Key Findings & Highlights:

HR Transformation initiatives continue to enhance experiences whilst driving out inefficiencies, supported by technological investments in GenAI and AI. HR functions are under pressure to deliver ongoing savings whilst facing skills shortages, aging populations, lower workforce participation rates, cost pressures, as well as regulatory and productivity challenges, all of which are drivers for transformational change. The broad HR environment is also experiencing increased legislation with greater focus on AI governance, pay equity, and pay transparency. In this context, securing employee trust and building high levels of employee retention is seen as vital to underpin strong workforce capability, as such, buyers look to better engage employees and offer richer experiences that uplift employee value propositions and build loyalty.

Overall satisfaction with HR transformation services is very high among buyers, although there is an opportunity to invest further in the employee experience offerings. GenAI readiness activity across HR services has been one of the areas of greatest investment. However, evidence of GenAI adoption across buyers remains nascent (as at the time of this publication). The market is poised for change with a high momentum of change expected over 2025 as GenAI continues to develop. Significant efficiency gains offered by readily accessible knowledge and communication support offers significant transformational opportunities in the speed, agility, transparency, and personalization of HR communication. Some buyers cite delays while they await internal approvals and the creation of AI governance bodies.