A majority of human resources leaders say they are facing a talent crisis caused by outdated hiring practices, according to a new report released by isolved, a human capital management solutions provider.

The sixth annual HR trends report, titled “HR’s New Balancing Act: 7 Trends to Watch in 2026,” found that 62% of HR leaders say their industry is experiencing a self-inflicted talent crisis. The report draws on several isolved studies examining perspectives from HR professionals, employees, and business owners.

The findings reveal a contradiction in the current labour market. While 65% of HR leaders say power is shifting back to employers, most acknowledge they cannot effectively match talent with open positions.

“HR leaders know there are plenty of qualified candidates out there, but they’re losing them during the hiring process,” said Heidi Barnett, president of talent acquisition at isolved.

Barnett said companies are missing opportunities by posting roles with unclear requirements and inflated expectations for skills and experience.

“The solution is to simplify several aspects of their strategies with direct expectations in job descriptions and interviews, less unnecessary elitism, modern recruitment metrics, and fewer steps in the job application process,” Barnett said.

Working with technology

The report also found that 69% of HR leaders say they are leveraging artificial intelligence, with 64% believing it positively affects their department. Payroll and recruitment emerged as top AI use cases. The technology helps HR teams work more efficiently, with 65% of HR leaders reporting increased efficiency. More than half of HR leaders spend four or more hours daily answering redundant questions, which AI-powered assistants now help address.

A skills crisis also affects nearly half of HR leaders, with 48% reporting challenges. Leaders identified a lack of agility in adapting to technology and industry shifts as the root cause.

According to a survey of more than 2,000 business owners, 46% say professional development improves employee skill sets, productivity and efficiency. Another 45% say it boosts employee retention and engagement, while 41% say it strengthens leadership development and succession planning.

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