Your managers are the system.
They hire, give feedback, and decide who gets developed and who gets passed over. And now, increasingly, they are the ones interpreting AI-generated data to make those calls.
So before you add another tool to their workflow, how ready are they, really?
Our 2026 Talent Trends Report, based on responses from 451 contributors across 21 industries, found that AI adoption in talent strategies more than doubled in a single year, jumping from 17.9% to 42.3%. That is a remarkable shift. What is not keeping pace is the leadership capability required to use it well. Formal career development has stayed below 50% for five consecutive years. Only about half of organizations consistently train managers on interviewing and people decisions. And in a small or midsize business, that gap lands squarely on your managers.
Here is what the data shows, and what you can do about it.
Want a quick overview of the full Talent Trends insights?
View the Key Findings
Why AI Adoption Is Outpacing Leadership Readiness in SMBs
The good news first: leaders are genuinely trying harder. More organizations are holding regular one-on-ones, running employee satisfaction surveys, and collecting structured exit data. Those are real improvements, and they matter.
But doing the activity is not the same as doing it well. According to Gartner’s 2026 CHRO Priorities Report, most organizations struggle not because their strategy is unclear, but because leaders lack the consistent capability to execute it at scale. The gap between intent and execution is where most of the damage happens.
As BCG’s AI at Work research consistently shows, technology initiatives succeed when leaders actively shape how decisions are made and how change is managed. When employees have strong leadership support, their confidence in AI rises dramatically. That is not a technology challenge. It is a leadership and culture challenge.
In small and mid-sized businesses, this matters more than anywhere else. You do not have layers of HR support to absorb inconsistent management. Your middle managers are the ones hiring, running one-on-ones, making promotion decisions, and delivering feedback. When their approach varies from team to team, so does the employee experience. And that inconsistency, even when unintentional, gradually erodes trust.
Want to see how this fits into the broader trends shaping talent decisions?
View the Key Findings
Are Your Employees Engaged or Just Watching to See What Happens Next?
One of the more nuanced findings in this year’s data is what I think of as conditional engagement. Employees are not checked out. They are staying, but they are paying close attention to whether leadership actually follows through.
The ManpowerGroup 2026 Global Talent Barometer adds helpful context here. While AI usage among workers has grown significantly, worker confidence in using that technology has declined for the first time in three years. People feel capable in their current roles but increasingly uncertain about what comes next. That uncertainty does not always drive people out the door right away. It drives them inward, watching leadership for signals about whether they have a future here.
Our data tells a similar story. Internal movement has increased steadily over five years. Employees are not waiting for development systems to mature. They are creating their own growth by changing roles and teams, often without clear expectations about what success looks like in the new seat. That is not always a red flag, but it does raise a question worth sitting with: is your internal mobility a sign of health, or a sign that people are searching for something your current structure is not providing?
Understanding how your leaders are naturally wired, their leadership personality styles and behavioral tendencies, is one of the most practical things you can do here. When managers understand how they communicate and make decisions, and how that lands with different people on their teams, engagement conversations become far more productive. Team dynamics improve. Trust builds more consistently over time.
What Does Internal Mobility Actually Signal in Your Organization?
When employees cannot grow up, they grow sideways. That is the pattern we have seen consistently across five years of Talent Trends data. Internal mobility has increased, but formal career development has not kept pace. Most organizations still rely on informal or casual development approaches, which means employees are largely figuring it out on their own.
Korn Ferry’s 2026 Talent Acquisition Trends Report raises a related concern worth noting. As companies reduce entry-level and operational roles in the name of AI efficiency, they risk hollowing out the pipeline that produces their future managers. The people who learn every process, who understand how the business actually works from the inside, those are the people who become your team leaders. Short-term efficiency decisions made without a development lens can quietly become a readiness problem a few years down the road.
In an SMB, every internal move carries more weight. With fewer roles and fewer layers, a misplaced person affects the whole organization, not just one team. Using an employee development assessment before moving someone into a new role gives you a clearer picture of how their strengths align with what that role actually demands. It replaces guesswork with a grounded conversation.
What Skills Do Managers Actually Need to Lead Well in an AI-Driven Workplace?
This is the question most organizations are not asking loudly enough. There is a lot of focus on which AI tools to buy. There is considerably less focus on whether your leaders are ready to use those tools responsibly once they have them.
Korn Ferry’s research found that 73% of talent leaders rank critical thinking as the most important skill needed in 2026, ahead of AI certifications and technical expertise. The reasoning is straightforward: most people can learn to use a tool. Far fewer can consistently evaluate what the tool is telling them, spot the flaws, and know when to trust the output and when to override it. That judgment is what separates a thoughtful people decision from a costly one.
The encouraging news is that organizations are starting to invest here. Manager training on interviewing and people decisions showed one of the largest single-year improvements in our study. Leaders are beginning to recognize that sound judgment, communication, and fairness need to be built deliberately, not assumed.
Gartner’s Future of Work Trends for 2026 makes a similar observation. The organizations that will move ahead are those that prioritize people who can think critically about how work gets done, and develop leaders who can make accountable decisions in a human-machine environment. The technology is not the differentiator. The judgment behind it is.
How Do Behavioral Assessments Help Close the Gap Between AI Adoption and People Readiness?
This is worth addressing directly because it often gets framed too narrowly. An employee behavioral assessment is not just a hiring filter. Used well, it becomes a decision-making resource you can draw on at every stage of the employee lifecycle.
When you understand how someone is naturally wired, how they approach assertiveness, collaboration, pace, and structure, you can make better talent decisions throughout their time with your organization. Here is what that looks like in practice:
- Hiring: Match candidates to the behavioral demands of the role, not just their resume or interview performance. A behavioral assessment reduces the likability trap that trips up even experienced hiring managers.
- Onboarding: Use behavioral data to tailor how you bring new hires in, based on how they learn and what they need to feel supported early.
- Development: Build growth plans that work with someone’s natural strengths through an employee development assessment, rather than coaching them into being someone they are not.
- Internal movement: Before moving someone into a new role, assess behavioral fit against that role’s specific demands. It turns a gut-feel decision into a grounded one.
- Leadership development: Help managers understand their own leadership personality styles so they can adjust how they communicate and motivate across different team dynamics.
- AI readiness: Assess cognitive capacity and behavioral clarity to understand which leaders are ready to interpret AI-generated insights responsibly, and where additional support would help first.
Assessment use has grown meaningfully in our study, with more organizations now using them for development, self-awareness, and benchmarking top performers, not just for initial selection. That shift reflects something important: if you want consistent, defensible talent decisions in an environment where AI is surfacing more recommendations, you need objective behavioral data underneath them. These are your employee retention tools working the way they should, grounded in science rather than good intentions.
Your AI and People Readiness Checklist
Before investing in more technology, it helps to check the human foundations first. These are the areas that most directly determine whether your tools deliver or fall short.
Leadership Foundation
☐ Do your managers conduct regular, structured one-on-ones, not just when something goes wrong?
☐ Are your leaders trained to conduct effective interviews and make consistent, thoughtful talent decisions?
☐ Have you assessed your managers’ leadership personality styles, so they understand how their behavioral tendencies affect their teams?
☐ Can your leaders explain their people decisions clearly and stand behind them when asked?
Engagement and Trust
☐ Do you run employee satisfaction surveys and act on what you learn?
☐ Do you collect structured exit data and use it to identify patterns over time?
☐ Do you know why employees are moving internally? Is it driven by growth, or is it a signal worth paying attention to?
☐ Are you using employee behavioral assessments to align roles with how people are naturally wired, not just their interview performance?
Development and Employee Retention Tools
☐ Do you have a formal career development process, or are you relying on informal conversations that happen when someone gets frustrated?
☐ Do you use employee development assessments to build personalized growth plans based on how each person thinks, communicates, and makes decisions?
☐ Have you benchmarked your top performers to define what behavioral success looks like in each key role?
☐ Before moving someone into a new role internally, do you assess their behavioral fit against that role’s specific demands?
AI Readiness
☐ Do you have clarity on which talent decisions AI should inform versus which require human judgment alone?
☐ Are your leaders equipped to interpret AI-generated insights about candidates and employees and translate them into fair, accountable action?
☐ Is your AI adoption strengthening your team dynamics, or adding speed to a process that was already inconsistent?
The Bottom Line: AI Gives You an Advantage, But Not Without Prepared People
Five years of Talent Trends data points to the same conclusion: the organizations that thrive are the ones that turn intent into disciplined, human-centered execution.
Performance in 2026 and beyond will not be determined by who adopts the most tools or moves the fastest. It will be determined by who builds the strongest human foundation underneath their technology. Leadership behavior, decision quality, and trust are not just supporting elements of a good strategy. For small and mid-sized businesses, they are the strategy.
Three questions worth bringing to your leadership team:
- Where is our leadership effort focused, and is it producing consistent results across every team?
- Where is internal movement signaling uncertainty rather than growth?
- Are our leaders prepared to explain and stand behind people decisions as AI becomes more embedded in how we work?
If any of those give you pause, that is a good place to start.
We built Omnia to help leaders answer those questions with data, not guesswork. For over 40 years, we have helped businesses hire with confidence, develop people with purpose, and build the kind of consistent leadership that earns trust. If you want to talk through how these trends are showing up in your organization and where behavioral assessments can help, we would love to connect.
Reach our team at omniagroup.com or call 1-800-525-7117. Real humans will pick up the phone.
