Artificial intelligence has officially moved from buzzword to blueprint in HR—at least according to ADP’s 2026 HR Trends Guide, which lays out how organizations are preparing for a world where agentic AI, skills intelligence, and tighter HR-IT alliances shape nearly every corner of the employee experience.
The message is clear: companies aren’t just adopting AI tools; they’re restructuring work around them. But unlike the panicky automation narratives of years past, ADP’s data points to something far more collaborative—and far more complex.
Businesses across sizes and sectors are leaning into skills-based talent models, improving AI governance, navigating ever-growing compliance rules, and forging a new, interdependent relationship between HR and IT. In other words, the workflows of 2026 won’t look like the workflows of today. And that’s the point.
Skills Become the New Operating System
If 2025 was the year companies experimented with AI, 2026 may be the year they re-architect jobs around it. Organizations are digging deep into their talent inventories, mapping both current and emerging competencies, and redesigning roles to match shifting business needs.
ADP’s Market Pulse data (April 2025) shows just how optimistic employers have become about AI’s role:
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84% of large companies say AI can streamline processes without replacing employees
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76% of midsized companies agree
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73% of small businesses say the same
That’s a surprisingly unified stance across very different operating realities. The shift, ADP argues, comes from seeing AI not as a threat but a teammate.
Tiffany Davis, ADP’s chief talent acquisition, inclusion and diversity officer, puts it more bluntly: using AI well is about “adopting a mindset of technology collaboration.” In practical terms, that means employees spend less time clicking and more time solving problems or designing solutions—activities that AI can’t (yet) replicate.
Companies building that mindset now are relying on training programs, experimentation labs, and leaders who model a continuous-learning lifestyle. The days of annual upskilling are over; ongoing adaptation is becoming table stakes.
The Patchwork of AI Regulations Gets Messier
AI isn’t just a technology shift—it’s a legal one. ADP’s guide points out what HR leaders already know: the compliance landscape is turning into a multijurisdictional maze.
The EU is already tightening AI rules in employment decisions, Colorado is rolling out its own guardrails, and more U.S. states are lining up behind them. The trend is obvious: transparency, audits, and explainability are no longer “nice to have”; they’re non-negotiable.
Helena Almeida, ADP’s AI legal officer, recommends a grounding question every HR leader should be asking vendors: Was this tool built securely, responsibly, and with high-quality data?
Because if it wasn’t, your compliance risk can multiply overnight.
Almeida also points to something often ignored in AI conversations: human oversight. No one is getting credit for “automating discrimination less” or “mostly secure data flows.” Responsible AI programs require governance, transparency to employees, ongoing monitoring, and a willingness to pull a tool from production if it starts behaving badly.
And that’s before we factor in the other tidal wave hitting employers…
Pay Transparency Laws Expand—Again
If you think pay transparency peaked in 2024, think again. The EU is rolling out stricter requirements by 2026, and multiple U.S. states are tightening their own regulations.
For HR and comp teams, this means one thing: audit season is becoming a permanent season.
Employers are being asked to provide clearer explanations of pay ranges, advancement pathways, and gender gaps—and to ensure wage decisions are based on objective, work-related criteria. In other words: no more back-of-the-envelope salary decisions.
Almeida sums it up simply: companies need to evaluate their internal and external pay data now, before audits become mandatory.
Compliance at Scale: The Global Headache
Whether you operate in two states or ten countries, compliance is getting harder. Laws overlap, contradict, or need different processes, and HR teams are stretched thin trying to maintain consistency without breaking anything.
ADP notes that compliance shouldn’t just be about satisfying the narrowest legal requirement—it should be about building a standard that respects employee rights and withstands regulatory scrutiny, even across conflicting rules.
Meg Ferrero, vice president and assistant general counsel at ADP, explains it as a mindset shift: instead of creating a strategy for every single law, build one strong, employee-centric framework that covers most scenarios. Scalability is the only realistic way forward.
Agentic AI: HR’s New Automator-in-Chief
If generative AI was phase one, agentic AI is phase two—and ADP is betting big on it.
Unlike a typical AI assistant that answers questions, agentic AI takes action. It can execute multi-step workflows, validate data, review payroll exceptions, onboard employees, and generate insights with actionable next steps.
This isn’t science fiction; it’s already emerging across HCM systems.
Amin Venjara, ADP’s chief data officer, frames it as “automation that’s trustworthy, compliant, and resilient when conditions change.” The secret? Humans remain the guardrails, providing purpose and approvals while AI handles the repetitive complexity.
Early adopters are already using agentic AI to:
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streamline onboarding
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reduce payroll errors through automated validation
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flag and resolve workflow bottlenecks
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surface workforce trends before they become problems
It’s the kind of automation CFOs love and HR leaders cautiously embrace—provided governance keeps pace.
Data Governance Evolves to Keep Up
With agentic AI comes a new demand: pristine, well-governed data flows. ADP highlights that companies must rethink how data moves across systems, who controls it, and how securely it’s stored.
Privacy, quality, and security now sit at the center of AI-enabled HR. A single broken integration can lead to compliance exposure, operational downtime, or—worse—algorithmic errors that impact real employees.
Interestingly, ADP found that 20% of small businesses, 50% of midsized companies, and two-thirds of large enterprises already have some form of generative AI governance in place. That’s better than many expected, but it still signals a long road ahead.
HR and IT: The New Power Couple
If HR once bought tools and IT just plugged them in, that era is done. AI intertwines the two functions so tightly that neither can operate without the other.
ADP stresses that human-AI interactions across the workplace will depend on coordinated governance, strong integrations, modern architecture, and shared decision-making between HR and IT.
Tonya James, ADP’s VP of product management for global payroll, says IT’s involvement is now crucial. Their concerns—user management, data security, integration scalability, and maintenance—shape nearly every AI purchase.
In return, IT depends on HR to understand the human impact of these tools: adoption, trust, workflow change, and unintended consequences. The companies that succeed in 2026 will be the ones where HR and IT sit at the same strategic table, not on opposite sides of an implementation ticket.
The Bottom Line
ADP’s 2026 HR Trends Guide paints a future that’s not dystopian or utopian—but procedurally complex and technologically ambitious. AI is not replacing people; it’s reshaping the work they do. Skills are becoming the currency that determines mobility and competitiveness. And HR is emerging as a strategic collaborator with IT, compliance, and C-suite leadership in ways that haven’t been seen before.
For organizations, the message is clear:
2026 won’t reward the fastest adopters of AI—it will reward the most responsible, collaborative, and skills-ready.
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