect business outcomes. This is particularly relevant in times like today when organizations are navigating changing Genz expectations, recession and rapid changes due to evolution of AI.

Great Place To Work India’s research provides an important context here. In 2026, 63% of companies continue to see a decline in discretionary effort. The 2025 India workplace study also found that 63% of companies experienced a decline in employees’ willingness to go above and beyond, compared with 55% in 2024 and 43% in 2023. The report associates this decline with experiences such as inadequate recognition, unclear expectations, low-trust leadership, unfavourable team dynamics and limited growth opportunities.

This brings us to an observation that retention alone does not tell the whole story. CHROs need to understand the quality of that retention. There are a few questions that can help distinguish healthy retention from job hugging.

Are employees:

  • Growing in their careers?
  • Receiving meaningful recognition?
  • Trusting their leaders?
  • Able to speak openly?
  • Seeing opportunities within the organization?
  • Willing to recommend the workplace?
  • Giving their best at work?

What Does Great Place To Work India Data Tell Us About Job Hugging?

While job hugging is a relatively new term, the underlying employee behaviours can be explored through workplace data. Great Place To Work India’s research looks beyond whether employees stay or leave. Through employee feedback, organizations can understand how people experience leadership, trust, fairness, recognition, growth and their everyday workplace.

Our job-switching research reveals a divided employee landscape. Overall, 38% of employees are looking for a new job, while 70% of employees considering a change expect to leave their current organization within the next 12 months. At the same time, 6% of employees say they would like to leave but do not feel they can. This 6% represents the closest direct indicator of job hugging in the Indian workforce.

This makes the Indian picture more nuanced: job hugging exists alongside substantial mobility intent. Some employees are actively considering a move, while another group remains in their jobs despite wanting to leave. For CHROs, both signals matter.

1. Staying is not the same as being committed

One of the most important things CHROs need to examine is employee commitment. An employee may remain with an organization for several years, but tenure alone does not tell you whether they are genuinely committed to the organization. This is where employee sentiment becomes important.

38% of employees are looking for a new job, while 6% would like to leave but do not feel they can. Among employees considering a change, 70% expect to leave within the next 12 months. This highlights why simply looking at who has stayed with the organization may not provide a complete picture of employee commitment.

2. Career growth can influence whether employees see a future at work

One possible signal of job hugging is an employee feeling that there are limited opportunities outside their current role but also limited opportunities within it. When employees cannot see a clear path forward, staying can become a default rather than a deliberate career choice. For CHROs, this makes career development an important part of the retention conversation.

Our research identifies limited growth opportunities as one of the experiences associated with declining discretionary effort. In addition, 72% of CHROs identify a mismatch between role expectations and actual work as a driver of early exits, with retention risk particularly visible among early-tenure individual contributors in specific functions.

The implication is not that every employee needs a promotion. Employees also need opportunities to learn, take on meaningful work, build capabilities and see how their career can evolve.

3. Leadership behaviour can determine how employees experience staying

Managers and leaders have a significant influence on everyday employee experience. An employee may tolerate a role they have outgrown when the relationship with their manager is strong. Conversely, even an attractive role can become difficult to sustain when employees do not feel respected, supported or heard.

Great Place To Work India’s Trust Index™ looks at employee experience across dimensions including Credibility, Respect, Fairness, Pride and Camaraderie. This means that retention strategies cannot sit entirely within compensation and benefits. The way leaders behave is part of the retention strategy.

Job Hugging vs. Healthy Employee Retention

Job hugging and employee retention may look similar, but there’s a thin line of difference between both. Understanding the difference will enable CHROs and HR leaders to take the right step at the right time.

Healthy RetentionJob Hugging
Employees see a future in the organizationEmployees stay because leaving feels risky
Employees have opportunities to learn and growEmployees feel stuck in their current role
Employees trust their leadersEmployees may remain despite dissatisfaction
Employees feel recognized and valuedEmployees may disengage quietly
Employees contribute beyond minimum expectationsEmployees may reduce discretionary effort
Employees choose to stayEmployees feel they have to stay

The challenge for CHROs is that both can look identical in a basic attrition report. The headcount has not changed. The employee is still on payroll. But the underlying employee experience can be very different.

Great Place To Work India’s data reinforces this distinction. While 38% of employees are looking for a new job, 6% specifically say they would like to leave but do not feel they can. At the same time, 63% of companies continue to report a decline in discretionary effort. Together, these signals show why retention and employee commitment need to be viewed separately.

What Can CHROs Do About Job Hugging?

The answer is not to push employees to leave or to create artificial retention programmes. Instead, CHROs can focus on creating the conditions that make employees want to stay and grow.

1. Look Beyond Attrition Numbers

Attrition tells you who has left. It does not necessarily tell you who is disengaging, who is considering leaving, or who is staying despite being dissatisfied. CHROs can combine retention data with employee listening to identify patterns across:

  • Engagement
  • Trust
  • Leadership
  • Recognition
  • Career growth
  • Wellbeing
  • Inclusion
  • Intent to stay

This gives leaders a more complete picture of retention. Great Place To Work India’s 2026 research shows that the employee experience is a critical part of understanding retention. Its Trust Index™ Survey captures employee experience through a globally validated employee survey.

2. Ask Employees Why They Stay

Most organizations spend considerable effort understanding why employees leave. But there is another question worth asking – What makes you want to stay here?

Employee listening can uncover the factors that employees value most and the areas that could eventually push them towards the exit. This is where Great Place To Work India’s employee surveys can help organizations move from assumptions to employee-led insights. Our research found that belonging and fair treatment are the leading retention influence – 40% of CHROs rank a workplace where people feel they belong and are treated fairly as the #1 factor influencing employee retention. This is followed by opportunities to grow and be appreciated at 26%, and strong manager relationships at 15%. The goal is not simply to collect feedback. It is to turn employee feedback into action.

3. Create Internal Opportunities Before Employees Look Outside

If employees cannot see their next opportunity inside the organization, they may eventually start looking outside it. CHROs can strengthen internal mobility through:

  • Career conversations
  • Skill development
  • Mentoring
  • Stretch assignments
  • Cross-functional opportunities
  • Internal job opportunities
  • Leadership development

This changes the conversation from how do we retain employees? to how do we help employees continue to grow here? This becomes particularly important when 72% of CHROs identify a mismatch between role expectations and actual work as a driver of early exits. The finding points to the importance of understanding whether employees’ current roles match what they expected and whether they can see a meaningful path forward within the organization.

4. Equip Managers to Have Better Career Conversations

Employees don’t experience an organization through HR policies alone. They experience it through their managers, teams and everyday interactions. Managers can play a critical role in helping employees understand how their current work connects to their longer-term career aspirations. Regular conversations can cover:

  • What motivates the employee?
  • What skills do they want to build?
  • What kind of work interests them?
  • Where do they want to grow?
  • What is currently holding them back?

These conversations can help identify disengagement before it becomes an attrition problem. Great Place To Work India’s retention research also places strong manager relationships among the key influences on retention, with 15% of CHROs identifying them as an important retention factor.

5. Make Recognition Part of the Everyday Employee Experience

Recognition can reinforce an employee’s sense that their contribution matters. Rather than relying only on annual rewards, organizations can encourage managers and peers to recognize meaningful contributions throughout the year.

Great Place To Work India’s research identifies recognition and appreciation as an important part of the retention equation. In the 2025 CHRO retention data, 26% of CHROs rank opportunities to grow and be appreciated among the leading factors influencing employee retention. The India workplace research also associates declining discretionary effort with inadequate recognition. For CHROs, recognition should therefore be viewed not just as an engagement initiative, but as part of the broader culture employees experience every day.

6. Strengthen Trust Instead of Focusing Only on Retention

Ultimately, the job-hugging conversation comes back to trust. Employees need to believe that their organization is a place where they can build a meaningful career, not simply a place where they can hold on to a job.

Great Place To Work India’s Trust Index provides a way for organizations to understand how employees experience the workplace through dimensions such as credibility, respect, fairness, pride and camaraderie. When leaders understand where trust is strong and where it needs attention, they can move from retention tactics to culture-building actions.

The India 2026 study shows the business relevance of this approach: India’s Best Workplaces report nearly 2X higher revenue per employee than the average Nifty 500 company. The study also finds that organizations with the strongest Caring and Inspiring leadership experiences outperform by 14% across key outcomes including retention, recruitment, customer service, agility and discretionary effort.

The CHRO Question: Are Employees Staying or Choosing to Stay?

Job hugging presents an important shift in how organizations think about retention. A low attrition rate can look encouraging on a dashboard. But it does not automatically tell you whether employees are engaged, growing or committed to the organization. The more useful question is, are our employees staying because they see a future here or because they don’t see a better option outside? The answer lies in employee data. By combining employee listening with insights on trust, leadership, recognition, growth and workplace experience, CHROs can understand what is really happening beneath the retention numbers. Because the goal of a great workplace isn’t simply to keep employees from leaving. It is to create a workplace where people have compelling reasons to stay, contribute and grow.

Frequently Asked Questions

What is job hugging?

Job hugging refers to employees holding on to their current jobs despite potentially feeling dissatisfied, disengaged or uncertain about their future in the role. External economic conditions and a lack of alternative opportunities can contribute to this behaviour.

Is job hugging the same as employee retention?

No, employee retention measures whether employees remain with an organization. Job hugging focuses on the reason behind staying. Employees can stay because they are engaged and see a future in the organization, or because they are hesitant to make a move.

Why should CHROs care about job hugging?

Job hugging can make traditional attrition numbers less informative. Employees may remain in the organization while experiencing low engagement, limited growth, or declining motivation. Employee listening can help CHROs identify these underlying experiences.

How can companies identify job hugging?

Organizations can look beyond attrition data and examine employee feedback, engagement, intent to stay, leadership experience, career growth, recognition, and trust. Combining these signals can provide a more complete picture of employee retention.

How can organizations reduce job hugging?

Organizations can focus on the factors that make employees want to stay strong in leadership, career development, recognition, meaningful work, trust, wellbeing, and opportunities to grow. Regular employee listening can help identify where action is needed.

For healthcare, pharmaceutical and biotechnology organizations, employee productivity has emerged as an important people priority.

Key HR Priorities in Healthcare

When asked to identify their top three HR priorities in healthcare for the year ahead, 62% of HR leaders surveyed by us, cited improving productivity and output per employee, making it the most frequently selected strategic priority. AI-led transformation followed at 54%, while future-ready capability building and retention of critical talent were each selected by 46% of respondents. Leadership effectiveness and change resilience (38%) and people analytics (23%) featured further down the list.

At first glance, this may indicate a shift away from employee-centric priorities. However, the findings suggest something different.

What is emerging is not a choice between people and performance. Rather, healthcare organizations are increasingly viewing productivity, capability-building, retention and AI adoption as interconnected levers. The focus is lesser on employee experience as a standalone outcome and more on employee experience as an enabler or input-driver of business performance.

The prominence of AI in the findings reinforces this shift. More than half of organizations identify AI-led transformation as a strategic priority, while strengthening workforce capabilities for an AI-enabled future ranks alongside talent retention as a critical focus area. At the same time, healthcare organizations are directing AI investments toward stronger data foundations, customer and service innovation, and redesigned ways of working.

Yet the pursuit of productivity is not without challenges.

AI as a Differentiator for the Best Versus the Rest

The study reveals that AI is already creating cultural and workforce tensions. Nearly half (46%) of HR leaders report that high performers are leveraging AI to pull further ahead, creating a widening performance gap within teams. Others point to concerns around trust in AI-generated outputs and resistance from employees who see AI as a threat to established expertise.

The findings also suggest that managers may be among the least prepared stakeholders in this transition. While organizations are investing in technology and rethinking work, managerial expectations remain largely undefined. Only a minority report having adapted manager expectations, while 38% acknowledge that expectations need to evolve but have not yet clearly defined how. Another 15% say expectations have shifted informally, leaving managers to navigate the changes on their own. Notably, none of the organizations surveyed reported having formally updated and clearly communicated manager expectations in response to AI.

Role of Managers in Driving Employee Experience

This gap matters because managers remain one of the strongest drivers of organizational outcomes. Elsewhere in the study, relationship with the direct manager emerged as the most effective lever for reducing attrition and improving retention, cited by 85% of respondents.

Taken together, the findings point to a broader evolution of the healthcare sector. Faced with rising cost pressures, talent shortages, increasing service expectations and rapid advances in AI, organizations are elevating productivity from an operational metric to a strategic people agenda.

The question is no longer whether organizations should focus on productivity. The real challenge is how they do so.

Drivers of Success for Healthcare Organizations

The organizations that succeed will be those that view productivity not as a mandate to do more with less, but as an outcome of equipping people with the right skills, technology, data and managerial support. In that sense, the future belongs not to organizations that choose between performance and people, but to those that recognise that sustainable productivity is ultimately built through people.

Frequently Asked Questions

What is the top HR priority for pharmaceutical and healthcare organizations this year?

Improving productivity and output per employee are the leading priorities, cited by 62% of HR leaders in healthcare, pharma, and biotech organizations – ahead of AI-led transformation and talent retention.

How are healthcare organizations balancing productivity with employee experience?

Rather than treating productivity and people-centricity as contrasting goals, leading organizations are linking productivity to capability-building, retention, and AI adoption – treating employee experience as an enabler of business performance, not a separate initiative.

How prepared are managers for AI-driven changes in the workplace?

Managers appear to be among the least prepared stakeholders, where only a minority have adapted expectations, 38% say expectations need to change but haven’t been defined, and none have formally communicated updated expectations.

What drives retention amongst pharmaceutical & healthcare employees?

A strong relationship with their direct manager is the number one factor in driving retention, according to 85% of HR leaders surveyed.

Human Resource (HR) management is an essential part of a business, as it helps manage people, who are among the most important resources. However, most businesses group the HR function with administrative functions rather than a strategic one.  

Today, businesses have recognized that HR plays a crucial role and the strategic value it brings to the business. At Great Place to Work®, our services enable organizations to understand how the HR function will influence the company’s growth trajectory. 

What Is a Broad Outlook of Overall HR Functions in an Organization?

HR Recruitment
Employee Retention
Talent Development
Administrative, wellbeing, and compliance

Which HR Functions Impact Business Outcomes? 

Having defined the overall functions of an HR department, let’s dive into the functions that specifically impact business outcomes. Here are some of the main HR-related responsibilities that impact business outcomes:

HR Responsibility What the Human Resource Department Does and How It Helps
Recruitment The HR department undertakes this process by talking to various stakeholders and understanding their needs. With smart recruitment, HR ensures that personnel with the right skill set and attitude join the company, keeping its operations running seamlessly.
Training and development As part of their responsibilities, the HR department understands employees’ changing needs and creates L&D programs to help them scale. With the right training, employees are prepared to meet challenges, and the company remains compliant with the local laws and regulations.
Employee engagement programs People need to be seen, heard, and appreciated in a work environment to continue performing well. The HR department identifies employees’ needs, designs engagement programs, and implements them to keep them motivated and engaged.
Manpower planning Planning for manpower requires a balance between people shortage and over-hiring to ensure continued operations and cost control. The HR department plans for manpower by understanding the business’s cyclical nature and ensuring the required staff is always available.
Planning and strategy contributions Today, decisions are not based on intuition or gut instinct, especially when it comes to human resources. The HR department maintains people-related metrics to support the leadership in strategic decision-making.

 

Below is a detailed description of each of these responsibilities and their impact on the company’s bottom line.

Strategic acquisition of talent 

The HR department plays a pivotal role in this aspect. They use their assessment skills to glean the skills and attitude of prospective candidates to ensure they fit the role. It is a role that involves keen observation, bargaining skills, and a deep understanding of business impact.

Impact on bottom line:  

  • High-quality hires ensure that the business remains productive and profitable.  
  • The company saves on hiring costs and can serve customers seamlessly. 
  • Having the right talent cuts down on further hiring costs due to referrals and better retention 

Learning and Development  

The HR department is responsible for identifying gaps in employees’ skill sets and creating programs to fill them. The right learning and development programs enable employees to upskill and help the company reduce hiring costs by filling the skill gap. Moreover, an excellent L&D program motivates existing employees to perform better.  

Impact on bottom line: 

  • Timely, compliance-driven training programs help protect data, improve skills, and ensure compliance with local laws. 
  • Employees are better prepared to deal with emerging technologies, such as AI, which helps the business stay competitive. 

Engagement, motivation, and retention 

In today’s hybrid work environment, with teams working across geographies, they must be engaged, motivated, and encouraged to do their best. The HR department provides the much-needed engagement to ensure that employees develop a sense of belonging and stay motivated. Employee recognition helps build a strong culture of appreciation. 

Impact on bottom line: 

  • Employee engagement results directly in better customer satisfaction, increasing customer lifetime value (CLV), and repeat business. 

Continuous workforce planning 

Many businesses today have cycles in which they need more employees and face a slack season when they can function with a skeleton team. It falls upon the HR team to plan for such situations, creating a mix that involves full-time, part-time, and gig workers. It involves a deep understanding of the business model, collaboration with leaders, and a strategic approach to workforce planning.  

Impact on bottom line: 

  • Ensures smooth operations across various seasons and cycles, keeping business expenses and revenues balanced. 
  • Proactive planning for workforce fluctuations future-proofs the business and enables it to compete. 

Data-driven decision-making 

Today, HR acts as the keeper of employee-related metrics, ensuring leadership makes data-driven decisions by identifying trends to plan for the future. Factors such as productivity, retention, hiring costs, and technology adoption costs can be considered when making decisions. 

Impact on bottom line: 

  • It becomes easier to balance the workforce by using data such as revenue per employee, the cost of an outside hire vs. an internal promotion, etc. 
  • Data-driven decision-making removes personal biases and ensures decisions for the best business outcomes.

How to Leverage the HR Department Strategically Going Forward 

It is a given that with the changing work scenario, HR will continue to play a strategic role in the growth and profitability of businesses. It is time to review the HR team and ensure they have the technology, tools, and leadership buy-in to enable their strategic contributions. Here are some steps to ensure that the business benefits from the HR department’s strategic inputs: 

  • Implement a culture of growth, learning, and meritocracy from the top down 
  • Enable frequent checks of the employees’ pulse to understand the way forward 
  • Invest in technology to ensure data-driven inputs from the HR department 
  • Understand training needs and enable the HR departments to create training material 

At Great Place To Work, the team helps by conducting impartial employee surveys, providing culture consulting services, and offering tailored solutions.  

Want to know how to take this forward? Click here to connect with our team. 

Frequently Asked Questions

What is the role of HR in ensuring business continuity? 

  1.  

HR helps business continuity by recruiting, training, retaining, and developing employees at all levels. HR can also support business continuity by ensuring the business meets compliance requirements set by local law, especially when operating in different countries. 

How does HR contribute to controlling costs? 

  1.  

HR can help a business cut costs at various levels. One is to hire the right people who will stay and grow with the business to cut hiring costs. Another way is to set a people-related budget for each department and ensure they stay within the limit. HR also regulates administrative, travel, and other related costs. 

Why is it important to empower HR to contribute to business? 

  1.  

The HR department manages one of the most crucial and dynamic resources of the business – employees. And when the HR department is empowered, it can do a good job of hiring, training, and retaining the necessary talent to keep the business running profitably. 

Can HR help businesses of all sizes? 

  1.  

Yes, HR is an important function for businesses of all sizes, though the way an HR department operates will vary by business type. In smaller companies, HR tends to function as administration and even finance, depending on the business. 

Which departments can HR help directly? 

  1.  

HR helps almost all departments directly, whether through hiring, ensuring discipline, controlling costs, or L&D. HR acts as a hub in most businesses by providing a structure for employees to work within.

 

Organizations are currently experiencing a recent shift. Leaders are quickly implementing digital transformation roadmaps, automation trials, and AI tools. There has never been a better chance to create workplaces that are genuinely prepared for the future since systems are changing and capabilities are growing. What successful cultures look like in 2026 will be determined by the CHROs who make the most of this opportunity and match company goals with people strategy.

The role of the CHRO has never been more consequential. The choices HR directors make this year will determine whether their companies create cultures that draw in, nurture, and retain top talent for years to come as AI transforms job roles, generational changes redefine workplace expectations, and the boundary between work and wellbeing continues to change.

This piece is not about theoretical frameworks. It is about the real priorities that CHROs across industries need to act on today, grounded in research from Great Place To Work® India’s Workplace Culture Outlook 2026 report. If you are looking for clarity on where to focus your energy and resources this year, this blog will give you clarity.

Download Workplace Culture Outlook 2026 report

What is an HR Strategy? 

An HR strategy is a plan that an organization employs to connect its people practices with its overall business objectives. It discusses how a company finds talent, nurtures it, keeps it, and fosters an environment where employees can regularly give their best. In contrast to daily HR operations, which concentrate on hiring workflows, payroll, and compliance, an HR strategy is even broader and covers important issues. What type of culture are we creating? What skills are we going to need in the future? How can we ensure that the practices of our employees align with the direction of our company?

Workforce planning, leadership development, employee experience, and DEIB (Diversity, Equity, Inclusion, and Belonging) are all included in a well-designed HR strategy. When done correctly, it serves as a bridge between the business goals and the real experiences of its employees. That connection is more important than ever in 2026. Businesses that create the link between strategy and real-world experience are the ones that create workplaces where employees truly want to show up, contribute, and develop. CHROs are in the best position to take the lead on this actual opportunity.  

How to Build a Future-Ready HR Strategy in 2026? 

Building a future-ready HR strategy does not entail adding new programs to an already packed HR calendar. It is about making more informed decisions and focusing on what would truly benefit people and organizations. Here are a few priorities that must be included in a future-ready HR strategy: 

1. Address Career Anxiety with Clarity and Confidence 

One of the most essential things CHROs can do right now is provide employees with a clear, confident response to a question that everyone is thinking about: what does my future look like in this organization, and what role does AI play in it? 

Also Read: Human Rеsourcеs Activitiеs for Employееs in 2026

According to Great Place To Work India’s report, 6 out of 10 organizations are now reporting a decline in employees eager to go the extra mile, a trend that has been accumulating for three years. The key driver is career anxiety, which stems from ambiguous expectations, rapid reskilling demands, and uncertainty about the future of specific professions.  

The good news is that clarity is one of the most effective tools accessible to HR professionals. Employees’ confidence and engagement increase significantly when they understand how their jobs are growing, what skills the business will help them develop, and what growth possibilities are available. CHROs should invest in structured listening tools such as pulse surveys, town halls, and skip-level talks to identify areas of doubt and then respond transparently and purposefully. 

Organizations that rapidly explain their AI adoption roadmap, coupled with a corresponding people-readiness plan, are already witnessing increased engagement. Employees do not fear change if they feel supported during this transformation. That is the opportunity HR executives have right now: to replace uncertainty with direction, fear with genuine confidence in the future.  

CHROs can actively work to restore a sense of forward momentum in addition to listening. This could take the form of creating “ask leadership anything” forums where employees can voice concerns and get frank, helpful responses, holding team-level discussions about how work is changing and what that means for growth, or publishing career pathway guides that include AI-augmented roles. Employees put out their best effort when they feel heard, recognized, and guided.  

2. Build AI-Enabled Career Pathways That Inspire, Not Intimidate 

Careers with AI capabilities are no longer a benefit in 2026. They serve as a standard expectation for all industries. Individuals are far more likely to put in their best effort at work if they feel ready to work with AI technologies; their jobs have been properly repositioned in this new context, and they can see a feasible growth path ahead of them. 

This means that CHROs need to provide relevant reskilling pathways rather than just generic upskilling initiatives. These are career paths that are directly related to an employee’s particular position, industry, and the organization’s future direction over the next two to three years. The study found that when compared to peers, Best Workplaces™ report 7% higher experience scores on career progression, team chemistry, and expectations clarity. These three are the main factors that decide whether professionals will put in their best effort or not.  

The best strategy blends visible internal mobility with structured learning. Employees’ enthusiasm changes when they witness colleagues advance within the company, when they see their own abilities growing in ways that feel pertinent and appreciated, and when leadership communicates career opportunities with precision rather than ambiguous promises. When people think the company is investing in them, they make investments. 

The way that job descriptions are being modified to reflect the AI-augmented nature of employment should also be examined by CHROs. Jobs that formerly required manual data processing increasingly call for strategic thought, judgment, and interpretation. It sends a strong message that the company views its employees as collaborators in development rather than expenses to be controlled when that evolution is made clear, and training is developed around it. One of the most exciting changes an HR executive can make is to reframe employees as strategic participants using AI rather than as recipients of AI.  

3. Embed Wellness Into Everyday Leadership Behavior 

Many organizations have established excellent wellness initiatives, including employee assistance platforms, mental health days, mindfulness resources, and physical health subsidies. These are truly worthwhile. However, research repeatedly demonstrates that an employee’s rapport with their immediate boss has a greater influence on their sense of well-being at work than any policy.

Also Read: HR Policies That Build a Stronger Organization

According to Great Place To Work, leaders who listen carefully, pose insightful questions, and relate their team’s work to a larger goal increase employee retention by 3.7 times. That is a substantial return for a behavior that requires only sincere care and attention, with no extra funding.  

This significantly reframes the wellness goal for CHROs. The objective is to create a management culture where health is evident in day-to-day interactions rather than merely putting policies in place. This entails frequent check-ins that go beyond project status updates, timely and intimate moments of acknowledgment, and discussions where staff members feel truly heard rather than controlled. 

A greater investment in manager enablement is the practical impact for HR strategy. One of the most effective things a CHRO can do is train managers to have better discussions, identify indicators of stress or disengagement, and foster psychological safety within their teams. When managers do this correctly, health is integrated into the culture instead than being a supplemental initiative.  

It is also worth recognizing the compounding effect that strong manager-employee relationships have across the business. Teams with high-quality management relationships report better collaboration, stronger innovation, and lower attrition. Wellness, in this light is not just a people issue. It is a performance issue, and investing in it at the management level pays returns across every part of the organization. 

4. Design Flexibility Around Autonomy and Real Choice 

Flexibility has moved from being a competitive perk to a baseline expectation for most of today’s workforce, particularly among Gen Z employees and gig colleagues who are reshaping what work norms look like across industries. In 2026, the question is no longer whether to offer flexibility. The more meaningful question is how to design flexibility that genuinely serves people across different life stages, work styles, and personal circumstances. 

Employees today are less focused on where they work and more focused on how much control they have over their work, their growth, and their time. That distinction matters for CHROs. A flexible work policy that only addresses location without addressing autonomy over how work gets structured and delivered will miss the deeper need that employees are expressing. 

The report highlights a notable paradox worth paying attention to: while millennials report high access to learning and resources, 1 in 5 still does not experience job security, particularly in sectors like IT and Biotech. Access to opportunity and psychological security are not the same thing. An effective HR strategy in 2026 addresses both, making sure that the pathways to growth are genuinely accessible and that employees feel stable enough to pursue them confidently. 

The leadership challenge here is one of the thoughtful balances. CHROs need to help their organizations design flexibility frameworks that are fair across different functions and seniority levels, that support accountability without surveillance, and that allow for personalization without inadvertently creating inequity. When flexibility is designed well, it becomes one of the most powerful retention and engagement tools available. Employees who feel trusted to manage their own work are more likely to bring their full capabilities to it. 

5. Elevate DEIB from a Commitment to a Measurable Culture Priority 

In recent years, DEIB has been a strategic focus for businesses, and in 2026, the direction of progress is becoming evident. Organizations that have moved from considering DEIB as a stand-alone project to integrating it into daily culture assessments, people management, and leadership development are the ones that are making progress. 

According to a research carried out in India by Great Place to Work, 6 out of 10 CHROs think that the best method to progress DEIB in reality is to create inclusive leadership capabilities. This is a significant and inspiring realization. Inclusion manifests and expands in everyday leadership behavior: who is invited to speak in a meeting, who gets sponsored for a stretch assignment, who feels safe to speak up, and who feels genuinely valued by their team.  

The data also reveals significant room for growth and for celebrating progress where it is happening. Only 45% of CHROs feel there is scope to formally embed DEIB into their organization’s core values and principles. 2 out of 3 report that less than a quarter of their leadership teams include individuals from historically excluded groups. And only 5 out of 10 CHROs are tracking retention across diverse employee groups, which means most organizations have an important opportunity to build better measurement into their DEIB strategy. 

For CHROs building strategy in 2026, the path forward is to close the gap between intent and accountability with confidence and optimism. This means setting specific inclusion goals for leadership teams, building DEIB metrics into manager performance expectations, creating safe and structured channels for employee feedback on inclusion experiences, and regularly reviewing hiring, promotion, and retention data through a DEIB lens. Organizations that do this well do not just check out a compliance box. They build cultures where diverse thinking drives genuine innovation and lasting competitive advantage. 

Common Challenges and How to Overcome Them 

Here are a few common challenges that CHROs are facing, along with the steps to overcome them: 

Challenge 1: Rebuilding Discretionary Effort Across Teams 

According to research from Great Place To Work India, organizations where all employees have a favorable work environment report 9% more discretionary effort than their peers. This effort is driven by trust, clarity, and acknowledgment. CHROs should conduct audits to determine whether senior leadership is actively fostering trust through open communication, whether managers set expectations that make employees feel capable, and whether recognition is timely and meaningful. People naturally contribute more when these foundations are secure.  

Challenge 2: Investing in Manager Capability as a Strategic Priority 

Manager development is frequently ignored, despite the fact that everyday interactions between managers are the most important factor in determining whether team culture is developed or not. By creating structured coaching programs, integrating recognition into management routines, and making managers responsible for the caliber of their employees’ experiences, the most progressive CHROs are establishing it as a fundamental business investment. Culture is evident everywhere, every day, when managers lead well.  

Challenge 3: Making AI Adoption a Positive, Human-Centered Transition 

The CHROs that successfully lead AI transitions are those who combine technology rollouts with a compelling human readiness narrative, assisting staff in viewing AI as a tool that enhances rather than replaces their creativity and judgment. The practical approaches are simple: openly communicate the AI roadmap, provide role-specific reskilling, and establish internal forums where colleagues can discuss their successful use of new tools. Businesses that take this approach are already witnessing increased creativity and engagement.  

Challenge 4: Making Inclusion Real at Every Level of the Organization 

The genuine cultural effort takes place in bridging the most prevalent DEIB gap between frontline manager behavior and senior leadership commitment. CHROs should establish peer accountability within teams, make inclusion a stated expectation in leadership development programs, and make sure DEIB measures are discussed in regular business meetings rather than being saved for yearly reports. At the leadership table, inclusion data receives the attention and urgency it merits when it is presented alongside performance statistics.  

Conclusion 

The organizations that lead with trust are the ones that will determine what success looks like in 2026. Not just technology, not only the effectiveness of the method – it is about trust. This means being open and honest with employees about how their roles and careers are changing, giving managers the tools they need to foster real human connections in the workplace, creating flexibility that respects people’s personal lives, and incorporating accountability into inclusion commitments to make progress quantifiable and apparent. 

This is well-supported by research from Great Place To Work India, which shows that companies with strong levels of trust consistently report higher levels of discretionary effort, better retention, and more resilient cultures. These are competitive advantages that directly affect an organization’s reputation and business outcomes.  

In 2026, CHROs will have a lot of real opportunities. The framework for creating outstanding workplace cultures is in place. Tools, data, and organizational awareness have never been more aligned. Going further into the most important areas – clarity, trust, inclusivity, and leadership capacity is currently the top focus. Everything else will follow if you get those properly.  

Frequently Asked Questions 

How can CHROs prepare for AI-driven team? 

By focusing on reskilling, transparent communication, and building a learning culture where employees feel confident using AI tools. 

How will technology impact HR strategies in 2026? 

Technology will shift HR toward strategic priorities like culture, leadership, and employee experience, supported by AI-driven insights and analytics. 

What are the biggest HR challenges expected in 2026? 

Key challenges include managing career uncertainty due to AI, leading hybrid work cultures, and ensuring consistent, measurable DEIB outcomes. 

What role does employee experience play in future HR strategies? 

Employee experience will be central, directly influencing retention, engagement, productivity, and overall employer brand. 

What are strategic HR initiatives? 

They are structured, outcome-focused programs aligned with business goals, such as AI reskilling, leadership development, flexible work models, and DEIB initiatives. 

 

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