Talent and Leadership Trends in 2026: what business leaders must prepare for
At the start of 2026, the conversations I am having with business leaders feel different from those of previous years. Over the last 12 months, I’ve found myself having more open, honest conversations with board members and leadership teams than ever before.
There is a sharper focus on risk, resilience, and long-term capability. The uncertainty that dominated decision-making post-pandemic has not disappeared, but it has matured. Leaders are no longer simply reacting to change. In fact, while the UK economy is expected to continue growing, some forecasts suggest a slowdown to 1% GDP growth in 2026, meaning strategic talent decisions are more vital than ever.
From my perspective, there are five key shifts that will define how organisations approach talent in 2026.
Greater investment in people
With less hiring and people being more risk-conscious when considering potential moves, companies will invest more in developing their own people through programmes around training, coaching, development and succession planning.
We’re already seeing this play out across sectors. Instead of relying on external hires to plug gaps, organisations are looking inward. The emphasis is shifting towards identifying leadership potential early, accelerating development, and building internal pipelines. This is not only a response to tighter markets but also a recognition that retention and growth are inseparable.
This focus on internal growth is reflected in market forecasts. Findings from Business Gateway in July 2025 reveal that the UK coaching sector alone is projected to grow by an annual rate of 7.29% between 2025 and 2029.
How AI will reshape leadership and talent decisions in 2026
More investment in effective and intelligent use of AI, rather than seeing it as a way to replace operational employees or processes. In 2026, the fastest growing companies will be those who use their experience and knowledge to get the best of AI.
The narrative around AI is also changing. The initial excitement focused on automation and replacement. What I am seeing now is a more thoughtful approach. Organisations are asking how AI can enhance decision-making, improve insight, and scale expertise without losing the human element that underpins strong leadership. In my conversations with clients, the most impressive leaders are not asking what AI can remove, but how it can support and drive growth.
Blurring of consulting and search.
Why executive search is merging with leadership consulting
Clients increasingly look to buy multi-service packages. This includes leadership assessment, coaching, development packages and onboarding support. More and more clients are moving away from standalone Executive Search, wanting to mitigate risk and accelerate success in key senior hires.
This is one of the most significant shifts in the market. Senior hires are too critical to leave to chance. Businesses want continuity of support before, during, and after the appointment. The lines are blurring between hiring, onboarding, development, and long-term performance. That integrated view is fast becoming the norm rather than the exception.
Talent intelligence becoming a core service line
Clients today want data-rich market maps, competitor talent analysis, remuneration surveys, role re-design, and benchmarking insights as part of every Search mandate. Today, data is no longer a nice-to-have. It’s central to decision-making. Clients want clarity on where talent sits in the market, what ‘good’ really looks like, and how competitive their propositions are. That level of intelligence is shaping not only hiring, but also how roles themselves are designed.
The crunch on tech talent.
Tech talent shortages and the rise of interim leadership models
As digitisation continues apace, the top technologists remain hard to engage and expensive to employ. The dearth of talent in security, infrastructure modernisation, and edge computing means the need for a specialised partner with strong networks and market access is key, as is the need to have a strong marketing message. This also drives an increased need for more fractional and interim executive resource, especially for early-stage and scale-up tech.
This pressure is not easing. If anything, it will intensify. The organisations that succeed throughout 2026 will be those who combine strong networks, credible market messaging, and flexible models of engaging leadership talent.
My final thoughts
As we enter 2026, the organisations that will stand out are those that take a long-term view of people, leadership, and capability. Here at Morgan Philips, our role is to help clients move beyond transactional hiring and towards integrated, future-focused talent strategies that reduce risk, accelerate impact, and build resilience.
| Content type | Articles |
| Topic | - HR & market trends
- Leadership & management
|
| EN FAQ Question #1 | What are the biggest talent challenges for organisations in 2026? |
| EN FAQ Answer #1 | A leadership scarcity crisis defines the landscape. As demographic shifts accelerate, there is a deficit in 'ready-now' executive talent capable of managing hybrid, AI-integrated teams. According to the KPMG/REC UK Report on Jobs (January 2026), demand for executive and professional roles has seen one of the steepest reductions in vacancies. This isn’t due to a lack of need, but a sense of caution, something we can expect to continue at least through H1 2026.
Organisations must also navigate the complexities of the Employment Rights Act 2025. This has made Employer Value Proposition (EVP) a board-level risk impacting senior talent attraction. |
| EN FAQ Question #2 | How is executive search evolving in 2026? |
| EN FAQ Answer #2 | Executive search has transitioned from a transactional placement model to a strategic advisory function. Boards now prioritise future capability and AI literacy over traditional industry tenure. Deloitte research highlights a modernisation of talent architecture, moving away from 'traditional consulting profiles' towards agile, skills-based leadership roles. The focus is now on identifying leaders who can navigate volatility while maintaining human connection in a digital-first environment.
A significant shift is the rise of fractional leadership. More firms are bringing in senior leaders on a part-time or project basis instead of making permanent hires.
This approach enables organisations, particularly fast-growing SMEs, to access experienced CFOs or CTOs when needed. Leaders are often brought in to support challenges, such as AI integration, without a six-figure salary commitment. |
| EN FAQ Question #3 | Why is talent intelligence becoming critical for leadership decisions? |
| EN FAQ Answer #3 | Talent intelligence moves leaders away from 'gut-feel' hiring towards data-driven workforce planning. This is now a primary tool for de-risking talent decisions. Rather than relying on historical data alone, leaders use real-time insights to decide whether to 'build, buy or borrow' capabilities. Rising business costs have forced many organisations to deprioritise 'optional' investment.
This makes precision in hiring essential. Talent intelligence enables organisations to identify 'flight-risk' roles and benchmark compensation against a volatile market. |
| EN FAQ Question #4 | How will AI impact leadership roles rather than replace them? |
| EN FAQ Answer #4 | AI acts as a force multiplier for human judgment rather than a replacement for C-suite intuition. While many tasks are exposed to AI, the technology cannot perform any single complex occupation. For leaders, AI automates the administrative noise. It frees them to focus on high-value human imperatives. |