HR and People Planning tips for 2026

If you set aside time now to plan ahead, when January comes every employee will know exactly what they need to do to make 2026 a roaring success.

Create a business strategy focused on people

Putting employees at the heart of your strategy gives them clear direction and focus. It creates a business culture and an employee experience in which every individual understands their role and can achieve their goals - personally and professionally. Creating a clear people strategy helps businesses and employees to grow, develop and thrive. We know this because we are HR experts in helping North West SMEs to achieve growth through people development. 

In this blog we explain:

• What to include in your people strategy

• How to use the employee lifecycle to inform your strategy

• The benefits of a values-driven strategy

• How to set realistic goals for your team and organisation

• The key people trends for 2026

• April 2026 changes under the Employment Rights Bill

• The role of learning and development in workforce planning

• Why communication is key to your strategy’s success

What should a successful people strategy include?

An effective people strategy:

• Sets out a clear vision and goals for your team

• Identifies the skills needed to help your business thrive

• Sets out what support or development your people need to grow

• Identifies opportunities for individuals to take on more responsibility

• Suggests ways you can improve and do things differently

• Enables your team to fulfil their potential, feel valued and rewarded.

Take a lead from the employee lifecycle

Whether you already have a people strategy, or you’re starting from scratch, the employee lifecycle is a good place to start structuring your plan. Thinking about the experience at each stage of the employee lifecycle will lead to questions that you can answer within your strategy.

The benefits of a values-driven people strategy

When planning your people strategy consider how it aligns with your values.

Do your company values match your business vision?

It’s good practice to regularly review your company values and the behaviours that sit underneath them to make sure they are fit for purpose. Creating or refreshing your people plan could be the perfect opportunity to do this. Your company values exist to guide your employees in how they go about their work each day. They help to build the culture that will deliver your goals. A slight misalignment may put your strategy at risk.

Every day, employees need to see their leaders consistently living and breathing the values and behaviours you expect from them. This motivates and guides them do the same. If your leaders and/or employees are not on board with your values, perhaps re-engagement activity would be beneficial.  

Values questions to consider:

1. Do you need to adjust or adapt any of your values to align with next year’s people and business goals?

2. How do your company values feed into recruitment activity to ensure you find the right fit employees?

3. What communications and engagement work is needed to create the culture you want?

Set the vision through achievable organisational goals

Company goals provide clarity around the strategic direction of your business and inform individual objectives. High-level goals should be set for every resourced area of your business, including your people.

Research shows that when employees have a clear vision of the future they are much more likely to understand their own role, responsibilities and how you expect them to contribute. Strategic understanding has strong links to higher levels of productivity, motivation and engagement at work. Gallup research shows that highly engaged employees are 18% more productive in sales, and 14% more productive on other tasks.  

The people element of your company strategy should identify the resources needed to help your business, and people, thrive. That might include:

• New recruits

• Skills development

• Training courses

• Coaching and mentoring programmes

• Investment in software, and

• Other third-party support and expertise.

It should also set out the culture you want to create, detailing cultural change work and engagement activity to make that happen and maintain a happy, productive, motivated and fulfilled workforce.

HR Support to achieve your strategy

Each element of your people strategy should be underpinned by internal or external HR support to ensure you have the people and financial resources to achieve your goals. Browse our HR support packages for SMEs.

How to set realistic goals for your team

Individual goal setting conversations are an essential part of people planning. What internal and external resources will you need to help your employees achieve their goals?

It’s important to look back before you set future goals. Reviewing past and present performance builds a picture of where you want to be, both personally and as an organisation. For example, reviewing past performance with a team member can highlight skills gaps that go on to inform their future goals and objectives. At company level, systems that currently work well/common recurring issues should also inform your future approach.

Setting individual goals for your team

Throughout the year, every line manager should have performance review meetings with their line reports. These meetings are an opportunity to discuss individual progress and achievements against goals.

It’s natural for these conversations to drift into career aspirations and/or objectives for next year. If you can, try to separate past performance from future goals. Take useful notes and organise a separate meeting to discuss objectives and goal setting.

Individual goal setting conversations may cover:

• Organisational context and generic strategic goals for all employees

• Any objectives not fully achieved from last year

• Career aspirations and steps or actions needed to get there

• Skills and personal development areas of improvement

• Challenges and expectations for both manager and employee

Between you, agree a mix of achievable short-term and long-term objectives. A series of small actions could set someone on the path to achieve a much larger goal, such as a promotion. It’s useful to break each objective down into individual actions and small steps to reaching it. Once agreed, all that’s left is to formalise and document each set of individual goals, ready to take action.

SMART or PACT goals?

Traditional goal setting is based on SMART principles. That is, setting goals which are Specific, Measurable, Achievable, Relevant and Time-based. However, some people believe SMART goals are outdated, e.g. not all goals can be easily measured or completed within a year, and setting deadlines and missing them can become demotivating. PACT is an alternative, low-pressure, less detailed approach. It’s about setting goals that are Purposeful, Actionable, Continuous and Trackable.

Whether you prefer a structured or flexible approach, goals should always be based around things you can control. There is little point in setting a complex goal when there is no support to achieve it. Goal setting must always be realistic and achievable, with some flexibility built in.

People trends for 2026

Understanding the wider business and HR context can inform your people plans. These are some of the latest HR trends to consider for the coming year.

Employment Rights Bill

Several Employment Rights Bill measures are due to come into effect in April 2026. These include:

• Paternity and parental leave

• Statutory sick pay

• Sexual harassment whistleblowing

• Collective redundancy protective award.

As an absolute minimum, SMEs should review employee contracts to ensure compliance with these new measures. For more on these changes and what they mean for people planning, see Employment Rights Bill: Important Actions for Employers.

Following the Autumn Budget, the government backtracked on its pledge to give all workers the right to claim unfair dismissal on day one of employment. In the revised plan, the qualifying period will reduce from two years to six months. This makes it even more vital for employers to provide line managers with training and new starters with a robust welcome and induction process.

Flexible working

Another change expected in 2027 under the Employment Rights Bill is to consideration of flexible working requests. While details are long away off being finalised, if your SME does not yet have a flexible working policy in place, consider introducing one in 2026. Flexible working arrangements can be a huge draw to job seekers and now considered a core employment benefit.

Diversity, Equity & Inclusion (DEI)

DEI initiatives are also an attractive proposition for job hunters and should form part of your people plans. How will you create an inclusive workplace culture where every employee can flourish and be their very best at work? Prioritising DEI helps reduce inequalities and has a positive impact on employee wellbeing, creating the conditions for employees to become more efficient and effective in their roles.

Apprenticeship funding

The Autumn Budget provided encouraging news for SMEs wanting to take on apprentices with the cost of training for under-25s set to be fully subsidised from April 2026. When planning your people strategy, consider the experience of an apprentice joining your company. Do you have a proper induction process, mentoring support, clear career pathways and long-term prospects for apprentices?

National Minimum and Living Wage increases

The National Minimum Wage and National Living Wage will both increase from April 2026. An 8.5% increase in National Minimum Wage will benefit young workers (age 18-20), while the National Living Wage is set to increase by 4.1%. In terms of people planning, employers need to factor in rising payroll costs in their budgets, especially in sectors with high youth employment where the impact will be more noticeable.

Income tax and NIC thresholds

Tax thresholds are set to be frozen until April 2031. While there are no immediate impacts for HR teams to address, communicating what this means for employees will be key. In the long-term, more employees will move into higher tax bands as their salary increases. Consider how you will approach these conversations and any additional training managers may need to support them.

Skills-based job design

A new workplace trend is seeing employers move away from job titles to a skills-based approach. Roles are mapped to specific skills, allowing more flexibility and creating clearer career paths. It can be a time-consuming exercise to map out the skills required for each role, and may require investment in reskilling and upskilling, but the benefits can be great. Skills-based job roles can improve talent attraction and retention rates, and research shows it can improve innovation, response to change, and enhance the employee experience.

Job hugging

Job hugging is the growing trend of employees staying in roles they dislike. Almost half of workers polled in Monster’s 2025 Job Hugging Report said they intend to stay in their current job due to fear and economic uncertainty, while 75% said they plan to stay for another two years. While employers will look upon such high retention rates as positive, job hugging creates hidden disengagement risks.

Staying in a job purely for comfort and security, not through personal passion and desire to contribute, impacts company culture. Increasing risk aversion and employees being overly cautious may have a detrimental impact on innovation and on overall productivity, while people staying in roles they dislike can impact motivation in colleagues.

Rebuilding leadership capability

As well as communicating the forthcoming changes under the Employment Rights Bill, what training do your middle managers need support to help in 2026? Popular training themes include leading hybrid teams, effective wellbeing conversations, and cultural alignment.

Artificial Intelligence in HR

The role of AI in HR is a continuing theme for 2026. New technologies can help streamline data management and inform people decision-making. If you’re already using online software to collect and manage people data, you have a mine of information to inform your strategy, from pension take-up rates and employee reward and recognition to learning and development and absence management records.

AI is an enabler, so if your SME is not yet using it, now is the time. How will you implement AI tools to support people processes? We recommend starting small, e.g. automating manual repetitive tasks, testing recruitment screening tools. Build in the necessary IT skills development to your people plan to ensure correct, safe, and efficient use of digital tools.

Employee feedback

Employee surveys provide valuable data on how people are feeling about the employee experience and company culture at a given point in time. And they are not just for big businesses - SMEs can gain valuable insights into levels of satisfaction and engagement at work. Will this be the year to launch your employee engagement survey?

Workforce demographics

Workforce demographics can tell us a lot about the characteristics of your teams. An employee’s age and length of service could offer insight into their career aspirations and training and support needs. Understanding the characteristics of your workforce can also help with succession planning.

Consider the differing support and development needs of younger employees versus older employees. Each generation may have a different outlook on what’s important to them in their life and career. This is your opportunity to get to know them.

Securing people data

With data breaches, hacking and phishing attempts all on the increase in 2025, securing and protecting personal data is a key HR responsibility. 283,000 businesses were victims of at least one cyber crime in the past year. Identifying vulnerabilities in your people systems, implementing access management, such as two-factor authentication, staff training and updating related employment policies.

Learning and development in people strategy

Identifying and resolving development needs should be a red thread running through your people strategy. Learning and development will underpin every action you set out to achieve. Make sure to set aside sufficient budget to provide relevant and valuable learning opportunities to keep employees motivated and engaged. 

Consider these five aspects of learning and development:

1. Accessibility and inclusion: Learning and development should be accessible, inclusive and open to everyone. It’s good practice to provide a variety of learning solutions to cater for all needs and preferences. These might include independent online learning, webinars, in-person workshops, one-to-one coaching, mentoring and on-the-job training.

2. Identify skills gaps: Consult with line managers and explore your employee data. Is there an area of the business where flight risk is elevated? If so, what action can you take to keep those employees happy, engaged and satisfied at work?

3. Succession planning: Do any employees have the potential to develop into more senior roles as your business grows? Line managers should be able to identify those individuals and their training needs to retain top talent within the organisation.

4. Support for line managers: As organisations evolve employees may find themselves in positions with line management responsibilities but without the skills to carry out their role effectively. Support, development and upskilling opportunities for line managers should be a feature in your people plan - you need them to manage high-performing teams.

5. Responding to ongoing needs: Build flexibility into your plan and budget to respond to changing needs within the business. Change is inevitable. You will take on new employees and say goodbye to others. Learning and development provision needs to adapt to ensure your people and business are equipped for the future.   

To understand how to embed upskilling into your people plans, take a look at our learning and development solutions.

The critical task of communicating business strategy

Once you have created your people strategy, you need to communicate it effectively to ensure everyone understands the detail and their role in bringing it to life. Senior managers and directors, middle managers, people managers, employees and HR colleagues all need to receive and understand the message. What they need to know depends on their level of knowledge and involvement.

When employees understand the strategy, they gain purpose and motivation, which in turn builds the organisational culture you aspire to create. For example, access to training and development will help colleagues to set personal goals and targets to take advantage of this. Or an employee might be motivated to do their best with the goal of applying for a newly created role. People with purposeful objectives are more productive and engaged to contribute to business growth and success.

The role of line managers in communication

Line managers have a responsibility to communicate your people plans to their teams. Are they equipped to do this effectively? Does your people strategy include plans for development to improve the way managers communicate and lead their teams?

Engagement activities

Think about the different channels you can use to get your message across with impact. Traditional tools such as briefings and emails still have their place, but could a snappy animation or a hands-on team activity land your message with more impact?