HR can increasingly no longer justify its value through the quality of its processes alone, but must demonstrate how it contributes to the organization's ability to deliver results.

From people management to organizational effectiveness

HR faces a change more significant than the automation of administrative tasks. The fundamental question is shifting: rather than asking how well HR carries out its processes, it is increasingly important to ask how much it contributes to the organization's ability to make good decisions, develop the necessary competencies and deliver results.

McKinsey's HR Monitor 2026 is based on a survey of approximately 1,300 HR professionals and 5,500 employees across ten countries. The findings reveal a gap between organizational ambitions and day-to-day execution. Having data about people is not the same as knowing why work is not progressing, and delivering training is not the same as demonstrating the development of capabilities applied on the job.

Organizations do not always know what they think they know

One of the most striking discrepancies concerns estimates of training participation. HR professionals estimate an average of 6.2 training days per year, while employees report 3.4 days. As many as 24% of employees say they have not participated in any training in the previous twelve months.

Chart 1. Average number of training days.

A discrepancy is also evident in feedback: 20% of employees say they have not had a formal performance or development discussion during the year, while HR estimates that only 3% of employees fall into this category. The questions are not worded identically, so these figures do not prove that the estimates are wrong, but they do warrant examining the consistency of different information sources.

Chart 2. Percentage without a formal discussion during the year, from two perspectives.

This opens up the field of organizational metacognition: how reliably does an organization assess its own capabilities, practices and results? Self-assessments and managers' assessments are useful, but they need to be compared with independent indicators and actual outcomes.

Lower turnover is not proof of a better employee experience

The share of employees planning to change employers in the next six months has fallen from 23% to 17%. This does not automatically mean that satisfaction has increased, because in more uncertain economic conditions employees may stay because a change seems riskier. The research shows an association between these conditions and the intention to stay, but it does not prove that economic anxiety is the sole cause.

Chart 3. Intention to change employers, 2025 and 2026.

For HR, this means that employee retention indicators should be interpreted alongside data on satisfaction, workload, available opportunities and the experience of work. Neither engagement nor the intention to stay is a substitute for understanding organizational productivity. People can be motivated yet still waste time because of unclear responsibilities, overlaps and poor coordination.

Employee development must demonstrate a change in capabilities

McKinsey calls for a shift from measuring training participation to measuring the return on learning. This requires distinguishing between three levels: knowledge acquisition, the transfer of learning to work, and the impact on organizational results. These levels cannot be treated as equivalent.

Communication skills training cannot, on its own, resolve unclear responsibilities following a meeting, just as time management training will not help if priorities keep changing. A development program must therefore begin by diagnosing the problem to be solved and end by checking for changes in on-the-job behavior.

AI is changing the structure of work and how expertise develops

Only 11% of organizations plan their workforce three or more years ahead, while 62% plan no more than twelve months ahead. This is a particular limitation when AI is changing tasks, the allocation of work and the capabilities required.

Chart 4. Share of organizations by workforce planning horizon.

There is a need to move from planning headcount to planning tasks and capabilities. In the survey, problem-solving remains the most frequently selected future skill, alongside the growing importance of digital literacy and reasoning. But an additional development question arises: if AI takes over the tasks through which beginners gain experience, how will future experts develop? This is an analytical implication, not empirical evidence from the report.

The same logic applies to AI training. In Europe, 36% of employees say they use AI daily or several times a week, while 25% have received formal training in generative AI.

Chart 5. Frequent AI use and formal training in generative AI in Europe.

Technology alone cannot fix poorly organized work

The report shows that AI in HR often remains in the pilot phase or confined to administrative areas. Automation can accelerate existing processes, but it will not, on its own, clarify authority, eliminate unnecessary approvals or improve the quality of organizational decision-making. The effectiveness of an individual HR process should not be equated with the overall effectiveness of the organization.

What traditional indicators do not explain

Traditional HR indicators describe turnover, engagement, satisfaction, time to hire, the number of training sessions and job performance. These data are valuable, but they do not always explain why decisions are not implemented, why existing capacity fails to deliver the expected results, or why development does not change behavior.

Information about people, team relationships, organizational coordination, responsibilities, judgment and business results needs to be connected. This is where organizational diagnostics can move beyond describing the current situation to examining the mechanisms that give rise to problems.

The new responsibility of the People & Culture function

HR cannot assume sole responsibility for all business results. It shares that responsibility with executive leadership, managers and business functions, but it must be able to demonstrate which capabilities it influences, through which interventions, and how the effects of those interventions are verified.

Successful recruitment is more than a filled position, and successful development is not a participant count. The real value lies in the organization having the capabilities it needs, applying them at work and achieving better results.

Conclusion

McKinsey's HR Monitor 2026 suggests that HR sits between well-developed processes and underutilized potential to create business value. The key shift is therefore from activities to capabilities, and from describing employees to understanding how the organization functions.

The future value of the People & Culture function will be measured not only by how well it administers people management systems, but also by how much it contributes to the quality of decisions, capability development, execution and organizational results.