Promotions and internal hires slowed in 2026, but workers still see lots of upheaval thanks to AI, Workday says

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Everything is happening slowly and quickly all at once.

The labor market’s slowing churn has had many freaking out: Turnover is essentially flat, as hires and total separations (quits, layoffs, firings, retirements) have barely outpaced each other over the last few years.

That slowing movement is reflected in data from Workday’s latest Global Workforce Report. Job creation was down 4% year over year on the tech giant’s own platforms. And an analysis of the same data found that promotions had remained relatively flat year over year: Around 51% of employers increased their promotion rates, while 49% saw fewer. Similarly, 57% of employers made fewer lateral internal hires than the year prior.

While many organizations have seen internal movement stall, they and their employees are currently experiencing a lot of change in their current roles, Phil Willburn, Workday’s VP of people systems, intelligence, and support, told HR Brew.

Big changes. Around 40% of employees said they witnessed reorganizations and restructuring within the last year, Workday’s survey found. Similarly, a Mercer report published earlier this year found that 98% of executives were planning to make organizational design changes within the next two years.

Unsurprisingly, AI is at the forefront of most of this change, particularly as it augments certain tasks and humans’ workloads. Of employees using AI for much of their work, 76% said they expect it will open career opportunities, but 62% also said the technology will lessen the value of their current skills.

“While at the surface level looks calm underneath. Everybody’s trying to figure out: What is the impact of AI? How does it affect the role or job that I have, and how does that impact the value chain?’” Willburn said, adding that employees are wondering: “What does that mean for me in my role, and what does that mean for the company who’s managing this?”

Clashing expectations. At the same time, workers are also getting frustrated over the fact that the traditional ways of growing within a company (i.e., getting promoted or moving into another role) are out of reach. Just 63% of employees said that they see a path to advancement within their current organization, according to Workday’s report.

Of employees who tried to move to another job at their company, 22% said they felt that the process was unfair; another 22% said the role was paused, withdrawn, or changed after posting, and 17% said their managers didn’t support the move. Of those who decided against pursuing an internal job hop, 27% felt there were no attractive opportunities, 15% felt they lacked the skills needed for the roles, and 10% felt they wouldn’t be supported.

There used to be clearer career paths within companies, but AI is changing employers’ understanding of how jobs are structured and performed, and how people can develop themselves to fill those roles, Willburn said. At the same time, organizations are experiencing AI evolution, and they aren’t adequately explaining and guiding workers through these changes, he added.

“I don’t think many organizations are necessarily set up to say, ‘Hey, we’re changing 30% of your role, so this means this,’” he said, adding that there’s an appetite among workers for upskilling, with 65% expressing confidence in adapting new skills required by their roles. “I think there are things that HR professionals and leaders can do to support that, and that’s the moment we’re at. We need more leaders and HR people supporting that type of transformation,” he said.

What to do. Managers and leaders could more effectively support employees by directly communicating with them about how their jobs are evolving, recognizing those who willingly adapt to these changes, and clearly articulating the company’s strategy and helping workers envision thriving in this future, Willburn said. This could help improve employee engagement: Workday found a relationship between workers’ level of management support, recognition, and understanding strategy and their likelihood to recommend their company to others.

It’s also important for companies to give workers agency over their own careers, Willburn said. Some examples of how Workday is doing that with its employees include:

• a “future-proof your career” workshop that prompts employees and managers to think about their desired career path, and work with an AI career coach to help identify next steps over the coming six to 12 months
• “Spark Grants” that afford employees up to $2,500 to help them upskill for their changing roles through external training and programs
• “Everyday AI,” a program through which employees are encouraged to experiment with different tools within Workday’s workflows

“In the age of uncertainty, where things are changing internally, where economic uncertainty exists externally, you need to create a sense of agency for the employee that they have the ability to make decisions for their career,” Willburn said.