Massachusetts employers are navigating a rapidly shifting workplace landscape shaped by economic uncertainty, new regulatory mandates, and evolving employee expectations, according to a report issued today by Associated Industries of Massachusetts.

Employers participating in the 2026 AIM HR Practices survey listed employee morale and talent retention as their priorities for next year, while the percentage of companies integrating artificial intelligence into their human-resources operations has nearly doubled, from 14% in 2024 to 26% in 2025.

“This year’s results show a workplace in transition: employee morale is slipping, AI adoption is accelerating, and health-plan premiums are rising at the fastest rate in years. Together, these shifts are prompting organizations to rethink how they attract, support, and retain talent,” said Kyle Pardo, Executive Vice President of AIM HR Solutions, the human-resources and training unit of AIM.

“As workplaces navigate rapid regulatory change, economic uncertainty, and shifting workforce expectations, HR is increasingly responsible for creating environments where employees feel valued, supported, and connected.”

The survey collected insights from 216 employers from every sector of the Massachusetts economy.

Employers project wage-and-salary increases of 3.5 percent for 2026, down slightly from 3.6 percent for 2025 as the labor market continues to moderate. Unemployment in Massachusetts has ticked up from 4.2 percent in January to 4.7 percent currently.

The AIM survey also found that average health-plan premiums will rise from 7.7 percent in 2025 to 9.7 percent next year. Meanwhile, the number of employers offering hybrid work schedules has dropped from 61 percent to 50 percent.

Pardo said that 2025 began with a flurry of federal executive orders that reshaped the employment environment. These orders repealed Affirmative Action requirements except for veteran and disability reporting, heightened scrutiny around I-9 compliance and directed the recognition of only two genders. The Equal Employment Opportunity Commission (EEOC) also issued guidance on discrimination related to Diversity, Equity, and Inclusion.

Meanwhile, all 50 states introduced legislation governing artificial intelligence (AI) in the workplace.

Other key fundings from the HR Practices report:

• Just over half of organizations (54%) expect their staffing levels to remain steady in 2026, while nearly a third (32%) plan to expand their workforces, a decline from 40% in 2025, reflecting a more cautious approach to
• Eighty-two percent of respondents indicated that their 2026 salary and bonus projections will remain the same as or exceed those from the prior year, reflecting continued caution paired with a commitment to talent retention in a competitive hiring
• Ninety-nine percent of companies offer health insurance to employees. The most popular plans remain HMOs, 68 percent, and PPOs, 50 percent. (Many companies offer more than one health-plan option.)
• The 2025 AIM HR Practices Survey data reflect national trends showing premium increases in the 8-12% range depending on plan type. Cost-containment strategies for 2026 show an emphasis on increased co-payments, deductibles and employee premium contribution when compared to 2025.
• More than 76% of companies consistently provide a standard suite of benefits, including health, dental, and vision insurance, retirement plans, paid time off (PTO), life insurance, and disability
• In addition to base pay adjustments, 38% of survey respondents reported employing staff who work second and/or third shifts. Among these employers, the average shift differential was $1.33 per hour for second-shift employees.
• Sixty-six percent of participants stated that they have formal salary ranges compared to 53% in As of October 29, 2025, employers in Massachusetts with 25 or more employees must now include salary ranges in job postings and provide pay range information to applicants and certain employees.
• Fifty-three of employers offer behavioral and mental health resources, slightly down from 54% in Meanwhile, 25% reported an increase in requests for mental health support (down from 26%), and 33% saw no change. Other resources mentioned included on-site support, insurance coverage, counseling, and wellness newsletters.
• Employers on average expect to match7 percent of employee salaries for 401(k)/403(b) contributions – compared to 3.4% in 2024.
• One quarter of responding companies had 10-20 percent of employes use Paid Family and Medical Leave in 2025.

DOWNLOAD THE SURVEY