Leadership Briefing: 17 August 2026
What this week's policy thinking means for leaders
This week’s briefing covers investment, trust, AI, living costs, skills, customer expectations and employee wellbeing. Although the subjects vary, each raises the same practical question: how can leaders respond to immediate pressures without neglecting what their organisations will need next?
The economy has held up better than many expected, but short-term pressures remain. Organisations that want to grow will need to keep investing in their people and technology without losing sight of the experience of employees and customers.
Reports and publications worth exploring
1. Business investment shows signs of resilience
The latest ONS figures show business investment rose by 1.3% in the second quarter of 2026, although it was still 1.4% lower than a year earlier. Most of the increase came from spending on transport equipment and other machinery, while investment in intellectual property products declined.
The figures suggest that some firms are still prepared to spend despite wider uncertainty. The harder question is where to invest. Decisions on technology, skills and infrastructure may add to costs now, but delaying them could limit productivity later.
Read more: Business and Investments Bulletin, Office for National Statistics
2. UK economy shows resilience, but challenges remain
The latest analysis from the National Institute of Economic and Social Research (NIESR), Not Out of the Woods Yet, finds that the UK economy has proved more resilient than expected. Even so, substantial risks remain, including weak productivity growth, persistent cost pressures and continued uncertainty in the wider economy.
There is room for cautious confidence, but not complacency. Better-than-expected performance gives organisations some breathing space, yet they still need to pursue growth while keeping a close eye on costs. The ability to adapt quickly as conditions change will remain vital.
Read more: Not Out of the Woods Yet, NIESR
3. A growing trust gap between employees and employers
New findings from outplacement provider INTOO’s Future World of Work report suggest that workplace trust has fallen sharply over the past five years. Seven in ten HR leaders and 69% of managers agree that employees have lost trust in their employers, while only 49% of managers believe trust between employees and senior leaders is currently strong.
HR leaders and managers differ on what is driving the decline. Managers point first to pay and job security, while HR leaders are more concerned about leadership credibility and the lower priority given to wellbeing. The difference matters because it suggests employers may be trying to solve a different problem from the one employees and managers encounter in practice.
Employees are likely to judge trust through everyday decisions rather than corporate statements. Honest explanations, credible leadership and consistent management will matter, particularly when organisations are making difficult choices. If employees see a gap between what is said and what happens, retention is likely to suffer.
Read more: Future of Work Report, INTOO
4. SMEs see AI as a route to growth, not just efficiency
New research from Dell Technologies suggests that SMEs increasingly see AI as more than a productivity tool. Two-thirds (66%) expect it to drive business growth over the next three years, rising to 83% among firms with revenue above £1 million. Productivity is still the leading reason for investing (43%), but better decision-making (30%) and stronger customer experiences (29%) also feature prominently.
The study identifies a group of AI “front-runners” already saving more than six hours per employee each week. Even among this group, 38% say they are still at an early stage of adoption. Their advantage appears to lie less in technical maturity than in supportive leadership, clear use cases, an open culture and a willingness to use a wider range of tools.
SMEs do not need to become technology experts before they begin using AI. They can start by giving people time to test useful applications, learn from the results and build from there. Their flexibility may help: 61% of large businesses identify it as the main advantage smaller firms have when adopting and innovating with AI.
Read more: From AI Ambition to AI Action, Dell Technologies
5. Cost of living remains the public's biggest concern
The latest ONS Public Opinions and Social Trends survey shows that the cost of living remains the issue most often raised by UK adults, cited by 88%. It is followed by the NHS at 78% and the economy at 70%. Nearly three in five adults (56%) said their living costs had risen during the previous month, mainly because of food prices, fuel and household energy bills.
Financial pressure follows people into work. With 61% of adults worried about rising living costs, employers should look closely at whether their pay, benefits, flexibility and wellbeing support reflect what staff are dealing with outside work. The right response will differ by organisation, but ignoring the pressure risks affecting both engagement and retention.
Read more: Public Opinions and Social Trends, Office for National Statistics
6. Beyond headroom: rethinking fiscal sustainability
A new report from the Institute for Public Policy Research (IPPR) argues that the UK’s focus on fiscal “headroom” can narrow the debate about responsible public spending. Rather than judging fiscal rules in isolation, it says they should be considered alongside wider questions of long-term sustainability, including whether government can invest in tackling the country’s underlying economic and social challenges.
There is a useful lesson here for organisations too. Short-term targets can sharpen decisions, but an excessive focus on them may crowd out investment in capability and resilience. The challenge is to work within current constraints without creating bigger problems later.
Read more: Beyond Headroom, IPPR
7. Net zero will create jobs, but skills could become a major constraint
Research from Imperial College London shows the scale of the workforce needed for the UK’s transition to net zero. Building retrofit alone could create 120,000 to 230,000 jobs by 2030. Over the same period, the offshore wind workforce is expected to grow from about 32,000 people in 2022 to more than 100,000. Electric vehicles could add at least 80,000 jobs over the next 10 to 15 years. Skills shortages are already appearing in heat pump installation, electrical engineering, digital skills and marine roles.
The opportunity is substantial, but the training system is not yet keeping pace. Inconsistent policy and funding have held back investment, while people moving out of high-carbon industries will need practical, accessible ways to retrain and develop new skills.
For every organisation, the shift towards more secure and sustainable energy matters because it will influence operating costs, supply chains, investment decisions and resilience. Leaders should consider how changes to energy markets, infrastructure and regulation could affect their organisation, even if they do not work directly in the net-zero economy.
The workforce implications are more specific for sectors delivering the transition, including retrofit, renewable energy, electric vehicles and related engineering and digital services. These organisations will need to identify skills gaps early, invest in retraining and work more closely with education and training providers. Without enough skilled people, the jobs and growth highlighted in the report will be harder to realise.
Read more: Net Zero Skills Report, Imperial College London
8. Customers still want human contact
Research conducted by YouGov for a contact centre service provider found that 90% of UK adults still prefer to speak to a person when contacting a business. Almost three-quarters (74%) strongly favour human interaction, while just 2% would choose an AI system. Among people aged 55 and over, the preference for a person rises to 95%.
Based on a survey of just over 2,000 people, the findings do not mean businesses must choose between AI and human support. Each has a useful role. AI can deal with routine enquiries, bookings and out-of-hours requests, while more complicated conversations still call for human judgement and understanding.
Efficiency matters, but it should not weaken the customer experience. As organisations use more AI, they need to identify which enquiries can be handled well through automation and which still depend on human judgement and personal contact.
Read more: News release via Pressat, Pressat
9. Early wellbeing support could prevent people leaving work
New research from Westfield Health indicates that earlier, more targeted wellbeing support could help people stay in work when their health is affected. Of the 2,303 UK adults surveyed, 75% of those who had left a job because of ill health felt their previous employer had not supported them adequately. Almost two-thirds (63%) believed some form of wellbeing support might have helped them remain in employment.
The findings point to a mismatch between when support is offered and when employees need it. Only 7% of people who had left work had been offered workplace health checks, although 28% said these would have been the most valuable form of help. Counselling, health checks, private healthcare and flexibility around mental health were all more common among people who remained in work.
Support is most useful before absence or resignation becomes the only realistic option. Employees need a way to raise concerns early, managers who can respond appropriately and enough flexibility to make workable adjustments. That can help organisations keep experienced people in work for longer.
Read more: Wellbeing report, Westfield Health
Leadership takeaway
Several of this week’s reports point to the value of acting earlier. Investment decisions become harder when capability has already fallen behind. Trust is more difficult to repair once people have decided to leave, and wellbeing support has limited value if it arrives only at the point of crisis.
AI will play a growing role, but the evidence here suggests that people still notice where human judgement, credible leadership and timely support are missing. Leaders therefore need to be deliberate about what they automate and what they do not. A routine enquiry may be handled perfectly well by a system. A difficult conversation about work, health or trust probably cannot.
