With FY26 well and truly underway, Australia’s HR landscape continues to undergo significant and rapid change.  From tightening compliance obligations and evolving workforce demographics to the swift rise of AI and shifting expectations around flexibility and purpose, HR leaders are navigating a complex, high-stakes environment.  More than ever, they’re being called upon to lead with both strategic precision and empathy, guiding organisations through transformation while keeping people at the core. 

Key Takeaways: 

  • Personalised flexibility, family-friendly benefits, and wellbeing are now crucial factors in attracting and retaining talent.
  • Age discrimination remains a persistent barrier — organisations must take action to build genuinely multigenerational workforces.
  • Major regulatory shifts, including wage theft criminalisation and expanded leave entitlements, demand proactive compliance and culture alignment.
  • AI is transforming HR, but unlocking its potential requires clear principles, skilled teams, and thoughtful governance. 
  • Connection, not just culture, is critical to combat disconnection in a hybrid, five-generation workforce.

  

Here is Our Focus This Year, and Why It Matters 

FY26 Focus: A Summary 

  

Rebuild the Employee Deal: Flexibility, Fairness, and Future-Fit Rewards  

Australian workers are renegotiating what they expect from their employers, and many aren’t waiting around.  A recent study found that 42% of jobseekers would reject a role with a rigid in-office policy, while over 53% place family-friendly benefits above salary (News.com.au, 2025). 

What You Can Do: 

  • Audit your EVP: Does it reflect what matters now (e.g., hybrid options, wellbeing leave, cost-of-living support)?
  • Move toward personalised benefits that span life stages — think fertility support, financial counselling, cultural leave, and phased retirement.

 

Address Age Discrimination Head-On 

A July report from the Australian Human Rights Commission and AHRI revealed that 24% of employers considered over-50s “too old” to hire, while only 41% are open to hiring under-24s (AHRC & AHRI, 2025).  These age biases are a major roadblock to inclusive, multigenerational workplaces. 

What You Can Do: 

  • Include age as a core DEI priority.
  • Train hiring managers on age bias and adopt skills-based hiring.
  • Introduce reverse mentoring and generational learning programs to bridge knowledge and experience gaps. 

 

Stay Ahead of Compliance — and Culture 

From July 1, major changes took effect across superannuation, minimum wage, parental leave, and the criminalisation of wage theft.  HR’s role isn’t just to keep up, it’s to help businesses understand and act quickly, without losing sight of values.  The new Wage Theft Laws introduce criminal penalties up to AUD$8.25 million or jail terms (Business360, 2025). 

What You Can Do: 

  • Conduct a full compliance gap analysis across awards, contracts, and systems. 
  • Proactively educate line leaders on changes to entitlements and fair work laws. 
  • Link compliance to culture: Demonstrate how transparency and trust in pay and leave systems improve engagement. 

 

Harness AI Responsibly — But Boldly 

AI is opening up powerful new possibilities for HR, streamlining operations, enhancing decision-making, and creating more personalised employee experiences. Yet adoption without governance risks reputational and ethical fallout. In fact, 86% of HR professionals in Australia expect AI to significantly impact operations in FY26, but only 45% report having clear AI policies in place (Elmo software HR Insights Report, 2025).  To make the most of this shift, it’s essential to approach AI with both ambition and intention.  By leading with purpose and curiosity, HR can harness AI not just do things faster, but to do them better. 

What You Can Do: 

  • Identify high-impact opportunities: Explore where AI can add real value — like candidate screening, sentiment analysis, or skills mapping. 
  • Lay strong foundations: clear principles around transparency, fairness, and data privacy help ensure AI is used in ways that build trust and equity. 
  • Build capability: Equip your team with the skills to prompt effectively, interpret AI outputs, and recognise potential bias. 

 

Shift from Culture Building to Connection Building 

With five generations now in the workforce and rising disconnection due to hybrid/remote models, culture can feel abstract.  FY26 is the time to focus on belonging and human connection. 

What You Can Do: 

  • Prioritise moments that matter such as onboarding, parental leave, manager transitions, and retirement. 
  • Encourage peer-to-peer connection through communities of practice and internal mobility. 
  • Refresh your internal comms strategy — short, sharp, and mobile-first is key. 

 

The Takeaway: HR is the Architect of the New Workplace 

FY26 won’t be about just keeping up.  It’s about stepping forward with confidence, designing workforce strategies that reflect diverse people, new expectations, and fast-moving legal and tech changes.  Focus on clarity (in policies), courage (in inclusion), and curiosity (with AI and new ways of working).  The HR leaders who thrive this year will be those who embrace transformation as a people-first practice — not just a change project. 

Author: Ilona Charles, CEO and Co-Founder of shilo.