Lattice's 2026 State of People Strategy Report: Nearly Half of US HR Leaders Consider Leaving Field due to Emotional Toll, 83% Optimistic About AI

Annual findings show DEIB drops to 16% as performance management takes priority,
72% of high-performing teams leverage technology to drive results

SAN FRANCISCO, Sept. 3, 2025 /PRNewswire/ -- Lattice, the leading HR platform where people and AI succeed together, today released its annual 2026 State of People Strategy Report, surveying 1,002 HR leaders and managers worldwide. The report reveals in-depth insights into the evolving landscape of human resources and the strategic priorities shaping the future of work globally.

As HR teams brace for a year of dynamic challenges, including competing priorities and smaller budgets, the report highlights a focus on performance management, employee engagement, and the integration of advanced technologies, including agentic AI. 

"This year's report makes one thing clear: it's back to business basics. HR is at the center of today's most critical opportunities: driving performance, engaging people, and adopting AI responsibly," says Sarah Franklin, CEO of Lattice. "The most effective leaders aren't using AI to replace people, but to embrace what makes us human — scaling creativity, ingenuity, and diverse perspectives. At Lattice, we're committed to helping HR move beyond efficiency to effectiveness, giving people superpowers and making work meaningful for everyone."

Performance Takes Center Stage

Performance Management has emerged as the top priority for 40% of HR teams globally, closely followed by Employee Engagement at 39%. As organizations demand greater accountability from their HR functions, this shift reflects the challenges of balancing performance and engagement in light of strategic pivots toward measurable outcomes.

"Performance and engagement should not be opposites, they fuel each other and should be well-balanced," said Stéphanie Fraise, CHRO at OpenClassrooms, one of the largest online education and training platforms in Europe. "Favoring one at the expense of the other creates short-term wins but long-term erosion." 

Read the full report to learn how HR can drive results, innovate strategically, and thoughtfully build engaged teams and businesses. Key findings include:

Regional Differences Highlight Differing Prioritizations of DEIB, Engagement

The survey uncovered notable regional variations in HR priorities. European teams show equal focus on Employee Engagement and Learning & Development (both at 36%), while also being twice as likely as their US counterparts to prioritize Diversity, Equity, Inclusion & Belonging (DEIB) initiatives (24% vs 11%). 

However, DEIB as a global priority has declined significantly, with only 16% of teams focusing on it in 2026, down from a peak of 30% in 2023. Despite this shift, 61% of HR teams with dedicated DEIB roles plan to maintain them, and the highest-performing HR teams are 5x as likely to prioritize DEIB. 

The report highlights that decreasing budgets and a focus on performance management have led organizations to deprioritize DEIB efforts. This polarization has become significant, with 32% of HR leaders reporting feeling stuck managing different viewpoints of employees and leaders who don't see eye-to-eye on DEIB.

Technology Adoption Accelerates Despite Generational Divides

The report reveals a clear correlation between technology adoption and team performance, with 72% of high-performing teams using four or more specialized HR tools compared to an average of three tools across all respondents.

Generational attitudes toward technology vary significantly:

• 53% of Gen Z actively seeks out new technology
• 58% of Gen X requires proof before trying new tools
• 56% of Baby Boomers believe technology reduces human connection

Despite these differences, AI adoption is gaining momentum across all age groups, with 42% of white-collar HR professionals already using agentic AI regularly. Remarkably, a combined 83% of HR professionals express excitement, hope, or optimism about outsourcing tasks to agentic AI, even as 61% maintain ethical concerns.

Regina Ross, EVP and Chief People and Operations Officer at Opportunity Finance Network, notes that running low-risk pilots will help teams test new AI-enabled tools and scale what works while investing budget wisely. But beyond implementation, HR teams need to set their sights on facilitating tech and AI-readiness, said Ross, "to reimagine their roles as strategic enablers supported by technology, rather than sidelined by it."

The report observes there is a shift at a macro-level focused on proactive, continuous talent management as part of a broader cultural revolution in cross-organizational alignment – and that AI drives momentum behind the shift.

AI can help scale manager calibration and consistency by helping managers compare reviews, identify biases, and condense feedback, said Joaquin Migliore, Director of People Experience at Superside, "as if you're giving them a dedicated HRBP to think through reviews with them."

Workforce Stability Amid Challenges

In the US, several factors have caused nearly half (48%) of US HR practitioners to consider leaving the field — compared to just 31% in Europe. However, overall engagement remains stable at 78%, with 79% feeling confident in their job security. The primary drivers for considering departure include the emotional toll of managing employee issues, feeling undervalued, and work-life balance challenges.

Looking Forward: Optimism and Resilience for People Leaders

As organizations navigate an increasingly complex landscape of evolving dynamics, one truth remains constant: resilient leaders help their people and businesses succeed by defining what culture, engagement, and human connection look like now and in the future. 

AI and emerging technologies are transforming how teams operate, and the most forward-thinking organizations are using these tools not to replace the human touch, but to scale it – creating more opportunities for strategic, transparent, and meaningful work.

By embracing technological innovation, HR leaders are proving the powerful combination of AI and human-centered approaches can not only coexist, but help create the future of work.

About the State of People Strategy Report 

The 2026 State of People Strategy Report features survey responses from 1,002 HR professionals collected between April 2 and June 5, 2025. Respondents represent various industries, company sizes, job levels, and geographic markets including the US, Canada, England, Germany, France, and other global locations.

About Lattice

Lattice is the best all-in-one people platform, giving HR teams everything they need for HR, Talent, and AI — together in one place. The platform seamlessly integrates a modern HRIS with performance management, engagement insights, AI-driven analytics, payroll, and career development tools, giving HR teams everything they need to build high-performing teams and make data-driven decisions that drive business results.

Unlike outdated, disconnected systems, Lattice removes tradeoffs between best-in-class people programs and operational efficiency. Because HR teams shouldn't have to choose between strategic impact and a system that just works.

With offices in North America and the UK, Lattice serves more than 5,000 customers worldwide, including Gusto, Brilliant Earth, Intercom, Webflow, Calm, NPR, Tide, and more. The company has ranked on the Inc. 5000 list of the fastest-growing private companies for four consecutive years and is rated as a Great Place to Work by 99 percent of its employees. 

For more information, visit www.lattice.com.

The complete 2026 State of People Strategy Report is available at https://lattice.com/state-of-people-strategy/2026

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