Employee engagement in 2026: 10 things to watch

Here's 10 things I believe will be worth watching as 2026 unfolds.

Let's get into it!

1. Psychosocial safety regulation becomes a real focus

It feels like awareness of the Work Health and Safety (Managing Psychosocial Hazards at Work) Code of Practice 2024 is finally spreading. When we first started talking about it at events a few years ago, hardly anyone had heard of it, let alone understood that psychological risks need to be proactively managed with the same seriousness as physical ones. But now the cases are no longer theoretical as we see more stories in the media about interventions and improvement notices.

One practical step many organisations will take is following the guidance in the code by using validated employee surveys to pinpoint risks, then real-time pulse checks to catch issues early. The code even spells this out. Section 3.2 on identifying psychosocial hazards specifically recommends using “surveys and tools.”

So I expect more organisations will put a real focus into building the compliance evidence they need, as we move through 2026.

2. Hybrid work continues to shift

Hybrid work is still evolving. Just read the social media comments on any story about working from home to see the ferocity of debate. Not fun!

We know Victoria has already proposed new laws that would give people the right to work from home for at least two days a week if their role allows it. Interestingly, performance data keeps challenging assumptions too. I read about a recent poll just this week by Wiley Workplace Intelligence that found that 85% of remote workers said they were part of high performing teams, compared with 79% of office based employees.

So I expect the debate to continue in 2026 along with a need for dialogue, visibility, trust and team connection too.

3. Talent attraction, retention and job hugging

Over the coming year I expect talent trends will keep pulling in a few directions at once, which makes it harder for leaders to read the room. Plenty of people will still look for new roles, but the numbers are easing off and job hugging is showing up more often. This is usually tied to nerves in a tougher job market rather than strong engagement with a role.

To cut through the noise, more Teamgage customers are turning to our demographic filters to see what’s happening by length of tenure. It can reveal patterns they'd never spot on the surface. Are their new starters bringing a burst of ideas, calling out onboarding gaps and giving clues about how well they’re attracting and settling talent? And at the other end, are their long-tenured employees responding at lower rates and showing hints of job hugging, or is all of that deeper experience shining through with thoughtful insights?

Whatever the answer, getting that visibility gives leaders the confidence to manage the right talent trends over the next 12 months.

4. Generational differences in feedback strengthen

Speaking of demographics, our own generational research at Teamgage earlier this year, looked at the regular feedback from over 4,000 Australian employees. This showed that younger generations have the highest participation rates in workplace surveys. After all, they've grown up in a digital world where they've always had a quick and simple online option to share their opinions.

With more young employees entering the workforce in 2026, I expect the demand for real-time digital engagement channels to become even greater.

5. Workload management becomes a focus

The same research highlighted a very consistent concern across all age groups with workload pressure showing up as a major theme. Whether someone is early in their career or nearing retirement, they're often feeling the stretch.

In 2026, I think workload will need more active monitoring to help identify any pressure points before they turn into stress, burnout and ultimately a psychosocial claim under the code of conduct already mentioned.

At our recent Teamgage event with Dr Jen Frahm from the Agile Change Leadership Institute, she went further and said that "Change triage is going to be our skill for 2026. Work overload has been a universal pain point in 2025 and as a leader you need to be good at using data to inform your decision making around change prioritisation."

6. AI shifts from automation to insight

AI is already helping HR in practical ways and I see it every day at Teamgage. When leaders have to sort through thousands of survey responses, AI has cut that analysis time right down. It brings the key patterns to the surface in seconds and refocuses leaders away from a handful of noisy complaints and back to the bigger picture.

And in 2026 AI will move even closer to the source. At Teamgage it will start helping employees write survey responses that are more clear, concise and constructive right at the point of submission. That means leaders spend less time trying to decode vague or negative comments and more time working with ideas and insights that can genuinely move the organisation forward. Love that!

7. Follow through on surveys becomes non negotiable

Employees are now expecting a lot more from the workplace surveys they're asked to take part in. They want a regular voice and they want to know what happens next. Is that linked to some of the workplace generational change we mentioned earlier? Absolutely!

At Teamgage, I've seen this shift up close and the platform has moved to meet that demand. For example, over the course of 2025 we introduced new features that let leaders share results more clearly, create actions directly from specific comments and even chat securely online with anonymous respondents about ideas raised in surveys. Leaders are already using these tools to say thanks, ask for extra detail or offer context.

I expect a big rise in these conversations throughout 2026 as every effort is made to close the loop on survey feedback.

8. Traditional surveys alone will feel too slow

Does anyone think things will slow down in 2026? If not, relying only on a long annual survey that takes months to act on is becoming less acceptable. Many of the issues raised in January probably won't be the same just a few months later.

What I'm seeing from our customers is the deployment of a mix of methods here. A deep engagement survey at key points in the year, combined with fast, bespoke pulse checks that capture what's happening right now.

This helps to meet many of the other areas to watch out for in 2026 including psychosocial compliance, productivity improvement, talent attraction, retention and more.

9. Productivity concerns increase the need for engagement

Australia’s productivity slowdown is well documented. ABS data shows that long term productivity growth has fallen to around 0.8% on a 20-year average. This creates real pressure for improvement in 2026.

The connection with engagement is simple. When people don't feel heard, ideas stay hidden, blockers stay unresolved and innovation stalls. When people do feel heard and trusted, they contribute more openly and teams find better ways to work.

In 2026 employee engagement needs to stop being just thought of as a "HR thing" and something that the whole organisation can leverage.

10. HR becomes even more strategic

With that in mind, I believe 2026 will also be a year where HR takes an even stronger seat at the strategy table. Better tools and better engagement systems are giving HR reliable, real-time data that can support more confident decision making.

In our latest customer story with Fragile to Agile, we heard how leaders used solid employee feedback numbers to escalate issues more effectively and "to build a business case for change". This was instead of "relying only on opinions or gut feel."

This is the shift I expect to see across many organisations, with HR using this data to anticipate risks, guide leadership conversations and drive the changes that improve both performance and wellbeing.

It sounds like a pretty good reason for optimism as we move into 2026.

Here’s to the year ahead.