Last week, we shared a clear look at the economic picture heading into 2026 and what the data helps clarify.
The next question for most leaders is what to do with that information.
This post focuses on how those conditions tend to show up in practice and how leaders can reduce avoidable risk without freezing or overcorrecting.
Cost Structure: Plan Around What’s Likely, Not What’s Hoped For
Inflation has slowed from earlier peaks, but many business costs have not returned to prior levels. Compensation, benefits, insurance, and services remain elevated relative to pre-2020 norms, according to recent releases from the U.S. Bureau of Labor Statistics.
Where leaders often struggle is not understanding the data, but knowing how to plan around it.
Some budgets still rely on gradual cost relief to work as intended. When that relief doesn’t materialize, leaders are forced to adjust plans midstream, often under time pressure.
The Takeaway:
Build plans that work at today’s cost levels. If costs ease later, that creates flexibility. Plans that only work if expenses come down tend to require more course correction than expected.
Hiring: A Cooler Market Doesn’t Solve Every Hiring Problem
Overall hiring has slowed, but not evenly. The unemployment rate remains relatively low, and job growth continues in some sectors while others have pulled back, based on the latest Employment Situation reports from the BLS.
This means some roles are easier to fill than they were a year ago, while others remain competitive (healthcare is a clear example). Positions tied closely to revenue, customer experience, safety, or operational continuity often fall into the latter group.
Leaders sometimes expect a softer labor market to resolve long-standing hiring challenges on its own. In many cases, it doesn’t.
The Takeaway:
Be clear about which roles matter most to the business and prioritize time, compensation flexibility, and leadership attention accordingly. Not every opening should receive the same focus.
Productivity: When Gains Are Real and When They’re Not
Productivity improved in parts of the economy in 2025, particularly in nonfarm business sectors, according to the BLS Productivity and Costs report. However, those gains were not consistent across industries or organizations.
Some companies improved workflows, systems, or tools. Others maintained output by asking fewer people to do more work.
The Takeaway:
Look beyond headline productivity metrics. Signals like sustained overtime, rework, delays, error rates, or growing decision backlogs often provide a clearer picture of whether current performance is sustainable.
Decision Timing: Why Delayed Decisions Create More Pressure
In this environment, many leaders find that the hardest part is not deciding what to do, but when to do it.
Uncertainty can make it tempting to wait for more information before making hiring, investment, or structural decisions. In the short term, this can feel cautious. Over time, it often shifts strain onto teams and managers who are already stretched.
Leader sentiment research reflects this tension. Business leaders report cautious optimism about growth while also citing labor availability, revenue pressure, and policy uncertainty as ongoing constraints, according to JPMorgan Chase and S&P Global.
The Takeaway:
Set decision checkpoints. Decide which choices need to move forward with the information you have and which can reasonably wait, rather than leaving everything open-ended.
Pulling It All Together: Key Takeaways for Leaders
For leaders planning the year ahead, these are the points worth keeping in mind.
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Plan around today’s cost structure. Don’t assume expenses will normalize on their own. Build plans that work under current conditions.
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Expect hiring to remain uneven. Some roles will stay competitive even as overall hiring slows. Prioritize the critical roles that protect revenue and operations.
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Be realistic about productivity. Separate gains driven by better systems from those driven by sustained workload.
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Avoid unnecessary decision delays. Waiting too long on critical people or structure decisions often creates more pressure, not less.
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Check leadership capacity. Middle management strain, decision bottlenecks, and escalation patterns are early indicators that deserve attention.
Taken together, the current environment doesn’t call for pulling back or freezing. It calls for being more intentional about where you place attention, resources, and leadership energy.
If you’re planning for 2026 and need clearer direction on critical roles, recruiting priorities, or people strategy, Hoops can help. You can schedule a free, confidential conversation with our team to get started.
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