Executive Summary

CHROs head into 2026 balancing selective hiring with precise reskilling, while immigration policy, aging demographics, and uneven growth keep labor markets tight, especially in North America, yet fragile in parts of Europe, the Middle East, and Africa (EMEA). In the latest HRO Today survey of 150 senior HR leaders across North America (NA) and EMEA, availability of skilled workers remains the top workforce concern (59%), AI adoption in HR has surged (65%), and EMEA leaders consistently report higher concern than NA peers across multiple issues.

Workforce plans must shift from single-path headcount targets to multi-path scenarios that price in

1. regional demand and policy risk,
2. sector-specific talent constraints, and
3. accelerated AI impact on roles and productivity.

Use rolling quarterly scenarios (base / upside / downside) for each region and major business unit.

Workforce Trends & Global Outlook

1. 2025 Workforce Growth Plans and Challenges:

Global and regional forecasts. CHROs in Europe, the Middle East, Africa (EMEA) are more likely than North American (NA) peers to plan workforce expansion in 2025, yet also report higher concern levels across leader effectiveness, cyber risk, and tech implementation—signaling “cautious expansion,”  according to HRO Today. At the macro level, the International Labor Organization (ILO) sees global unemployment around a historically low ~5% into 2025, implying structurally tight labor markets even as growth cools.

Sectors poised for growth & demographic shifts. In the U.S., structural demand tilts toward healthcare and professional/technical services through 2033, while retail is the lone sector projected to shrink per the Bureau of Labor Statistics. Europe’s 2025 growth baseline is more subdued (EU 1.1%, euro area 0.9%), with policy uncertainty (trade/tariffs) weighing on outlooks; the ECB cut rates in March 2025 to 2.50% to support activity.

Impact on hiring: Tight labor plus modest growth means most organizations should expect selective net hiring combined with upskilling and automation, especially in healthcare, life sciences, and advanced manufacturing.

2. From Plans to Reality: How 2024 Measured Up

About half of CHROs said 2024 workforce size aligned with projections; NA was more likely to expand above plan versus EMEA, where more firms contracted beyond plan.
Economic surprises & regional contrasts. While 2024 brought several macroeconomic headwinds, North American labor demand proved more resilient and sustained growth longer than expected, buoyed by strong consumer spending and continued expansion in healthcare and professional services.
In contrast, EMEA demand softened earlier and more sharply, weighed down by slower GDP growth, energy cost volatility, and trade uncertainty, which limited organizations’ ability to expand headcount as planned.

3. Lessons from 2024 Expansions & Contractions

Navigating unexpected growth or layoffs. Organizations that maintained dynamic scenario playbooks and refreshed them quarterly, while linking workforce plans directly to operational and economic triggers, were able to pivot faster than their peers. This discipline allowed them to quickly scale up talent pipelines when demand accelerated or pause hiring when conditions shifted, without destabilizing the business.

By contrast, many companies without structured scenario models were caught off guard by 2024’s uneven recovery, leading to over or under hiring and subsequent cost corrections.

According to HRO Today Survey the regional execution gaps amplified this effect.

• EMEA leaders reported higher-intensity challenges in three critical enablers: leadership capability, cybersecurity risk, and HR technology usability.
• These factors slowed decision-making and execution, forcing EMEA firms to build tighter operating mechanisms, such as standardized manager toolkits, automated workforce analytics, and stronger governance around technology use, before they could act on workforce plans.
• North American peers generally faced fewer internal execution barriers, enabling faster deployment of contingent talent, internal mobility programs, and targeted external hiring when conditions improved.

Bottom line: Strategic intent is not enough. Agility depends on operational readiness. Having clean data, capable frontline managers, and decision rules embedded in scenario models is what allowed leading organizations to move ahead of market swings.

Key takeaways for HR leadership

Manage headcount plans as bounded options—not fixed commitments

Traditional workforce plans often assume a single hiring trajectory, which creates rigidity in the face of economic volatility. Instead, leaders should approach headcount as a portfolio of “bounded options,” planned flexible ranges based on real-time conditions.

• Setting minimum and maximum for critical roles rather than fixed numbers
• Pre-wiring vendor and contingent workforce channels in each region so they can be activated quickly if demand spikes or paused if it softens
• Embedding scenario triggers (e.g. tariff changes, demand slowdowns, attrition surges) that automatically shift you between base, upside, and downside hiring modes

This approach reduces impact from over or under hiring and keeps cost structures more resilient.

Building Manager Effectiveness to Accelerate Workforce Execution

In the HRO Today survey, manager effectiveness was again one of the top operational concerns globally, and it’s a key driver of whether workforce plans succeed, especially in EMEA where leaders report higher levels of concern than their North American peers. Weak frontline leadership slows hiring cycles, stalls internal mobility, and amplifies attrition risk.
Even the best workforce plans fail if managers cannot translate strategy into local action quickly, especially in volatile conditions where demand shifts quarter to quarter.

To close this gap, HR leaders should:

1. Launch targeted manager development programs

   Equip frontline and mid-level managers with the skills needed for today’s high-velocity environment:

   • Change navigation: managing team performance through organizational shifts, restructures, or new technologies
   • Talent decision-making: making faster, data-informed hiring and promotion choices with less risk aversion
   • Coaching and engagement: building team resilience and psychological safety, critical for retention during uncertainty

2. Deploy AI-assisted workflows and decision dashboards

   Give managers tools that simplify and accelerate decision-making, removing administrative drag:

   • AI-powered requisition approvals that automatically check budget, managerial capacity, and workload balance
   • Internal mobility matching dashboards showing ready-now internal candidates by skill and readiness level
   • Workforce analytics dashboards that display current vacancy days, quality-of-hire, and attrition trends in real time

3. Track manager capability KPIs to see where enablement is working

   Measure and report on the outcomes of your enablement efforts, not just the activity:

   • Span-of-control health: are managers overseeing a sustainable number of direct reports?
   • Time-to-fill: how quickly managers progress candidates through the pipeline
   • Quality-of-hire: retention and performance metrics of hires made under each manager

Linking these KPIs back to your manager development cohorts shows which leaders are turning enablement into performance and where additional support is needed.

These shift managers from chasing data to acting on insights, dramatically shortening the time between talent need and action. Managers implement faster on better data.

Forecasting the Future: Managing Workforce Size in an Uncertain Economy

Data, Scenarios, and Macro Risk

Build your 2026 hiring plans on anchored external baselines rather than assumptions. The European Commission projects EU GDP growth at 1.1% in 2025 and 0.9% in the euro area, signaling a slow but stable recovery. In North America, the U.S. Bureau of Labor Statistics forecasts 6.7 million net new jobs from 2023 to 2033, led primarily by healthcare and social assistance roles. Using these regional projections as guardrails enables you to set credible headcount ranges and stress-test them against upside and downside scenarios.

AI’s Role in Workforce Planning

At the same time, the rapid rise of AI adoption will reshape how work gets done and how much human capacity is required. According to McKinsey & Company, 65% of organizations were already using generative AI by late 2024, up sharply from the prior year. HR leaders should model both automation-driven displacement and augmentation effects, by function (e.g., talent acquisition, analytics, shared services), to understand where AI will reduce headcount needs versus increase demand for higher-skilled, tech-enabled roles.

Regional Perspectives & Industry-Specific Insights

Global Workforce Trends: North America vs. Europe, the Middle East, and Africa

EMEA CHROs are operating with higher execution risk, while North American peers face more cost-side pressure. In the latest HRO Today CHRO Survey, EMEA leaders reported significantly higher concern around leadership effectiveness, cybersecurity risk, and the usability and budget for HR technology, all of which slow organizational responsiveness. These operational frictions increase the lead time needed to scale hiring or reskilling efforts.

North American leaders, by contrast, showed lower operational concern but higher sensitivity to wage inflation, reflecting tight labor markets and cost pressures tied to persistent skills shortages.

Local Policy and Globalization Effects

Macro conditions are amplifying this split. The European Commission forecasts modest EU GDP growth of 1.1% in 2025 (0.9% in the euro area), and while recent European Central Bank (ECB) rate cuts are expected to support activity, lingering trade tensions and energy cost volatility continue to suppress employer confidence.

North American demand remains structurally stronger, especially in healthcare and professional services, according to the U.S. Bureau of Labor Statistics. However, policy uncertainty, particularly around tariffs and immigration, is now introducing more forecast error into workforce plans, complicating headcount decisions even in high-demand sectors.

AI adoption has become mainstream in both regions, with 65% of organizations now using generative AI in HR processes such as talent acquisition and workforce analytics, according to McKinsey & Company. This is further transforming workforce skill requirements and role structures on both sides of the Atlantic

Industry-Specific Hiring: Who’s Growing, Who’s Shrinking? 

• Healthcare & Social Assistance (NA):
  The S. Bureau of Labor Statistics projects that healthcare and social assistance will be the largest driver of net job growth in the U.S. through 2033.
• Advanced Manufacturing (NA):
  Deloitte forecasts that the U.S. will need up to 3.8 million new manufacturing hires by 2033, with 1.9 million at risk of going unfilled without aggressive skills strategies.
• Construction (NA):
  According to Brookings, the construction sector is highly sensitive to interest rates and public investment cycles, with immigration constraints tightening skilled-trade labor supply.
• Retail (NA):
  The Bureau of Labor Statistics anticipates that U.S. retail employment will face long-term headcount pressure due to automation and ongoing channel shifts.
• High-Tech Goods (EMEA):
  The World Economic Forum reports that the EMEA high-tech goods sector grew by 6.7% in 2024, far outpacing the global average.

The Global Talent Divide: Addressing Skills Shortages

Bridging EMEA–NA gaps.

According to the HRO Today CHRO Survey, North American HR leaders focus on closing skills gaps through internal training programs, while EMEA leaders rely more on building talent pipelines through educational institutions.

This difference creates an opportunity: blending the two models reduces risk and accelerates readiness. Companies can reskill their current workforce through internal programs, while also partnering with universities, technical schools, and vocational systems to ensure a steady flow of new talent. This dual approach builds both speed (through internal upskilling) and scale (through external pipelines).

Policy and Education Solutions

The International Labour Organization notes that with global unemployment at historic lows, simply posting job vacancies is no longer effective—talent strategy now determines outcomes.

To stay competitive, employers should:

• Establish employer-led academies to accelerate skills development in critical roles
• Offer dual-track apprenticeships that combine work experience with formal instruction
• Deploy recognized micro-credentials aligned to emerging AI-era competencies like data analytics, automation oversight, and cybersecurity

Together, these measures build future-ready talent pipelines while making roles more accessible to new entrants and career changers in both North America and EMEA.

Regional Workforce Challenges: North America vs. EMEA

NA’s Resilient Job Market vs. EMEA’s Growth Hurdles

North America’s labor market remains structurally stronger, but short-term signals have softened. Sectors like healthcare and professional services continue to drive long-run demand, supporting steady hiring into 2026. However, recent revisions from Reuters and the Wall Street Journal show that job creation in 2024–25 was slower than initially reported, which has increased forecast uncertainty and forced HR leaders to adopt tighter scenario planning.

EMEA faces more fundamental growth hurdles.
The region is contending with sluggish GDP growth, high energy costs, and elevated execution risks. These are all factors that have constrained hiring plans despite isolated sector growth (e.g., high-tech goods).

Bottom line: North America’s market can absorb short-term slowdowns; EMEA’s recovery depends more heavily on policy support and cost stabilization.

Labor shortages, slowdowns, skills gaps differ by region. EMEA faces structurally softer GDP in 2025 with persistent operational concerns (leadership, cyber), while NA’s primary constraint is labor supply and skills mismatch, according to Economy and Finance.

What the CHROs Are Saying (HRO Today 2024-25) graph in article

• Top workforce concern: availability of skilled workers (59% overall; higher in EMEA).
• Retention remains elevated: 54% very/extremely concerned.

• AI acceleration: 65% using AI in HR; TA and workforce analytics lead use cases.
• HR fatigue: burnout is the #1 HR-department concern (41%).
• Regional split: EMEA leaders show higher concern across multiple dimensions than NA peers.

Your 2026 Plan (Practical Playbook)

Build a two-region, three-path scenario set.

• North America:
  The Congressional Budget Office projects modest economic growth alongside persistent labor tightness. HR leaders should prioritize hiring in healthcare, advanced manufacturing, and customer-facing technology roles, while planning for slower net immigration than pre-2024 norms. Workforce plans should be stress-tested against potential tariff or immigration shocks and shifts in the U.S. interest rate path.
• EMEA:
  The European Commission expects GDP growth below 1.2% and highly selective capital investment across the region. Execution risk remains elevated due to gaps in management capability and persistent cybersecurity concerns. Leaders should anchor hiring plans to trade and tariff dynamics, the European Central Bank’s policy path, and volatility in energy and defense costs.

Operationalize skills—don’t just list them.

• The HRO Today CHRO Survey highlights that simply naming priority skills isn’t enough. Stand up an internal academy linked to role taxonomies, treat manager effectiveness as a first-order constraint (especially in EMEA), and instrument progress with workforce analytics. Track leading indicators such as, offer acceptance, time-to-skill, and internal fill rates to guide investment.

 Tighten your immigration & mobility strategy.

• Where U.S. labor constraints persist, divert near-term hiring volume to Canada or EMEA hubs, maintain contractor pools, and use cross-border project staffing to stay agile. The Government of Canada offers employer-sponsored pathways worth revisiting as part of a broader relocation and mobility strategy.

Put AI to work in talent acquisition and planning.

• According to McKinsey & Company, AI is now mainstream in HR. Deploy generative AI in talent acquisition for sourcing, screening, interview scheduling, and internal mobility matching, and build AI-assisted strategic workforce planning models that stress-test attrition, demand shocks, and automation impacts by job family.

Measurement That Matters

Track leading indicators to steer the plan in real time, and lagging indicators to validate its impact.

• Leading indicators show if your talent engine is working now:
  • Offer acceptance % (signals competitiveness)
  • Internal fill rate (shows pipeline strength)
  • Skills attainment time (measures training effectiveness)
  • Hiring manager NPS (reflects process quality)
  • Manager capability index (assesses readiness to execute plans)
• Lagging indicators confirm long-term outcomes:
  • Quality-of-hire at 90/180 days (proves selection effectiveness)
  • Regretted attrition (reveals retention health)
  • Span-of-control health (tracks organizational design)
  • Vacancy-days cost (quantifies productivity loss)

Together, these metrics give HR leaders both early warning signals and proof of ROI—linking workforce plans directly to business performance.

Conclusion

To navigate 2026 successfully, plan your workforce region-by-region using structured scenario planning tools. Begin with a two-region (NA/EMEA), three-path model that:

1. Links macroeconomic baselines, such as EU growth forecasts and S. sector projections, to defined hiring ranges.
2. Incorporates in immigration and demographic constraints to reflect real-world talent supply dynamics.
3. Factors AI-driven productivity gains into role demand forecasts across all major job categories and functional areas.

After building the model, channel resources into skills engines, internal academies, apprenticeships, and credentialing programs, and fast-track manager capability in EMEA to ensure execution keeps pace with strategy.

This region-specific, scenario-based approach moves workforce planning beyond static headcount targets. It gives HR leaders the agility to respond to market swings, the precision to deploy talent where it drives the most value, and the resilience to sustain growth amid uncertainty.