Your weekly briefing on the HR and HR technology developments that matter, written for HR teams in European SMEs.
Big picture: pay transparency lands unevenly
The EU Pay Transparency Directive’s transposition deadline of 7 June 2026 has passed, and the map across the bloc is patchy. Law firm trackers report that only four member states (Slovakia, Italy, Lithuania and Malta) transposed on time, while the Netherlands, Sweden, the Czech Republic and Denmark have confirmed dates around 1 January 2027. The European Commission has confirmed there’ll be no EU-level delay, extension or carve-out through a later simplification package. The core obligations are already clear: publish the starting salary or salary range in the advert or before the first interview, stop asking candidates about pay history, and respond to employee requests for pay information within a set window. Gender pay gap reporting starts in 2027 for employers with 150 or more people, using pay data from 2026.
Why it matters: if you employ people in more than one European country, you’re now managing several national timetables at once rather than a single date. The 2026 pay data that feeds the first reports is being created right now, so job architecture, pay bands and the consistency of your salary records are this year’s work, not next year’s. Building to the directive’s minimum requirements and adapting as national rules land is the approach most advisers are recommending.
On the radar
The AI Act’s high-risk deadline has moved, but not all of it. The Digital Omnibus on AI was published in the Official Journal on 24 July 2026 and entered into force on 27 July 2026, days before the original 2 August 2026 deadline. Obligations for stand-alone high-risk systems in Annex III, which covers AI used in recruitment, employee monitoring, performance evaluation, promotion, task allocation and termination decisions, are postponed to 2 December 2027. Most of the Article 50 transparency obligations were left where they were and applied from 2 August 2026, so telling people when they’re interacting with AI is a present-tense duty.
AI adoption in HR is broad but the value gap is wide. SHRM’s 2026 research puts AI adoption at 39% of HR teams, rising to 60% among organisations of 5,000 people or more, with smaller employers held back by cost, skills and uncertainty about return. Recruitment is the leading use case at 27% of organisations. Set against that, Gartner reports that 88% of HR leaders say their teams haven’t yet seen significant business value from AI tools, while 82% plan to deploy agentic AI within 12 months. Gartner also predicts that more than 40% of agentic AI projects will be cancelled by 2027.
Engagement has fallen for a second year. Gallup’s State of the Global Workplace reports global employee engagement at 20%, its lowest level since 2020, with an estimated $10 trillion in lost productivity. Manager engagement fell from 30% to 27%, and the steepest declines were among managers under 35 and female managers. Gallup has been consistent on the mechanism: managers carry a disproportionate share of engagement, so a decline there tends to show up in the wider workforce a year or two later.
Skills-first hiring gets an OECD framework. The OECD’s 2026 report, A Skills-First Labour Market, sets out what it would take to move hiring and internal mobility from qualifications to demonstrated skills at scale: a common skills language, modular learning and micro-credentials, skills passports and recognition of prior learning. The pressure behind it is familiar to anyone recruiting in Europe, with the OECD noting that more than 75% of European companies report growing difficulty finding workers with the skills they need, even as formal educational attainment rises.
HR tech watch
HiBob raises $166 million at a $3.2 billion valuation. Announced on 1 September 2026, the round was led by Salesforce with participation from Farallon, and is the largest in the company’s history. It values HiBob at roughly $3.2 billion, up from $2.7 billion about three years ago, and takes total funding beyond $700 million. The company says it’ll use the capital for acquisitions and to position the platform as an intelligence layer over workforce data, organisational structures and permissions that AI tools can draw on. HiBob has bought in Europe before, including the London payroll business Pento in 2024.
This year’s top HR products point at agentic tooling. HR Executive and HR Tech named 14 winners of the 2026 Top HR Products of the Year on 15 September 2026, spanning talent acquisition, compensation, workforce management, development, workforce planning and HR operations. Named winners include Visier Organization Design, Eightfold’s AI Interviewer, iCIMS’ AI Sourcing Agent, PageUp’s Paige, Phenom’s Voice Screening Agent, Paychex’s WISE and Workday’s Sana. The common thread across the list is software that acts rather than reports.
European consolidation carries on quietly. French workforce scheduling firm Skello, backed by Bridgepoint after a €200 million investment, has set out a plan to consolidate in France, accelerate European expansion and hire around 100 more people during 2026. At the smaller end, Ireland’s HR Duo raised €1.6 million in June 2026 to grow its UK sales team, citing a European SME HR technology opportunity it sizes at €500 to €700 million.
For SME HR teams
Three things are worth an hour each this month. First, check whether your 2026 pay data is clean enough to report on: consistent job titles, comparable roles grouped sensibly and a defensible reason for every pay difference, because that record is what the first gender pay gap report will be built from. Second, write down where AI already touches your hiring and performance processes, including features your existing HRIS switched on for you, and note which ones need a plain disclosure to candidates or employees now that the transparency rules apply. Third, if you’re being pitched agentic tools, pick one narrow, repetitive task with a measurable baseline, run it for a quarter and judge it on hours saved rather than on the demo. The adoption figures suggest plenty of teams are buying capability they haven’t yet turned into value.
Sources
- Lewis Silkin on the EU Pay Transparency Directive and why employers shouldn’t wait
- Morgan Lewis on the passed transposition deadline and national timetables
- Ogletree on the European Commission confirming the 7 June 2026 deadline
- Gibson Dunn on the AI Act Omnibus and postponed high-risk deadlines
- Jones Walker on the transparency obligations that still applied from 2 August 2026
- SHRM, The State of AI in HR 2026
- Gallup, State of the Global Workplace
- OECD, A Skills-First Labour Market
- Calcalist on Salesforce leading HiBob’s $166 million round
- HR Executive and HR Tech announce the 2026 Top HR Products of the Year
- Consultancy.eu on Skello’s European expansion after a €200 million investment
- EU-Startups on HR Duo’s €1.6 million raise and the SME HR technology opportunity
HR Radar is a weekly informational summary of publicly reported HR and HR technology developments and trends. It is not legal or professional advice.
