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The Chinese zodiac predicts that 2026 will be the Year of the Fire Horse, symbolizing bold decisions, ambition and sharply moving away from the strategic thinking that was 2025, the Year of the Wood Snake.
For both the employer and the employee in India Inc, there will be three prominent trends, says experts. The spotlight will shift to smaller cities and towns as companies look for the right talent and metros lose their lure. The second change will be the dominant role that the gig workforce will play. Thirdly, the deployment of artificial intelligence (AI) will remain an integral aspect of the workplace in the coming year with concerns on how to upskill employees without letting go of the high performers.
Hinterland hiring
About 18 months ago, recruitment firm CIEL HR opened a hiring hub in Patna where 25 recruiters scout for talent from neighbouring Chhattisgarh and Odisha states and the smaller towns of Bihar. The aim was to cater to the hiring needs of retail, financial services, consumer goods, and manufacturing clients. A similar hub was created earlier in Mysuru in Karnataka as well to tap into IT talent.
“The demand from smaller towns will grow because the total cost of hiring and retaining an employee is 5-10% lower in the longer run for companies as those who migrate can be held onto for a longer period than those who are from the larger metros with their offices and homes in the same city,” said Aditya Narayan Mishra, managing director and chief executive officer of CIEL HR.
The total cost of hiring denotes the overall financial implications of an employee during one's tenure. In this case, it will include investments in upskilling the employee and how their productivity impacts the firm.
Mishra pointed out that companies have started employing a blended workforce where a major chunk will be from the same city, 20-25% from nearby towns and the rest from other states. This is largely in the case of temporary staffing, where the employee works at the client's site but will be on the payrolls of the vendor.
Over the past couple of years, staffing firms found it difficult to get workers for the peak sale period (August-December) as the workforce demanded higher wages for relocation to the larger cities. A similar challenge will continue in the coming year.
Gig workforce to gallop
Cost pressures on companies will force more gig hiring across the skillset spectrum. Until now, the spurt in gig hiring would come on the back of festive season recruitment, but with the implementation of the labour codes, the benefits for gig workers are cemented.
Online food delivery, e-commerce and quick-commerce companies will now have to allocate up to 2% of their annual turnover for the welfare of gig and platform workers. In November, the ministry of labour and employment announced that with the new reforms, all workers would get benefits such as retirement savings via provident fund, coverage under the Employees' State Insurance Corporation, other insurance and social security benefits. Therefore, there will be a larger number of the informal workforce aiming to enter the gig economy.
While on a vendor's payroll, gig workers take up short-term projects that could be for a few hours or days and they can work across platforms. Dark stores, retail and logistics are some of the segments that hire gig workers on a large scale. The country’s gig workforce is projected to grow from 10 million in 2024-25 to 23.5 million by 2029-30, according to a Press Information Bureau note on 30 August.
"Gig will continue to grow in scale as more people will be eager to join this workforce after new labour codes giving them the social security cover along with blue collar and even white-collar gig roles will scale up," said Lohit Bhatia, CEO-designate for Quess Corp.
Blue-collared workers are typically employed in the automotive and manufacturing sector while white-collared find a job in services.
AI in the office
In 2025, companies including Amazon, Tata Consultancy Services, Google, Microsoft and Meta retrenched employees, citing AI. Companies are in a flux as they scamper to upskill employees on the latest in technology. They are hiring candidates who have the prowess on AI and at the same time, letting go of those who are in the bottom rung of the skillsets. There is a stress that has built up across industries and will play out in the coming year as well.
"I do not expect AI’s impact on workplaces to stabilize or 'calm down' after the layoffs we saw in 2025. The 2025 layoffs were not only about cost-cutting – they were about restructuring work around AI systems. In 2026, in my view, that process will deepen," said Rohini Lakshane, a technologist and researcher.
Lakshane said companies will have to take note of how they inform and discuss with their workforce the changes in profiles because of AI.
“Jobs will not vanish in waves, but they will be hollowed out, with fewer people doing more work, assisted and monitored by AI. Tasks within roles will be automated, recombined or shifted. If that is done without clear communication to workers, it creates insecurity even when employment technically continues," Lakshane said.
With increased automation, the pressure on employees will go up as well.
"Workers who can design, audit or manage AI systems will remain in demand. For highly skilled professionals, especially in technology and analytics, 2026 will look calmer on the surface, but expectations might rise sharply. Fewer people doing more work, assisted by AI tools, with thinner margins for error," said Lakshane.
Ironically, India Inc is one of the swiftest to adopt AI in its teams. According to an EY report covering 50 employers and 800 employees, about 62% use GenAI at work regularly, whereas 90% of the employers and 86% of the employees believe that AI impacts productivity positively.
The study noted that 75% of the employees and 72% of the employers believe that GenAI enhances decision making, 82% of the employees and 92% of the employers believe it positively impacts the quality of work.