Progressive Discipline: Pros, Cons and Best Practices
By Kristen Jonas, HR Consultant, Kinesiology HR LLC
Early in my career many or most had the impression that Human Resources was part of a dystopian society, relishing in oppressive policies intended to make the workplace miserable. Employees called our department the “Principal’s office” because surely HR Managers sat in our offices waiting for employees to misstep so we could pounce and “write them up”. We have come far in that notorious impression. In fact, the title “Business Partner” is a common way of communicating; we are collaborators in the workplace.
When it comes to a Progressive Discipline Policy I am all for it. It provides a solid foundation, with clear progression of actions, for what to do when employees disregard workplace rules. It typically goes verbal warning, written warning, suspension, termination. As with most policies, we have pros and cons.
Talent Trends Impacting Workplaces in 2026
The new year is right around the corner, and the labor market is undergoing a profound transformation shaped by economic uncertainty, technological acceleration and shifting employee expectations.
For employers, understanding these dynamics is essential to navigating talent and workforce development in the year ahead.
Employee Retention
One of the most worrying trends heading into 2026 is the growing disconnect between job stability and employee satisfaction. A recent report from HR software company Leapsome revealed that while 54% of employees are staying in their roles for stability, 1 in 3 employees are actively considering leaving due to disengagement and lack of fulfillment.
Another factor to consider is that trust in HR is waning, particularly among nonmanagerial staff. The Leapsome survey further revealed that nearly half (46%) of employees do not view HR as a trusted advocate, citing concerns over transparency and protection of company policies. Furthermore, 1 in 2 non-managers don’t trust HR to protect them from harmful policies.
Retention metrics may appear stable, but beneath the surface, motivation and performance are wearing down. Employers must prioritize reengagement strategies, such as career development, transparent communication and manager-led performance routines, to reignite purpose and productivity. Finally, 2026 is poised to be a critical year for rebuilding trust for many organizations, but progress can begin now.
Artificial Intelligence (AI) Adoption
AI investment and adoption have been accelerating in recent years, and employers are focusing on more ways to replace workers with technology. A Resume.org report from September 2025 revealed that nearly 3 in 10 companies have already replaced jobs with AI, and about 4 in 10 plan to do so by the end of 2026.
Additionally, Goldman Sachs Research noted that AI adoption is expected to have a modest and temporary impact on employment levels. It estimates that unemployment will increase by half a percentage point during the AI transition period as displaced workers seek new positions.
As AI adoption increases, the impact on jobs will largely depend on how employers leverage the technology in their regular workflows. Many may focus on how AI can enhance human potential rather than simply replacing it. Employers will need to navigate the delicate balance between technological efficiency and workforce sustainability as the adoption of these technologies increases.
Compensation Planning
Salary budgets are expected to rise modestly in 2026, with U.S. employers forecasting average increases of 3.4%, according to a survey from The Conference Board. Both Mercer and Payscale noted an average increase of 3.5% for next year. These figures are slightly below 2025 levels. Economic caution and reduced competition for labor are influencing these decisions. In fact, 6 in 10 companies cite economic uncertainty as a key restraint to their hiring and salary decisions. Some organizations are moving more slowly to fill positions left open by employees and may allocate their salary budgets more for internal investments, such as employee development.
Compensation strategies should be aligned with performance, market benchmarks and employee expectations. Total rewards packages, including benefits, flexibility and career growth, will play a critical role in attracting and retaining talent.
Gig Work
The labor market is showing signs of softening. Unemployment has ticked up, and job creation has slowed across certain sectors, including manufacturing, retail and hospitality. Employers are increasingly relying on gig, contract and temporary workers to maintain workplace agility without long-term commitments.
Workforce planning in 2026 will demand flexibility. Organizations may need to explore scalable staffing models, including project-based roles, while maintaining a strong employer brand to attract top talent in a competitive landscape.
Looking Ahead
In 2026, organizations will be challenged to rethink traditional workplace models and adopt greater adaptability. Success will hinge on the ability to balance technological advancement with human connection, economic caution with strategic investment and short-term agility with long-term vision.
The Impact of the Growing Gig Economy
The gig economy is a system in which organizations engage individuals, often through digital platforms or intermediaries, for temporary or task-based work, rather than relying solely on full- and part-time employees. It’s quickly becoming a key component of the economy.
According to Statista, more than 70.4 million Americans are currently involved in freelance work. By 2027, freelancers, gig workers and crowd workers are expected to become the majority of the workforce.
Organizations are increasingly turning to gig workers to meet labor demands as they navigate shrinking budgets and evolving workforce expectations. The rise of gig work presents a complex mix of opportunities and challenges for employers.
Here are potential benefits of gig work for employers:
- Cost savings for some roles or tasks since employers are not required to provide benefits such as health insurance, paid leave or retirement contributions to independent contractors
- Scalability and flexibility due to project needs or seasonal shifts, without long-term commitments
- Access to specialized talent through gig platforms
While the gig economy offers flexibility and cost savings, it can also introduce the following challenges for employers:
- Weaker organizational ties due to gig workers’ independence
- Unique compliance considerations, as gig workers fall under “independent contractor” status
- Strain on full-time employees who are also doing gig work, as they may become less available for overtime, more fatigued and potentially less engaged
- Balancing dual roles as employer and client, which adds complexity to workforce planning
Employer Takeaway
The rising number of workers participating in gig work is an inevitable trend that labor experts predict will continue to grow. Employers should continue to monitor labor trends and consider what practices make the most sense for their organizations.
Why Health Care Costs Are Increasing in 2026
Health care costs have been growing at an alarming rate in recent years, and they’re not slowing down.
Surveys project that U.S. health care costs are likely to increase by 6.5% to, in many cases, over 10% in 2026.
Regardless of the exact figure, employers can expect their health care costs to continue to skyrocket throughout 2026. As the next year approaches, many employers remain curious about what is driving these increases.
Here are key factors impacting rising health care costs in 2026:
- Specialty medications, specifically glucagon-like peptide-1 (GLP-1) drugs—High-cost, high-impact treatments, such as GLP-1s, biologics, biosimilars, and cell and gene therapies, are reshaping the pharmaceutical industry. The momentum behind specialty drug innovation shows no signs of slowing.
- Chronic health conditions—About 90% of health care spending is for people with chronic and mental health conditions. Moreover, many people have two or more chronic, high-cost diseases.
- Aging populations—Health care costs generally increase as people age. While life expectancy has increased significantly over the past 50 years, birth rates have trended down consistently.
- Cancer care—This has been the top driver of employer cost increases for four years in a row. Spending has worsened due to the growing prevalence of cancer diagnoses and the escalating cost of treatment.
- Health care labor costs—The worker supply continues to fall short of the growing demand for utilization.
Offering quality health care to employees carries a significant financial cost for organizations. It’s more than just organizations that pay the price for growing health care costs; such expenses are often shared between employers and employees.
Rising health care costs may be unavoidable, but informed employers can better understand these trends and act appropriately.