After two years of cautious resets and uneven labor signals, U.S. employers are entering 2026 with something that’s been in short supply: confidence.
A new Express Employment Professionals–Harris Poll survey shows hiring optimism rebounding sharply, with companies planning their most aggressive headcount expansion since the study began in 2020. Yet beneath the upbeat sentiment lies a familiar—and increasingly structural—challenge: finding workers with the right skills at the right time, even as automation and AI reshape workforce decisions.
The result is a labor market that feels both expansive and constrained—full of opportunity, but difficult to navigate.
Hiring Confidence Is Back—Almost Everywhere
According to the survey of more than 1,000 U.S. hiring decision-makers, 85% report a positive outlook for 2026, nearly matching optimism levels last seen in late 2024. While 37% still express a negative outlook, that figure remains consistent with earlier in 2025, suggesting employers are balancing growth ambitions with realism.
What’s striking is not just sentiment, but intent. Two-thirds of companies plan to increase headcount in the first half of 2026, the highest level recorded in the six-year history of the survey.
This isn’t defensive hiring. Employers say they’re recruiting to:
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Expand into new markets (39%)
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Add new skill sets and expertise (38%)
In other words, growth—not replacement—is driving demand.
Contingent Talent Moves Into the Mainstream
One of the clearest signals from the data is the continued normalization of temporary and contract labor.
More than one in four companies (26%) plan to hire contingent workers in 2026, and a striking 83% say they’re willing to use contingent talent to meet business needs—up significantly from earlier in the year.
This shift mirrors global workforce trends. Internationally, 65% of company leaders plan to expand their use of contingent workers, reflecting a broader move toward workforce flexibility amid economic uncertainty and rapid technological change.
For employers, contingent labor offers speed and adaptability. For workers, it reflects a market where traditional full-time paths are no longer the only—or even preferred—option.
Targeted Pipelines Replace Broad-Based Recruiting
While hiring overall is accelerating, companies are becoming more selective about where they source talent.
Interest in recent college graduates remains steady at 51%, but fewer organizations plan to hire:
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College students (33%)
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Retirees (10%)
The data suggests employers are narrowing their focus to candidates who can deliver value quickly, rather than investing heavily in longer ramp-up pipelines. It’s a pragmatic response to skills shortages—but one that may create longer-term challenges if early-career development continues to lag.
Automation and AI Are Reshaping Workforce Math
Technology is no longer just a productivity enhancer—it’s a staffing variable.
Among companies planning to reduce staff in 2026:
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39% cite increased use of technology
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33% say they will not replace departing employees
This reflects a growing reality: AI and automation aren’t simply augmenting work; they’re changing how much labor organizations believe they need.
But the impact cuts both ways. While automation may reduce demand in some roles, it’s also intensifying the need for higher-level technical, analytical, and human-centered skills—roles that remain difficult to fill.
The Persistent Problem: Skills, Not Pay
Despite strong hiring intent, 36% of companies report having open positions they cannot fill. The reason isn’t compensation, flexibility, or hours—it’s skills.
The survey reveals a clear hierarchy of obstacles:
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50% say applicants lack relevant experience, up from last year
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26% struggle to evaluate informal or self-taught skills
Meanwhile, compensation-related barriers are declining:
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Unwillingness to work required hours: 21%
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Pay not competitive: 19%
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Benefits not competitive: 14%
The message is unambiguous: employers aren’t failing to attract candidates—they’re failing to find candidates who meet increasingly specific requirements.
Skills Validation Is Becoming the Bottleneck
One of the most telling data points is the difficulty employers face in assessing nontraditional skills. As more workers acquire expertise through bootcamps, online learning, and on-the-job experience, traditional resumes and degrees are proving insufficient as evaluation tools.
This explains the growing interest in skills-based hiring, competency frameworks, and alternative credentials—but also highlights why adoption has been slow. Without trusted ways to validate skills, employers default to familiar signals, even when they know those signals are imperfect.
Nearly Everyone Expects Challenges in 2026
Optimism doesn’t equal ease. Ninety-one percent of hiring managers expect challenges in 2026, with the top concerns reflecting a workforce in transition:
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AI-related complexities (46%)
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Finding qualified candidates (40%)
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Increased competition for talent (28%)
Interestingly, fewer employers now cite a mismatch between the available talent pool and company needs (20%, down from earlier in the year). That suggests organizations may be recalibrating expectations—or becoming more realistic about what “qualified” means in an evolving market.
The Strategic Imperative: Adaptability
For Express Employment International, the takeaway is clear. Growth will favor companies that treat workforce development as a strategic function, not a reactive one.
“As we move into 2026, companies that thrive will be those that invest in people and adaptability,” said Bob Funk Jr., CEO, President and Chairman of Express Employment International. “Technology will continue to transform how we work, but human expertise and creativity remain irreplaceable.”
That framing reflects a broader truth emerging from the data: AI may change how work gets done, but it doesn’t eliminate the need for skilled humans—it raises the bar for what “skilled” means.
What This Means for HR and Business Leaders
The 2026 hiring outlook presents a paradox. Employers are confident, expanding, and open to new workforce models. Yet the same organizations remain constrained by skills gaps, evaluation challenges, and the accelerating pace of technological change.
The winners will likely be those that:
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Invest in upskilling and reskilling—not just recruiting
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Build flexible talent models that blend full-time and contingent labor
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Adopt better tools for skills assessment and workforce planning
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Treat AI as a complement to human capability, not a substitute
Hiring momentum is real. The question for 2026 isn’t whether companies will grow—it’s whether they can build the workforce required to sustain that growth.
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