Lattice's 2027 State of People Strategy Report: AI-Native Performance Is Reshaping HR. Culture Determines Who Leads.

New findings from more than 1,300 HR professionals reveal a people function gaining influence as AI reshapes performance, productivity, and how work gets done. The organizations pulling ahead aren't simply adopting more technology, they're adapting their culture and operating discipline to turn AI into better performance.

SAN FRANCISCO, Sept. 9, 2026 /PRNewswire/ -- Lattice, the best-in-class people platform where people and AI succeed together, today released its annual 2027 State of People Strategy Report. The report points to one of the most significant shifts in the role of HR in decades: as AI changes how work gets done, people strategy is no longer adjacent to business strategy, it is the strategy.

For years, HR leaders have argued that culture, manager effectiveness, workforce capability, and performance are fundamental to business performance. AI has quickly settled the debate. The questions keeping executives up at night—how jobs change, how productivity improves, how employees adopt AI, what high performance looks like, and how to keep pace with competition—are all people questions.

The gap between the winners and everyone else is widening, fast.

Companies that are pulling ahead are not simply adopting more AI. They're building cultures capable of turning new technology into new behaviors, stronger management, greater clarity, and sustained high performance. In those organizations, people teams are increasingly operating as strategic architects of how the business performs and adapts.

For everyone else, the stakes are rising. AI is accelerating the pace of organizational change, and companies that fail to connect technology, culture, and performance risk being left behind.

The era of treating HR as a supporting function is over. In an AI-native world, the people strategy is the operating system that makes or breaks a company.

"As AI rewrites how companies operate, HR becomes central to business transformation," said Sarah Franklin, CEO of Lattice. "This is no longer about running better people programs with bolted-on AI. It's about redefining how work happens, how performance is defined, and how organizations build the capability to win in an AI-native world."

Key Findings

Performance Is Now a Business Imperative

Performance management remains the top priority for HR leaders globally. Review frequency is increasing, with 45% of organizations conducting monthly or quarterly reviews. That continuous performance push doesn't have to lead to continuous administrative work, though: 74% of HR leaders believe managers are already using AI to write performance reviews and most view this positively, citing faster completion (76%), better review quality (64%), and higher completion rates (64%).

"Performance management needs to shift from a backward-looking exercise to a continuous rhythm of feedback, coaching, and development," said Sophie Hurcombe, Chief People & Operations Officer, Lattice. "AI reduces the administrative burden and gives managers more time for meaningful developmental conversations, but it should support human judgment and not replace it. Managers must remain accountable for their feedback and decisions. For HR leaders, the opportunity is to make performance management less about compliance and more about driving growth."

HR's Mandate Is Expanding Faster Than Its Support

As HR takes on a broader role across performance, culture, and AI adoption, many people teams are being asked to carry a more consequential mandate without the support to match it. 55% of HR leaders have considered leaving the profession in the past year, driven by feeling undervalued (39%), operating in crisis mode (35%), and burnout (34%). Fears about AI replacement register for 21%.

Notably, the qualities that draw people to HR can be sources of strain without adequate support. When asked what brings them the most job satisfaction, HR leaders point to helping individuals grow (56%), serving as a trusted advisor (54%), and influencing the organization at every level (52%), which are the same responsibilities that leave them overextended when they're under-resourced.

Despite the strains, signs of improvement are ahead. 52% of HR leaders expect headcounts to increase in the next six to twelve months, and 54% expect budgets to grow in the same window.

AI Is Pulling HR Closer to the Center of the Business

HR leaders are increasingly confident in AI, with adoption becoming more sophisticated across organizations. 83% of HR leaders say they're somewhat or very excited about AI, and usage is shifting from manual, DIY approaches (such as prompting LLMs) toward embedded tools. 44% of organizations now use enterprise platforms that have AI built in and 58% use productivity tools with AI features.

"I've seen firsthand how AI in our hands can be invaluable for optimizing our organizations," said Ashley Alvarado, Lattice customer and Director of People Strategy at Away Travel. "AI can be a real force multiplier for enablement and productivity, and I don't think that's been unlocked to its fullest potential yet. Be the person who brings these ideas to the forefront and redefines what it actually means to be an HR function."

As companies decide how AI should change jobs, productivity, and performance, HR is increasingly shaping decisions that extend far beyond the people function.

51% of HR leaders are under pressure from the C-suite to increase AI use, and while ethical concerns remain present for 60% of HR leaders, 71% say they've had direct conversations with leadership about those concerns, suggesting HR is engaging critically with AI rather than adopting it uncritically.

In Europe, HR leaders are more likely to use specialized AI-powered tools (59% vs. 41% in the U.S.) and to have had direct conversations with leadership about ethical AI concerns (83% vs. 71%). U.S. HR leaders, by contrast, are more likely to believe AI overpromises on productivity gains (77% vs. 64%).

Culture Is the Infrastructure for Performance

There is a clear, measurable connection between culture and business outcomes.

Companies that consistently demonstrate their core values see 89% of employees highly engaged, compared to 53% at those that do not. Employees at those companies are also twice as likely to articulate company goals (44% vs. 22%).

This pattern extends to how HR itself is supported. HR leaders with strong C-suite relationships face less pressure to justify culture-focused programs like employee engagement, wellbeing, and DEIB, and report lower burnout and fewer intentions to leave.

Technology Alone Won't Create High Performance

HR technology investment continues to grow, but buyer satisfaction is inconsistent. Nearly half (47%) of HR teams say at least one solution purchased in the past two years did not meet expectations, citing functionality that fell short (50%), integration challenges (34%), and poor usability (34%).

High-performing HR teams are more than twice as likely to attribute the failure to internal process gaps rather than the tool itself (45% vs. 22%), suggesting that how a team implements technology matters as much as which technology they choose.

Looking Ahead

This year's data points to a people function with a bigger mandate and greater influence than ever before.

As AI reshapes how work gets done, high-performing organizations are bringing people strategy closer to the center of the business. They are investing in performance and culture together, approaching AI with discipline, and giving HR leaders the authority and support to translate new technology into new behaviors and better business outcomes.

The divide is increasingly clear: the organizations pulling ahead are not simply adopting more AI. They are building the culture, leadership, and operating discipline to turn it into sustained high performance.

Read the full report to learn how leading HR teams are redefining performance, shaping AI adoption, and building the organizational capabilities required to compete in the next era of work.

About the State of People Strategy Report

The 2027 State of People Strategy Report features survey responses from more than 1,300 HR professionals collected in 2026. Respondents represent organizations of varying sizes across industries in the United States, Canada, the United Kingdom, France, Germany, and additional global markets.

The complete 2027 State of People Strategy Report is available at https://lattice.com/state-of-people-strategy/2027 

About Lattice

Lattice is a best-in-class people platform where people and AI succeed together. Built on the belief that high performance is a habit, Lattice brings the best people and AI tools together to help employees grow, managers lead, and companies succeed.

Lattice turns clarity, feedback, and alignment into daily habits – giving employees visibility into goals and growth, enabling managers to lead with real-time insights, and equipping HR teams with a connected foundation across performance, goals, growth, engagement, compensation, and AI. With a mission to make work meaningful, we understand your people are your business. Lattice ensures both are successful.

Founded in 2015 and with a presence in North America and the UK, Lattice serves nearly 5,000 customers worldwide, including Brilliant Earth, Calm, Figma, Intercom, NPR, Tide, and more. The company is recognized as one of Inc's Best in Business and Deloitte Technology's Fast 500 companies for business excellence, growth, and innovation.

For more information, visit www.lattice.com.

SOURCE Lattice