Dive Brief:
- Sixty-two percent of HR leaders said their industry was facing a self-inflicted talent crisis and attributed the problem to outdated hiring practices, according to the sixth annual HR trends report from human capital management tech company Isolved.
- In the report, 48% of HR leaders also said they’re dealing with a self-inflicted skills crisis due to a lack of agility, meaning they’re not adapting fast enough to technology and industry shifts. They added that they felt this challenge “a bit more acutely than the talent crisis.”
- Meanwhile, 65% of HR leaders said artificial intelligence helped them work more efficiently, as teams increasingly use AI-powered assistants to navigate common questions about PTO, holidays and benefits eligibility. More than half of HR leaders said they spend four or more hours per day answering redundant questions.
Dive Insight:
The report focused on how HR leaders viewed their roles within the current labor market, and the results were complicated. Sixty five percent of HR leaders said power is shifting back to employers, and while they understand they don’t have full control over labor fluctuations, they know they’re responsible for upskilling their employees, the report said.
Thus, due to the problems listed in the Isolved report, employers may be losing access to both internal and external talent.
“It seems unlikely we’re in an employer’s market if employers can’t find a way to match talent with their open positions,” Heidi Barnett, president of talent acquisition at Isolved, said in a statement. “HR leaders know there are plenty of qualified candidates out there, but they’re losing them during the hiring process.”
Barnett cited recent research that showed job-hunting intent will be up year over year in the first half of 2026 but said many companies “will miss this influx of job-seeking talent by posting roles with unclear requirements and inflated expectations for skills and experience.”
While 69% of HR leaders said they’re leveraging AI, and another 64% said they believed it positively affected their department — especially in payroll and recruitment — 60% of employees said they’ve been affected by payroll errors, per the report. AI adoption for benefits administration is lower than for other use cases, and 34% of HR professionals said they’re planning to leverage it in the future.
“HR is unsure how to go back to the drawing board and build a recruitment strategy that truly attracts top talent,” Barnett said. “The solution is to simplify several aspects of their strategies with direct expectations in job descriptions and interviews, less unnecessary elitism, modern recruitment metrics and fewer steps in the job application process.”