Work IQ

What it does

Work IQ is the intelligence layer that sits under Microsoft 365 Copilot and its agents. It grounds them in your organisation's work data and keeps a memory of how people and teams actually work, then passes that context to Copilot and to agents, including agent-to-agent handoffs.

Key facts

Announced at Ignite 2025 (November 2025) as the reasoning and grounding layer for Copilot and agents.
Two parts: your work data (emails, files, meetings, chats, calendar) that captures how work gets done, and memory of style, preferences, habits, workflows and working relationships.
Uses these signals to match a request to the right agent and to give role-aware context rather than a cold prompt.
Work IQ for custom agents lets you build agents tuned to your workflows, grounded in the same layer, through Copilot Studio or via API for pro-code work.
Grounding respects existing permissions, sensitivity labels, compliance controls, audit, logging, monitoring and policy enforcement.
Sits alongside Fabric IQ (business entities and data in Microsoft Fabric) and Foundry IQ (managed knowledge grounding) as the three "IQ" layers.
Shares context across agents, so a delegated agent inherits relevant working context instead of starting blind.
Part of the wider Agent 365 and "Frontier Firm" positioning; some capabilities are still rolling out through 2026.

When to use / skip

You don't switch Work IQ on and off; it's the substrate Copilot runs on. The real decision is whether to build custom agents on top of it. Do that when a workflow is repetitive, org-specific and benefits from knowing the person and their recent work. Skip the custom-agent route for one-off tasks where stock Copilot chat already has the context in front of it.

Configuration decisions

Decide which content Work IQ can reach through Microsoft 365 permissions and sensitivity labels before building agents on it, not after.
Choose Copilot Studio (low-code) or the API (pro-code) for custom agents depending on who owns the build.
Confirm your audit, logging and policy tooling covers agent activity, since agents inherit these controls but someone has to watch them.
Work out where Work IQ ends and Fabric IQ or Foundry IQ begins for grounding on structured business data or curated knowledge.

Gotchas

Work IQ is only as good as the underlying data hygiene and permissions; oversharing at the SharePoint layer becomes oversharing at the agent layer.
Memory of "how you work" raises reasonable questions from users and works councils about what is being retained; get ahead of it.
The three IQ layers are easy to conflate in a pitch; be precise about which one grounds which kind of data.
Much of the custom-agent and agent-to-agent context sharing landed in late 2025 and is still maturing, so check current availability before committing a design.

Consultant notes

Position Work IQ as plumbing, not a feature to sell. The client-visible value shows up in agent quality and Copilot relevance.
Data governance readiness is the gating factor for any Work IQ story. Lead with a permissions and sensitivity-label review, not with agent demos.
For clients already nervous about Copilot grounding, Work IQ is a chance to show controls (labels, audit, policy) rather than to gloss over them.
Tie it to the Agent 365 conversation early; clients who want fleets of agents need to understand what shared context buys them and what it exposes.

Check current availability of Work IQ for custom agents and agent-to-agent context before you design around it; this moved fast through 2026.