Your weekly briefing on the HR and HR technology developments worth knowing about, written for HR teams in European small and medium-sized businesses.
Big picture: the EU AI Act deadline moved, but the clock hasn’t stopped
2 August 2026 was meant to be the date the EU AI Act’s high-risk obligations started applying to AI used in recruitment, candidate selection, performance evaluation, task allocation and promotion decisions. That date has shifted. Under the Digital Omnibus, given final approval by the Council of the EU on 29 June 2026 and in force since 27 July 2026, standalone high-risk systems listed in Annex III now have until 2 December 2027, a 16-month deferral. What hasn’t moved is the rest of the Act: the Article 5 ban on AI systems that infer the emotions of employees or candidates is already in force, as is the Article 4 AI literacy duty requiring that staff who use AI systems, or whose work is affected by them, receive adequate training. Law firms covering the change are consistent on the framing: the high-risk deadline is deferred, not cancelled.
Why it matters: if you paused your AI hiring review when the deadline slipped, restart it. You have more time to prepare bias testing, logging and human oversight for screening tools, but the emotion-recognition ban and the AI literacy duty apply to you today, whatever your headcount. For most SME HR teams the practical first step costs nothing: write down which AI tools touch your hiring and performance processes, and make sure the people using them have had proper training.
On the radar
Pay transparency: most of Europe is still catching up. The EU Pay Transparency Directive’s transposition deadline passed on 7 June 2026 and, according to an August update from Trusaic, only five of the 27 member states have finalised transposition: Italy, Slovakia, Lithuania and Malta had law in force at the deadline, with Greece following on 6 July under Law 5316/2026, whose operative duties begin on 1 November 2026. Estonia partially transposed the pre-employment rules (salary range disclosure, a ban on asking about pay history and a ban on pay secrecy clauses) from 13 July 2026. Ireland has notified the Commission of a delay and plans phased implementation through a new Pay Transparency Bill, while Sweden has a draft ready but is not putting a bill to the Riksdag while it seeks renegotiation. Morgan Lewis notes the first gender pay gap reports fall due by 7 June 2027 for employers with 150 or more workers, covering 2026 data, so the year being measured is the one you’re in now.
Skills-based hiring keeps gaining ground. Research from NACE finds 70% of employers now report using skills-based hiring practices, up from 65% the year before, with 71% applying the approach at least half of the time. The interesting shift is in emphasis rather than adoption: commentary through 2026 describes a move from broad ambition to precision, with employers naming the specific capabilities they need (data literacy, AI fluency, security awareness, customer problem-solving) instead of dropping degree requirements as a gesture.
Engaged, but not necessarily staying. A Firstup survey of more than 6,200 employees across North America and the UK reports UK engagement at 76% for office workers, 83% for managers and 69% for hourly workers, yet finds intent to stay is markedly weaker than engagement. Firstup’s reading is that the gap is driven less by how people feel about the work itself and more by how reliably they’re informed, involved and heard. The Conference Board’s recent CHRO survey points the same way, with hiring and engagement strengthening while retention lags.
Learning debt is becoming the quiet risk. The TalentLMS 2026 L&D Benchmark Report, based on 101 HR managers and 1,000 employees in the US, found 73% of employees say training would make them stay longer and 73% of HR managers rank expanded digital skills as their main focus for the year ahead. The tension sits in two other numbers: 65% of employees say performance expectations rose this year, with lack of time the biggest barrier to learning, and 47% of leaders think AI training is being built to automate jobs rather than support people doing them. Sample sizes are modest and US-based, so treat the figures as directional rather than definitive.
HR tech watch
French scheduling platform Skello lands a €200 million investment. Skello, which builds workforce scheduling and time management software for shift-based businesses, is using the money to push into more European markets and plans to hire around 100 more people during 2026. Shift scheduling and time tracking remain one of the most fragmented parts of the SME HR stack, so the segment is worth watching.
Ireland’s HR Duo raises €1.6 million for SME HR. The Dublin-based company secured the round in June, explicitly framing its opportunity as a €500 to €700 million European SME HR tech market. Smaller rounds like this are a useful signal: investors are still backing tools built specifically for smaller employers, not just enterprise suites priced down.
Workday puts guardrails around HR AI agents. At its June developer conference Workday introduced Developer Agent, Agent-Ready Tools and Agent Passport, the last of which attaches verification stamps from security and compliance vendors to an agent before it’s deployed. Early access is running now with general availability projected for the second half of 2026. Whatever you think of the agent hype, the governance layer is the part smaller buyers should ask their own vendors about.
For SME HR teams
Three things are worth an hour of your time this week. First, list every AI tool that touches hiring or performance in your organisation, note who uses it and confirm those people have had AI training, because the literacy duty applies now even though the high-risk rules don’t. Second, check your own country’s pay transparency status rather than assuming an EU-wide timeline, since the picture varies enormously by member state and the data you’ll eventually report on is being generated this year. Third, if your engagement scores look healthy but people are still leaving, look at your internal communication before you look at pay: that’s where this week’s research points.
Sources
- Gibson Dunn on the EU AI Act Omnibus agreement and postponed high-risk deadlines
- White & Case on the EU Digital Omnibus deal to simplify AI rules
- DLA Piper on the deferral of high-risk AI obligations
- Crowell & Moring’s 2026 legal overview of AI and human resources in the EU
- Trusaic’s August 2026 EU Pay Transparency Directive transposition update
- Morgan Lewis on what happens now the transposition deadline has passed
- Ius Laboris tracker of which countries have transposed the directive
- NACE research on growth in employer use of skills-based hiring
- Firstup survey on the gap between employee engagement and retention
- The TalentLMS 2026 L&D report on the state of workplace learning
- Consultancy.eu on Skello’s €200 million investment and European expansion
- EU-Startups on HR Duo’s €1.6 million raise for SME HR tech
- Workday’s announcement of new tools to build, connect and verify AI agents
- SHRM’s August 2026 download on HR technology trends
HR Radar is a weekly informational summary of publicly reported HR and HR technology developments and trends. It is not legal or professional advice.
