Freeths survey reveals employer priorities shifting

Leading National Law Firm Freeths has unveiled its 2026 Employment Survey, providing insights into the evolving landscape of human resources in the UK. The survey is based on the perspectives of senior HR and business leaders from diverse sectors, revealing a workforce environment set for rapid transformation due to upcoming legislative changes, changing employee expectations, and growing organisational complexities.

Among the noteworthy findings, the Employment Rights Act 2025 is anticipated to have a significant impact on employers. Although there is broad awareness of this new legislation, many respondents lack a deep understanding of its implications, and 61% believe it will decrease the UK's attractiveness for investment. Unfair dismissal reform and changes to flexible working are expected to be particularly influential, prompting employers to take necessary steps such as updating contracts and enhancing management capabilities. Additionally, in light of increased powers for trade unions, 27% of respondents indicated plans to alter their collective procedures in 2026.

Another key area of focus is workplace sexual harassment and prevention. Employers are making strides towards fulfilling the duty to prevent harassment, with increases in relevant policies, training, and reporting mechanisms. Last year, 10.5% of surveyed firms noted a slight rise in sexual harassment complaints, while 1.5% reported a significant increase. As the Employment Rights Act mandates that employers take “all reasonable steps” to prevent such harassment, including from third parties, companies will need to emphasise updated policies and training.

The survey also delves into family leave and hybrid working. While most organisations feel prepared for new parental leave rights commencing on day one, a mere 2% plan to enhance pay. Hybrid working continues to pose cultural challenges, with 47% of leaders citing team engagement as a primary concern.

In terms of technology, AI adoption within HR remains minimal and has even slowed in some instances. Only 12% of employers report experimenting with AI for recruitment screening, and there is a lack of preparedness regarding governance and compliance.

Diversity, equity, and inclusion (DEI) priorities have shifted, with neurodiversity and menopause support emerging as focal points for 2026. However, confidence among managers to support employees undergoing menopause is low, with only 12% offering training sessions on the topic.

Moreover, performance management has risen to prominence as a top priority for HR directors, with nearly half of respondents highlighting it as crucial for 2026. This marks a significant increase from the previous year's findings, indicating a stronger focus on productivity and capability-building within organisations navigating cultural shifts.

Despite heightened civil penalties related to Right to Work compliance, many organisations have made no adjustments to their processes. This points to limited awareness of potential risks rather than a lack of confidence among leaders.

Commenting on the findings, Rena Magdani, Head of Employment, Pensions and Immigration at Freeths, emphasised that "this year's survey shows employers bracing for the most significant employment law reforms in a generation." She added that the findings suggest a transformation in organisational priorities, with a greater focus on flexibility, sexual harassment protections, and enhanced people leadership as the Employment Rights Act comes into effect. As organisations prepare for these changes, the coming year will be critical in reinforcing their foundations and equipping managers for a regulated, people-focused era.

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