Mervyn Dinnen  0:10  
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Mervyn Dinnen  1:08  
 Welcome to the HR Means Business podcast, which is part of the HR Happy Hour Network. I'm your host, Mervyn Dinnen. Today, I'm very pleased to welcome Kyle Forrest, and we're going to be diving into some of the key trends in their 2026 Human Capital Trends Report. Kyle, welcome to the HR Means Business podcast. Would you like to introduce yourself and maybe talk a little bit about your background?

Kyle Forrest  1:36  
Sure. Thank you for having me, and really excited to be here and share some of the research and highlights that we're seeing in the market, plus what I'm seeing with clients that I deal with day to day. But a little bit about myself. I at Deloitte, as you noted, I'm the future of HR leader, which means I spend all my time with CHROs HR leadership teams and business leaders to understand where is the HR function headed? There are many things, trends, topics impacting the world of work, AI and automation is one. But there are demographic shifts, there are geopolitical dynamics, there are macroeconomic impacts that are happening that impact enterprises and the role that HR plays within the enterprise. I also engage with cross C suite on those top picks as well, because, as we have seen over the years, many functions the lines are blurring between them, which I'll dig into a little bit. And it's all about, how do you help organizations drive business outcomes new in new and different ways and outcomes for the humans right, both within the organizations and within the communities that businesses work. On the personal side, married, have three daughters and a dog, that keep me busy and also keep me thinking about the world of work. Because when I have look at their age ranges and see the kind of technology trends that have happened over the course of their own lives, you know, gets you thinking about what's ahead for the next set of years as they as they grow up, and how, as the parent, do you raise your children into a dynamic world, but really excited to be here.

Mervyn Dinnen  3:12  
Okay, it's great to have you. Before we go into the research report, I'd like to ask you what what do you see as the main priorities for business in the year ahead. What are the areas that you think business leaders should be focusing on this year?

Kyle Forrest  3:28  
If I were to simplify it into two priorities. Number one, organizations are continuing to spend on AI capabilities, right and AI and automation capabilities across a range of you know, technology aspects, right? And we've seen in Deloitte State of AI Report 2026, and other research that business leaders remain bullish on AI, with 78% of executives expecting to increase spending in their next fiscal year or their next calendar year. But that gets to my second priority that I think everyone is focused on is, how do you actually drive meaningful adoption, meaningful change in redesigning the work and the roles and how teams are getting value from those investments, right? In the fall of 2025, Deloitte did some research when we kind of launched our point of view that it needs to not be about humans and machines or layering technology into existing workflows, but humans times machines, which is, how do you bring humans and technology capabilities together to amplify exponentially the impact on an organization? We saw in that research study that 59% of organizations are taking a tech first approach, and those organizations are not exceeding their ROI expectations. So I think, I expect from everything I see and hear and from our research as well, is that there's going to be a renewed focus on pairing, an emphasis on the humans and redesigning the work, in addition to continuing to spend on the technology in 2026.

Mervyn Dinnen  5:16  
Okay, now before we dig right into it, I would like to ask you, as you might know, I do a lot of writing and speaking around intergenerational matters, so I and I've recently, in fact, most, most recently, published a podcast in which myself and Daniel Farage are talking about Deloitte 2025, global survey of 23,000 I think it was Gen Z and Millennial people. What were your key takeaways from that?

Kyle Forrest  5:42  
Yeah, there were three that kind of stuck out to me, especially in the context of having, you know, children who were on the other side of Gen Z into the kind of Gen alpha and kind of next wave. One that there's a kind of big focus on workplace happiness, workplace, you know, well being right and understanding the interplay between financial well being, purpose and meaning right in work. And you know, physical and mental well being. And you know the Gen Z and millennials, if you look at all the dynamics in the world over the last few years are really making career decisions that are at the intersection of those topics, right? It's not just about where can I get the most money. Secondly is there's actually some interest in acknowledging growth over the duration of a career versus just reaching an executive seat, right? Yeah, achieving an executive role is not the end all be all, right? People acknowledge that as organizations shift trends, shift work shifts. You know, reaching the executive corner is not, not the end all be. All right. So it's really fascinating, and I'll actually briefly say I had a colleague who, early in the pandemic, you know, had high school, college age kids at the time who were at home, who said my kids were watching what I was dealing with as an executive. And I think they were questioning, why do I want that job? Right? Because it was a very stressful time for executives, right? And you were on all day, all night into the weekends, right? Navigating that. So I think there's a lot of things, when you think about what was one of those formats of experiences shaping, what is Gen Z, desiring now, yeah, and the third thing that I'll that I'll briefly call out is, there's a there's a sincere desire for engaging with the organization to improve, you know, quote, unquote, soft skills, human skills, what some people are calling power skills now, like empathy and leadership and critical thinking, right? And Gen Z, and I know Danielle has spoken about this, is actually very open to coming into the office or being in person intentionally to learn those things. In fact, they're craving it. So I think that has some interesting dynamics and mixes for how do organizations continue to be intentional with that population.

Mervyn Dinnen  8:14  
Yeah, definitely. The concept of the career web, as opposed to the career ladder, right? Is one that really resonated. 

Kyle Forrest  8:22  
And I think that, you know, people have talked about the jungle gym, the lattice, the other right? And I think some of that is making it actually much more acceptable. You don't always have to climb straight up, you can go sideways, you can take a step back, you can jump into a new field, right? People now are using the term the portfolio career, right? I think there's a lot of openness to that, which is hopefully going to be for the betterment of everyone.

Mervyn Dinnen  8:48  
Diving into specifically the reason we're here, the Global Human Capital Trends Report. I suppose the first thing that I noticed about it was this question of adaptability. 85% of leaders, I think it was the adaptability is critical, but only kind of it was like six or 7% feel that they're actually delivering adaptability within the business. Why do you think within organizations, there's this big gap between knowing what's needed and actually doing it?

Kyle Forrest  9:22  
So what we saw in our 2026 research was a build from 25 and I think in 2025 as we dug into the topic of change and adaptability and related topics, we saw that workers were often were starting to experience up to 10 major enterprise wide changes in a given year, and at that point, as we look back from a decade prior, where it was like two over the course of 25 as we were researching for the 26 report, 1/3 of workers who responded to the survey said they were now experiencing 15 major changes. Right? And that is broken down into changes to the way in which they work, the skills the organization expects them to have, and or AI, right? And AI probably plays into both those other twos, right? Yeah. And that was resulting in, for the workers, a feeling of reduced well being, right, which gets back to what I mentioned on the Gen Z and Millennial survey, or a lack of role clarity or reduced engagement, right? And on the other end of the spectrum, because for the report, we survey both leaders and workers to get difference of views. You know, only 27% of leaders say that they manage change well, right? And so part of the problem is change management. Traditional change management has always been organized around an episodic thing, a moment in time, right? System launch, business change, new market entry, right? It does not account for the fact that there's change happening every day, every week, right? There's little change, there's big change, right? And so what we introduced in 2025 was we made up a word called stagility, which is you need to help workers feel stability by being agile, right? Yeah, acknowledging that the only way to continue to grow the human condition is growth, right? So let's, let's lean into being stable by being agile. And so in 26 again, we're kind of doubling down on that and saying adaptability, in and of itself must be built into how work is happening on a day to day, week to week, basis. And there's some promise and potential for AI with that right. How does it help the humans with that ongoing adaptability? But it requires intentional design and an intentional approach to for organizations to that topic.

Mervyn Dinnen  12:03  
One of the, I suppose, one of the most interesting things about the report was it was a concept of something called culture debt, which I was kind of new to me. And I see that the report, you know, it warns about neglecting culture during AI transformations. Can you explain kind of, you know, what culture debt is, and I suppose, what, how painful it is to pay it back as with any debt. But I mean, what? What does it look like in practice, you know, during a transformation?

Kyle Forrest  12:40  
Well, folks are probably very familiar with technical debt, right, the accumulation of technology over over years, via acquisition or other things, and the significant cost that organizations pay to support all that infrastructure and or eventually retire it. So it's a it's a coolant, thing that folks should be familiar with when you think about culture debt, right, AI or other kind of business, actions that organizations take can erode trust, right? Because, essentially, workers have questions about executive decisions, right? So you think about understanding the way in which AI impacts work, right? If the worker does not have clarity around, why is the organization investing in AI and automation technologies? What's the implication to my role in work? What's the implication to having a career. If I find you five to eight hours a week of productivity, do I get a bit bigger bonus? Do I get a promotion? Do I accelerate my career? Right? It leads to confusion or mistrust or kind of weakened norms in the organization tied to performance and engagement. And in our report, actually only 42% of workers who responded said that their organizations rarely assess AI's impact on people, right? So the workers do not have a clear message from the executives on what's going to happen here. And so to pay off something like culture debt, it requires acknowledging that culture, in and of itself, is not the domain only of the CHRO or the HR function, right? At Deloitte, for several years, we've defined culture as you know, the behaviors and actions that are occurring on a day to day basis in a company, company, and certainly the systems that reinforce that. And so as organizations are trying to embed AI and automation into the daily work, they need to be very explicit around what is this going to do to work? How are we tackling this from a career perspective? And of course, similar. Or to the you know, topic of change, there's a there's a bright spot here. There's an opportunity to use some of the AI investments to help reinforce trust, to help strengthen human connection, to help workers navigate the moment. But it requires an intentional approach on the topic.

Mervyn Dinnen  15:20  
Whilst we're on the question of debt and deficits, the report also kind of indicates something like a trust deficit in AI decision making itself. I think it was something like 60% was it of executives are using AI in making decisions, but only like 5% of them say that they think they manage it well, which was, in a way, almost a staggering accountability gap. Why do you think it's arisen, and who actually owns this problem? Is it the leaders themselves? Is it HR? Is it the board?

Kyle Forrest  15:55  
So you know Mervyn, there was a, I think, interesting, recent, early part of this year, HBR article that kind of acknowledged, you know, AI is, in fact, increasing the work of, you know, that people are doing, right? Yeah. And so part of what we're seeing, you know, to that point, is that there's this pressure to do more, to move faster. Actually, in kind of the opening premise of our report, leaders acknowledge, for the next three years, their 70% of leaders acknowledged that their business strategy is to be fast and nimble. Yeah. Well, if your business strategy is to be fast and nimble, you're trying to make decisions very quickly, and so if you're using AI to do the analysis to get to a decision faster, right, oftentimes, people, you know, parts of the organization, might just be deferring to the AI output. They might not truly understand the data or the methodology or the analysis or, you know, they're not maybe contextualizing what's given to them. They're just taking the output and driving towards a decision, right? And in our research, 58% of leaders were saying that their organizations lack clarity and how to assign accountability when an AI supported decision go wrong, right? Is it the human? Is it the team of humans? Is it the system, right? And those things need to be addressed, right? Because they are far ranging implications, depending on the size and scale of the decision. And so to the other part of your question, who owns the problem, right? This is a collective, you know, C suite ownership that's needed. And if it's a public company, with the board, absolutely, the board must be involved, right? And so it's got to be clear on which decisions matter. Are significant business decisions. You know, folks have used the concept of this like one way door, two way door before right as far as the once you walk through, you can't, you can't turn around. Who is owning and accountable for those decisions? What data informs the decisions, and what degree of risk is acceptable for leveraging AI tied to said decision, right and and what role is AI playing? Is it? Is it advising on scenario modeling? Is it doing analysis? You know, whatever, whatever it may be along the way, and if you don't have that clarity, you know, again, it ties back to the cultural debt problem, right? You risk breaking trust. You risk, you know, eroding, you know, degrading culture within the organization. So all these trends, as you'll see, kind of throughout the report, are linked together, which requires kind of an integrated approach to the topic, which, again, you know, back to your open right? The two priorities this year, there's a people related set of things, and there's the technology related set of things, and those have to be paired together.

Mervyn Dinnen  18:59  
Keeping on the people side of things, I suppose, more than half of leaders from the research seem to be designing, AI, really, for efficiency. There's not really much consideration of, like, human impact, you know, designing for, you know, designing for business outcomes, and not humans kind of thing. So do you think this is a form of short termism, or is there something more structural going on?

Kyle Forrest  19:28  
What I would say there is, I think, in any given moment, organizations take an approach to a topic based on many other factors that are impacting their business, right? And I think it's always interesting to understand and kind of peel belief the headline for why organizations are tackling something, right? Yeah, what I would say, you know, in the last, you know, 24 months, we've seen a shift from just a. Assuming AI is going to be an efficiency play to companies who are truly viewing it as a value creation opportunity. There are organizations who are doubling down on entry level hiring right, versus assuming that early career roles are just going to be impacted by AI. But I think it's also, as we've seen kind of the evolution, and as I mentioned earlier, organizations that are taking a technology first approach, or kind of the AI as an efficiency play, aren't seeing the return from their AI investments. And there needs to be that intentional design on how humans and machines come together to exponentially amplify the work, because that's where I think we're going to see truly, kind of the business winners play out in the next, you know, two to three years.

Mervyn Dinnen  20:51  
Okay, change is talked about in reports. Is kind of this shift from change management to changefulness report, I think you know the tends to argue that the old playbook for managing change is dead. It's all different. What? What do you think it means in practice for organizations about building adaptability into the work itself, rather than treating as a program to be run every year or so?

Kyle Forrest  21:20  
Well, what I'll say, what's exciting is, I think organizations have been craving this. Gosh, a year ago, I was sitting in the room with some leaders, actually, at one of the spring events, and people were saying, we're debating not calling this change management anymore. We're going to call it adoption readiness, or behavior readiness, or adoption sustainment, or something that acknowledges that change is not a thing to be managed, right? It is something that has to have a sustained, kind of always on approach, right? And so, just like we saw in the research, 70% of leaders saying their business strategy is to be fast and nimble. We saw more than two thirds of leaders saying the ability of their business, their workforce, to adapt quickly is going to be critical to staying competitive in the next few years, right? And that's adapting in an array of things, whether that is at the business strategy level, right? How do you change pricing approach, customer engagement approach, you name it down to the team level, right? How are you organizing and bringing the right capabilities together to drive to a business decision, to drive to an outcome, to resolve a problem, and so we're seeing organizations take a few different approaches, right? And I'll share a couple examples. Right? One is, how do you leverage the technology, AI and automation? We've seen things like aI coaches and others like really take a hold within organizations to tailor to managers guidance on how to communicate to your workers, how to navigate the moment, how to pace you know a communication, how to give feedback to each worker in their role, how to better understand motivations of people and tailor communications accordingly. Right? Because personalized approaches make organizations nearly three times more likely to achieve those better business and human outcomes. Another thing that we're seeing, which I think is quite exciting, which I think is kind of grounded on human centered design, is actually getting workers involved right in CO creating the change themselves, right? So it doesn't always feel like executives made the decision on on the go, but it's allowing the workers to engage, give them the tools, give them the space. And you know, a concept that we introduced in our 2024 report was this thing called a digital playground, right? How do you actually make it place to experiment and explore and how to use new tools? And 87% of workers who responded to the report so that having a dedicated like space to play with psychological safety and learn the tools and put it into practice helps the worker feel that much more adaptable to change, right? And so ultimately, we really think that organizations who are building adaptability, and what we've seen should be about two and a half times more likely to report stronger financial results, right? So this is a business imperative, describes business value than those that don't.

Mervyn Dinnen  24:42  
Two thirds, I think in your report, two thirds of C suite leaders said that traditional functions HR Finance, it need to fundamentally change. But nobody seems to actually be making much progress in that, or actually. I think there seems to be almost a lack of direction in what change is needed. I mean, it's probably easy to say they need to change but, but probably need a bit more guidance. What do you think it would take to break down silos? And who's got the power to do it in the organization?

Kyle Forrest  25:15  
Yeah, well, look, functions like, HR, finance, it legal, you name it, were built for a different set of business objectives and outcomes, right? It was efficiency and control or compliance, et cetera, not for necessarily speed and collaboration, right? Yeah. And so the dynamics that the enterprise itself sit ins have shifted, and therefore the functions will need to shift right? And I've heard many people asking the question of, if I was starting a business today, would I need the legacy functional constructs right, or do I need a back office team with some functional expertise supported by AI and automation capabilities that can bring a cross functional view to tackling any problem right, driving an outcome similarly, could I do the same thing on the front office side, right? Do I have a front office team with that right mix of expertise, right? But to your question on Who do you think has who I think has the power to do it right well to truly transform, the leaders of today have to be comfortable with letting go, yeah, in this moment in time, holding on to your your remit, your territory, you know, so to speak, is going to hold you back as an individual, and it will hold the organization back right? So you need to get comfortable as a leadership team, to free up the expertise and the people to move across teams more fluidly, tackle problems in a more fluid thing. And ultimately, you know any company, the person who's going to be able to set that tone is going to be the CEO right, top of the house, you know, and the executive team, and so, you know, as this journey continues, you know what that kind of reinvention of functions will look like, will look unique to every organization, right? You got to factor in. Do you have a frontline workforce? Is that frontline manufacturing versus retail, or a hospital? Are you a mostly knowledge based organization? Are you domestic to a geography or global in nature? There's all sorts of things that are going to certainly influence the journey. And it's not going to happen overnight, but I certainly expect in the next few years, we're going to see a lot of different kind of pairings of capabilities and functions. Then, you know, then, then what exists today.

Mervyn Dinnen  27:50  
Okay, so if you and I have this conversation again in 12 months time, what do you think we'll be talking about?

Kyle Forrest  28:01  
If 2024 was the year of the proof of concept and 25 was the year of the pilot, I think 26 is the year we see productivity at scale, right? Not just individual, people in the organization who have been able to leap ahead of some of their, some of their, you know, peers. I think we're going to see by the end of the year, you know, 12 months time, like real, meaningful shifts, new roles that have been created, new ways of working differently. You know, some of that may be functional silos breaking down, like, like we've talked about, because I think this is going to touch on the fact that there is work that was able to change now without necessarily addressing the data or the systems or the processes, et cetera, through the introduction of some of the new tools, but there are other systems right from your HCM vendors, ERP vendors, others, where capabilities that were launched or announced in kind of the 2025 are finally hitting production. So you pair those two things together, the technology you know momentum continues to swing, and if organizations, over the course of 26 continue to pair their investments in technology with their investments in the people. Then I think a year from now, we're going to, you know, knock on wood, hopefully be seeing some really exciting momentum that gets people excited about, where is the future of work and the future of the world of work headed.

Mervyn Dinnen  29:37  
That's good, because when I'm out and about speaking to people, friends and socializing, and people who don't work in this field, they don't work in the world of work. They don't work in HR. They always say the same thing when I talk to them about AI. And all the, all the things you can do is we're doing away with human race. And what would have How do you answer that? What is the future for humans in this world that is ever evolving?

Kyle Forrest  30:05  
Yeah, so, so Mervyn, I did a really interesting thought experiment the other day, in fact, engaging with an AI tool. And I was asking if, if AI could do everything that it's promised, what should humans do? Right? And there were a few things, one of those, which gets back to our com and conversation around decision making, that was like, humans must be accountable, right? If something happens, right, no one is going to be turning to pick your favorite AI tool and saying you're accountable fix the problem, right? So that's one. But the second, and think one of the things that was most excited about was like humans are the ones that truly bring novel judgment and novel ideas, right? You think about the intuitive leaps that have driven innovation for the, you know, history of humankind, right, that is still in the domain of humans, right, and our ability to create net new things, right? We created AI and automation. It is trained on our body of knowledge, right? It continues to learn from the training that we provide to it, right? So, in my mind, and from my optimistic view, our ability to continue to create, you know, and advance kind of the world at large, for the betterment of society, betterment of the world at work, betterment of the planet is, hopefully where things will continue to go.

Mervyn Dinnen  31:48  
Okay, that's a great way to end, really, because it's been a fascinating conversation. If people want to get in touch with you, connect with you, what's the best way?

Kyle Forrest  31:59  
Yeah, feel free to drop me a note on LinkedIn. You know, I spend a lot of my time going into organizations, talking to leaders and teams on this topic. Always happy. You know, organizations, small and large, to do the same, all you got to do is reach out and we'll, we'll make things happen.

Mervyn Dinnen  32:18  
That's great. Well, listen, it's been fantastic to speak, to speak to you, and I look forward, personally to seeing you on an expo floor somewhere this year, later this year. Kyle, thank you very much!

Kyle Forrest  32:32  
Absolutely, Mervyn, thanks for having me. It was a pleasure. 

Transcribed by https://otter.ai