Hiring Challenges at the Beginning of 2026
January 8, 2026
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This post was originally published in February 2024 and has been updated for freshness, accuracy, and comprehensiveness.
As the calendar turns a new leaf, businesses across industries gear up for fresh challenges and opportunities. One of the critical aspects that companies focus on at the beginning of the year is hiring new talent. However, the hiring landscape at the start of the year comes with its unique set of obstacles that can impact the acquisition process and the overall success of onboarding new team members.
Attracting and hiring top talent is the first piece of the domino. Even if it doesn’t seem like a big player in a company’s operation, coming up short on your staffing needs will not only harm your production but also your organizational culture and team’s morale.
Although every company has its own challenges, and in fact, the same obstacle can appear and be approached differently, the importance of addressing them rapidly and proactively will improve your hiring times and the quality of your new employees. Remember, the talent pool can get quite competitive, so being aware of the ups and downs will allow you to be more strategic with your hiring decisions.
In addition to the above, the way your company navigates the labor market’s ups and downs contributes to your employer branding, ultimately increasing the number of candidates you attract and their inclination and confidence in your company.
As mentioned above, to react effectively to the hiring challenges that every year brings, it’s essential to stay informed about the labor market and economic realities. So, how is this year’s outlook looking so far on those two matters? Although there are many trends that will influence and reshape workplaces in 2026, and overall the labor market, let’s keep the spotlight on those affecting talent attraction and hiring.
Arguably, one of the most significant is the mass retirement wave of older workers, particularly Baby Boomers. According to Reuters, by 2026, 59% of workers above 55 years old will start retiring or plan to retire within the next 5 years. This means that many companies will have to keep up with a possible skill and knowledge gap with succession strategies, upskilling, and landing new talent.
However, the above challenge pairs with another one related to job satisfaction; despite the job security, employee engagement has hit its lowest point in this decade with only 34% of the workforce feeling engaged in 2024; in contrast, Kelly’s Re:work Report, states that 42% of executives believe workers satisfaction is improving, showing a notable gap between employees and employers.
On top of the above, almost half of the Gen Z talent pool feels undervalued because of their age, and considering they’re one of the main talent pipelines of today’s job market, it’s essential that employers close this gap to successfully balance the Baby Boomers’ retirement wave.
On the technological side, AI will continue to influence recruitment—some of them already seen and others still to be seen—since both employees (79%) and employers (66%) are using it during the application and hiring process, according to Kelly Services. However, instead of being a questionable practice, both parties have come to the middle ground that AI is just another tool and is fine to use.
But that’s enough for context; it’s time to dig deeper into the list of challenges that can hinder building a skilled workforce at the start of the year and hiring strategies to combat them:
The holiday season, which extends from late November to December, often leads to a slowdown in hiring activities. Many decision-makers and potential candidates take time off during this period, causing a temporary hiatus in the hiring process. As the new year begins, companies face the challenge of reviving and accelerating their hiring strategies to compensate for the time lost. The rush to pick back up where the year had left off can create pressure on HR teams and may result in overlooking critical aspects of the hiring process.
Hiring Tip: One potential solution to this hiring challenge is for companies to plan ahead and prepare for the holiday slowdown by proactively sourcing candidates and conducting initial screenings and assessments before the holiday season begins. This can help companies maintain a steady flow of candidates and resume operations more seamlessly as the new year begins.
However, if you didn’t get a head start with your hiring tasks before the holiday season, you can also consider outsourcing some aspects of the hiring process, such as candidate sourcing, screening, and reference checks, to third-party recruiters to alleviate the workload on HR teams.
As mentioned above, with a knowledge and qualification shortage on the horizon due to mass retirements and new technologies, such as Artificial Intelligence, breaking into the market, skills have turned into the main currency in hiring. Aside from this, businesses are not the only ones seeking a fresh start at the year’s onset. Various job seekers, armed with resolutions for career advancement, flood the market in search of new opportunities.
This increased demand for talent creates a competitive job market where companies must stand out to attract the best candidates. Identifying and securing top talent becomes challenging as skilled professionals now not only receive multiple job offers, but also seek job opportunities where they can continue developing their skill set.
Employers need to differentiate themselves not only through compensation but also by emphasizing company culture, growth opportunities, and employee benefits.
Hiring Tip: A solution for this type of challenge could be for companies to focus on building a strong employer brand. This involves creating a positive reputation and image of the company that appeals to job seekers. By highlighting the company’s values, culture, and perks, companies can attract top talent that aligns with their mission and vision.
Companies can also streamline their recruitment process by leveraging an agency like gpac that already engages with qualified candidates throughout the year.
The beginning of the year often brings renewed budget discussions and financial planning for businesses, particularly amid the ongoing risk of recession and the evolving economic landscape. Companies may face constraints when allocating funds for hiring, particularly if they have year-end expenses or unexpected financial challenges.
This limitation can negatively impact the hiring process, compromising the quality of talent acquired or delaying filling crucial positions. HR teams must navigate these monetary constraints by optimizing recruitment budgets and exploring cost-effective hiring solutions.
Hiring Tip: For this hiring challenge, companies and HR departments could consider outsourcing certain non-critical functions to free up resources for hiring. Another option could be to explore alternative recruitment channels, such as social media or employee referrals, to reduce acquisition costs. Additionally, investing in employee retention strategies can help reduce the need for frequent hiring, ultimately saving costs in the long run.
One of the main reasons Gen Zs are distrustful of their employers and disconnected is poor onboarding experiences. The slowdown in resuming hiring operations and the aggressive return-to-office strategies of some companies present a new set of challenges in providing comprehensive onboarding experiences.
The hustle to kickstart the year or bring in remote or hybrid employees can result in rushed onboarding processes, leading to potential gaps in understanding company culture, goals, and team dynamics. Striking a balance between speed and thorough onboarding becomes a delicate challenge that requires careful planning.
Hiring Tip: Though it may seem a bit hasty to start the onboarding process before the employee’s official start date, companies can at least ease into the process by sending them information about the company culture, providing instructions on resources and tools, and introducing them to their new team members in advance.
Another solution could be to assign a mentor or buddy to the new hire to help guide them through the onboarding process and answer any questions they may have, so as not to put a strain on HR professionals.
After almost every industry shifted to remote work due to the 2020 Covid-19 Pandemic, in the past two years, we’ve witnessed companies pushing employees back to the workplace. However, many employees have put up a fight to maintain their work-life balance, and in the best cases, they’ve arranged hybrid work models.
However, when hiring, this means there are still plenty of candidates who include hybrid work as a make-or-break benefit to accept a job. On the other hand, hiring at the beginning of the year under this model involves navigating the nuances of digital onboarding. Ensuring effective communication, providing remote resources, and fostering a sense of belonging for remote employees have become paramount challenges.
Hiring Tip: Working on hybrid models that meet the talent pool demands is vital; however, you should also work on the “hows”. Investing in digital tools and strategies that meet the needs of virtual team members.
It’s crucial to foster a sense of community and belonging among remote employees by organizing virtual team-building activities so new hires feel supported and engaged, regardless of their location. Establish clear expectations and guidelines for communication, such as response times and preferred communication methods, to ensure that remote employees feel involved and included.
The pace of technological advancements—especially those related to Artificial Intelligence—continues to reshape job requirements across industries. Apart from learning how to use Artificial Intelligence in hiring ethically, and even match the use job seekers give to AI, you must align your hiring needs with the latest tech trends in your industry.
On top of staying up-to-date with the uses and regulations around these new technologies, before jumping into the talent market to identify candidates with the right skill set, HR teams need to redefine skill requirements. One of the major challenges AI implementation has brought to the table is figuring out how roles should reshape instead of disappearing due to the importance of human oversight in some functions.
Hiring Tip: To tackle this challenge, companies can adopt multi-pronged hiring strategies. First of all, carefully plan your hiring needs. Identify what roles can actually make a difference by using AI and not just adopt it because it’s the hottest topic of the moment; more importantly, double-check with teams how AI can benefit or harm—yes, 95% of corporate AI initiatives showed no return in 2025—their daily operation.
On the hiring side, investing in upskilling programs for their current workforce, leveraging technology to identify candidates with the required skill set, and focusing on hiring individuals with a growth mindset who can adapt to new technologies despite a lack of prior knowledge. A willingness to learn and develop into the ideal employee makes candidates more adaptable to evolving technologies and company needs.
Although this topic will spark the conversation throughout the year rather than a start-of-the-year phenomenon, it’s best to prepare for it right from the get-go. Over the past few years, we’ve witnessed how younger generations have taken over the talent market; first, it was the millennials, and with more Baby Boomers retiring, it’s Gen Z’s turn.
However, there are mixed feelings among both Gen Z professionals and employers regarding their role in today’s workforce and labor market. As mentioned above, younger generations are more prone to experiencing a lack of motivation and even confidence, because the value of their college degrees is plummeting, entry-level positions are shrinking, and AI is increasingly taking over high-paying roles.
Hiring Tip: So, how are hiring professionals supposed to attract and motivate Gen Zs? Although only 8% of the hiring professionals trust the Gen Z to dabble in the workplace—mixed with the 24% of Gen Zs who believe in themselves to start working—they’re true digital natives, and like it or not, they’re more prepared to adopt and learn new tech skills.
Even if they will have to undergo transition and adaptation processes, as long as you offer Gen Zs learning opportunities, and equally important, a culture that aligns with their ideals and makes them feel valued, rest assured that they will play a major role in your company’s operation and success.
Hiring at the beginning of the year brings a mix of excitement and challenges for businesses. Navigating these obstacles requires a mindful and proactive approach to ensure growth and longevity for the new hires that companies bring on. With careful planning, adaptability, and a focus on innovative strategies, businesses can overcome these hurdles and set the stage for a successful year ahead.
Face these hiring challenges with a trusted gpac recruiter. Find out more when you visit gogpac.com
Contributed by Mary Dominguez and Luis Arellano
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