New Delhi, Dec 17 (PTI) The convergence of artificial intelligence, evolving labour regulations and rising employee expectations will redefine how organisations manage pay, people and performance in the
coming year, a report says.
According to ADP, a leading global technology company specialising in Human Capital Management (HCM) solutions, the Indian workplace of 2026 will be increasingly intelligent, interconnected and human-centred.
Organisations that embrace payroll modernisation, invest in compliance readiness, and prioritise employee financial well-being are better positioned to navigate the uncertainties of the future workforce.
"The year ahead brings both opportunity and complexity for India's employers. Skills are becoming the new currency, automation is reshaping how work gets done, and employees are expecting work experience that supports both productivity and personal well-being.
"In such a scenario, organisations that respond with empathy, structure and agility will be able to stay ahead of the curve," said Rahul Goyal, Managing Director, ADP India and Southeast Asia.
The three factors that will redefine the future workplace are AI, compliance complexity and changing employee expectations.
According to ADP research data, nearly 35 per cent of Indian businesses identify AI adoption as the primary enabler of HR and payroll innovation over the next two to three years -- the highest across the APAC region.
"As enterprises scale, automation will increasingly handle high-volume, rule-based processes, freeing HR teams to focus on judgment-led decisions and employee engagement," the report said.
Going ahead, with tighter regulatory scrutiny and evolving labour definitions, accurate time and attendance management will become a core operational priority.
"Organisations are expected to invest more in biometric systems, secure mobile attendance tools and geolocation-enabled solutions to ensure reliable records," the report said, adding that compliance remains a key pressure point.
According to the Future of Pay in India 2025 report, a large percentage of Indian organisations struggle to keep pace with regulatory changes, making this a significant area of focus in the year ahead.
In 2026, well-being initiatives will expand beyond traditional health benefits to include mental health counselling, financial planning, caregiving resources and structured programs on stress management, resilience building and maintaining personal balance.
"Hybrid work structures will also continue to evolve in line with India's realities, with many companies adopting hub-and-spoke approaches to tap talent in smaller cities," the report said.
In 2026, interactive payslips, digital pay wallets and earned wage access solutions will gain traction.
However, according to the ADP’s survey, adoption of flexible pay structures in India remains limited, with only about 30 per cent of organisations currently exploring models such as performance-based compensation and on-demand pay.
As these practices evolve, variable pay is likely to make up a larger share of total earnings, with a stronger linkage to outcomes that reflect both individual performance and role-specific contributions, the report said.
Moreover, companies are likely to strengthen their focus on pay equity, shifting from periodic assessments to continuous, analytics-driven monitoring to ensure fairness and transparency.
Lastly, financial wellness programs will continue to gain ground, with companies offering tax guidance, savings tools, investment awareness sessions and retirement planning resources to help employees build long-term stability, the report said. PTI DRR DR
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