Need to Know Briefing | January 20, 2026: Hiring Slows, H-1B Changes, AI 'Workslop'

What did LinkedIn's latest workforce data reveal?

The U.S. economy added just 50,000 jobs in December, capping a year in which payrolls rose by only 584,000—the smallest annual gain since 2010, excluding pandemic years, according to LinkedIn. LinkedIn's Workforce Confidence Index remained stuck at +5 in November and December, the lowest reading for this time of year on record.

Entry-level and junior roles are showing the steepest year-over-year hiring declines, with middle management seeing the largest quarter-over-quarter drop. Despite this, 56% of professionals plan to job hunt in 2026, yet 76% say they don't feel prepared to do so.

There are still pockets of opportunity. Manufacturing hiring increased 4% year-over-year, and technology, information, and media rose 3%. Regionally, Miami led with 7% growth, followed by Detroit at 6% and Minneapolis at 5%. Roles gaining momentum include AI engineers, AI consultants, data annotators, and independent consultants.

How are H-1B rule changes affecting employer hiring strategies?

Beginning February 27, the Trump administration's new H-1B visa lottery rule takes effect, offering greater odds to workers placed in the highest of four wage levels, according to USCIS. Immigration attorneys say this will prompt employers to "reevaluate workforce planning and hiring strategies," according to Bloomberg Law.

"Companies may choose to pass on entry-level or mid-level key talent as the chances of ultimately securing a H-1B decreases," said Jill Bloom, an immigration attorney at Fragomen, via Bloomberg Law. Employers that have recruited H-1B applicants from top U.S. universities will likely shift strategy, since the new rule advantages workers with more seniority.

Some employers may expand use of the L-1 visa, which allows companies to temporarily transfer certain employees from foreign offices to U.S. locations, according to the Federal Reserve Bank of Richmond. In tech, employers may be more inclined to outsource jobs abroad. Amazon is already allowing employees stranded in India due to visa processing delays to work remotely until March, according to Business Insider—though with restrictions: impacted workers cannot code, make strategic business decisions, or negotiate contracts. Other major employers including Google, Apple, and Microsoft have issued travel advisories warning U.S. employees with visas to avoid international travel, according to NPR.

What's happening with immigration enforcement?

The Trump administration's immigration crackdown has intensified, with more than 2,000 federal agents now working in the greater Minneapolis area alone, according to CBS News. According to the Star Tribune, ICE is increasingly targeting small and midsized businesses in Minnesota, with employment law experts calling the sheer quantity of enforcement actions unprecedented.

Officials in other states are bracing for similar activity. Maine officials expect heavy enforcement in Portland and Lewiston, according to the Bangor Daily News. Boston officials are privately preparing for a potential spike, according to Axios. Cleveland police issued a rare statement promising they would not assume responsibility for immigration enforcement, according to Cleveland.com. New Jersey legislators passed three bills aimed at protecting immigrants, pending the governor's signature, according to WHYY. In New York, immigration agents detained a City Council employee, with officials offering conflicting information about the staff member's status, according to The New York Times. Immigration crackdowns continue in Southern California, including workplace raids, according to NBC Los Angeles.

The state of Minnesota joined Minneapolis and St. Paul in suing the administration to stop the surge of ICE agents, according to Kare11, while activists have called for a day of protest on January 23. Last week, President Trump threatened to invoke the Insurrection Act in response to increased anti-ICE protest activity, according to The Wall Street Journal.

How are tariffs impacting supply chain employment?

Tariff-related costs have triggered increased job cuts among supply chain professionals, according to a new survey by the Association for Supply Chain Management and CNBC. The number of supply chain managers reporting layoffs doubled from 16% in April to 32% currently.

Sixty-five percent of respondents reported cost increases of at least 10-15%, with 34% experiencing increases exceeding 15%. Companies also report lost productivity from the administrative burden of tariff compliance paperwork.

"Tariffs just don't hit the balance sheet. They hit the people," said Abe Eshkenazi, CEO of ASCM, via CNBC. "We're seeing layoffs because of companies trying to manage their cost structure."

Which generation is most likely to stay with their employer?

Millennials are the most likely generation to stay put, registering a Retention Index of 115.4 in Eagle Hill Consulting's Q4 2025 report—up 1.2 points and significantly higher across all internal satisfaction measures compared to other generations. The overall Retention Index closed 2025 at 105.0, up from 98.5 at the end of 2024, driven by greater confidence in organizations and stronger workplace culture sentiment.

"Despite a typical year-end dip, U.S. workers are entering 2026 more likely to stay with their employers than they were coming into 2025," said Melissa Jezior, Eagle Hill's president and CEO. "Employees are anchoring onto the relative stability of their current roles as they see fewer viable or attractive external opportunities."

Women, Gen Z, Gen X, and Baby Boomers all saw slight retention declines.

Why are job seekers feeling unprepared while recruiters struggle to find talent?

Nearly 80% of professionals feel unprepared to find a job in 2026, even as more than half are actively seeking new roles, according to LinkedIn research surveying over 19,000 workers and 6,500 HR professionals globally. U.S. applicants per open role have doubled since spring 2022, with 65% of job seekers saying competition is the main obstacle.

On the employer side, 66% of recruiters say finding qualified talent has become harder over the past year, facing pressure to fill roles faster and uncover overlooked candidates. AI is filling the gap: 93% of recruiters plan to increase AI use in 2026, with 59% saying AI already helps them identify candidates they previously would have missed. Meanwhile, 81% of job seekers have used or plan to use AI in their search.

What's driving the gap between hourly and salaried worker financial wellbeing?

Forty percent of hourly workers report feeling worse off than the national economy, compared to just 17.7% of their salaried counterparts, according to PYMNTS Intelligence's Wage to Wallet Index. Nearly half (47.3%) of hourly workers delayed or missed a bill payment in the prior month because paychecks had not yet cleared.

The findings suggest a growing financial divide, with hourly workers seeing little benefit from broader economic growth.

What does SHRM's research reveal about meeting employee needs?

Support for employee needs is emerging as a key differentiator between high- and low-performing organizations. Among workers who rated their employers positively on addressing needs, 91% reported job satisfaction, compared to just 44% whose employers were ineffective, according to SHRM.

Seventy-two percent of HR professionals said workers have higher expectations than in the past, and over half of employees at organizations failing to meet those needs said they were at least somewhat likely to leave within a year. Leadership development is emerging as a top priority, with CHROs reporting the C-suite has increasingly recognized the importance of manager development, according to a separate SHRM survey of 129 CHROs reported by HR Dive.

What is AI 'workslop' and why should employers care?

Employees are using AI to generate polished-looking but ultimately useless work—a phenomenon researchers are calling 'workslop.' According to new research from BetterUp Labs and Stanford Social Media Lab, reported by Harvard Business Review, 41% of employees reported receiving workslop that affected their work, while over half admitted to sending it.

Each workslop incident takes approximately two hours to resolve, costing an estimated $186 per employee monthly. For a company with 10,000 workers, that adds up to roughly $9 million annually. Half of workers who received workslop viewed colleagues who sent it as less creative, capable, and reliable than before.

The root cause isn't laziness—it's management failure. Forty-one percent of employees said leadership encouraged AI use without providing detailed instructions or contextual understanding. The result is "performative AI adoption," where employees use AI tools to demonstrate compliance rather than advance work. Solutions include building AI competence (50% less workslop), fostering open communication about AI use (61% decrease), and setting clear expectations for when and how to use these tools.

Are AI executives concerned about slow ROI?

Virtually all senior data and AI executives report their organizations view AI as a top priority, with 99% stating investments are a priority and 90% of firms now having appointed a Chief Data Officer, according to the Data & AI Leadership Exchange survey of Fortune 1000 executives, reported by Harvard Business Review.

Firms with AI in production at scale jumped from 5% to 39% in just two years. Fifty-four percent report realizing high or significant business value from AI investments, up from 47% last year. Yet 93% identified human issues—culture and change management—as the key challenge to AI adoption. Only 7% blamed technology. Fear of job loss is increasing rapidly, alongside insufficient resources for upskilling.

How is Trump's AI Executive Order affecting state employment laws?

President Trump's December 11 Executive Order aims to reduce state-level AI regulation, creating potential compliance conflicts for employers navigating both federal directives and existing state AI employment laws, according to LaborEmploymentLawBlog.com. The order establishes an AI Litigation Task Force to pursue legal challenges against state regulations deemed incompatible with federal goals of promoting AI innovation.

Multiple states have enacted legislation regulating AI in hiring and employment decisions. The California Consumer Privacy Act, effective January 1, 2026, requires businesses using AI without human involvement in employment decisions to prepare risk assessments, provide pre-use notice, and permit opt-out rights. Colorado, Illinois, and Texas have similar laws taking effect in 2026, with Maryland passing comparable legislation as well.

How is AI affecting jobs in Europe and China?

In Europe, workers face a weakening labor market compounded by AI anxiety, according to DW. Twenty-five percent of European workers fear AI could put their jobs at risk, while 74% believe firms will need smaller headcounts due to the technology, according to EY. Germany's Institute for Employment Research projects 1.6 million jobs could be reshaped or lost to AI by 2040, with high-skilled positions disproportionately affected.

In China, AI is already disrupting a range of industries, according to Nikkei. According to McKinsey, 36% of Chinese employers expect workforce reduction due to AI, with 21% anticipating decreases of 11% or more in the next year. Large employers including Tencent and Baidu say AI now contributes to over 50% of their new code generation. Some employers are using more junior employees to fill roles that previously required experience, with AI helping them perform the same tasks at lower cost.

AI Roundup

• McKinsey now has 20,000 AI "workers." CEO Bob Sternfels said the consulting firm operates with a workforce of 60,000—40,000 humans and approximately 20,000 AI agents added in under two years, comprising nearly 40% of the total workforce, according to Business Insider.
• Google launched AI shopping agents. Gemini Enterprise for Customer Experience enables retailers to deploy shopping and customer service agents, with Lowe's, Kroger, and Papa Johns already testing, according to The Wall Street Journal. Kroger's chief digital officer warned companies not invested in AI agents risk creating a "competitive barrier or disadvantage."
• Anthropic released Cowork. The new AI agent allows non-technical users to have Claude read, edit, and create files without coding skills, according to VentureBeat. Available to Claude Max subscribers ($100-$200/month), it can reorganize files, generate expense spreadsheets from receipts, or draft reports from scattered notes.
• Agentic AI poses cybersecurity threats. Experian's Data Breach Industry Forecast warned that AI agents could be exploited by hackers who "inject their AI agents" to disrupt orchestration, potentially causing a "massive spike in identity theft," according to Insurance Journal.

Spotlight: Why Are Recent College Graduates Struggling?

Unemployment among recent college graduates has risen to 9.7%—now higher than the rate for job hunters with only a high school diploma, according to the Bureau of Labor Statistics. Entry-level hiring processes are deteriorating as grade inflation and AI-generated applications erode traditional evaluation methods, and over 5 million student loan borrowers are in default with wage garnishments resuming this month.

Read the full Spotlight: Recent College Graduates Are Struggling →

Global Snapshot

Hungary: About 25% of employers offer remote work options, with 75% planning no changes over the next one to two years, according to a survey by GKI Economic Research Institute reported by Hungarian Conservative. Italy: Unemployment fell 0.4% year-over-year to 5.7% in November, according to ISTAT via SIA. Malaysia: Unemployment dropped to 2.9%, the lowest in 11 years, according to SIA. United Kingdom: 56% of UK employers plan to expand permanent IT and technology teams in H1 2026, an 11% increase over H1 2025, according to Robert Half via SIA.

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About the Need to Know Briefing

The Need to Know Briefing is published weekly by Kelly, curating the most important workforce and hiring insights for HR leaders and hiring managers.