Although most HR professionals understand the potential impact of artificial intelligence on their industry, many still are learning how to harness its potential. Organizations that have implemented human capital management platforms report a 500% increase in AI and machine learning use, and a 44% rise in data-driven decision making, a new survey from Strada and ISG found.
The study of 190 global companies in multiple industries found that more than 9 in 10 surpassed the industry benchmark, compared with half of such projects that typically fail. This success is reflected in measurable improvements across HR operations, from greater automation and integration to a stronger reliance on data in decision making. Key improvements include a 66% rise in system integration, a 55% increase in process automation and a 49% reduction in HR processes being described as complex.
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Organizations that achieved the most significant improvements began by simplifying processes, adopting best-practice configurations and building modern operating models:
- Before deployment, only 12% of companies described their HR processes as somewhat easy.
- After deployment, this figure increased to 45%, with a further 10% describing their process as significantly easy. No company described its processes as very complex after deployment.
- Levels of automation also improved, with “mostly automated” processes nearly doubling from 25% to 45%.
“Success starts with strong foundations -- a solid platform that drives agility and growth, best-practice configuration and a modern operating model built for the future that supports the business at every step,” said Sean Campbell, strategic advisor at Strada. “With this in place, organizations are well positioned to embrace cutting-edge innovations like AI, machine learning and the limitless possibilities of agentic AI (an AI system designed to achieve specific goals with minimal human supervision)."
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Despite this progress, AI use remains inconsistent. Although adoption has surged, 68% of companies say they still use AI and machine learning only rarely or sometimes, which limits the full value of their investment. This gap often is linked to a few persistent challenges, such as data security concerns, trust in AI insights and the need for deeper internal expertise.
However, 9 in 10 organizations already have taken steps to enhance digital skills, particularly in emerging areas such as AI and machine learning. Only 4% said they had no skills in this area and 34% described their capabilities as still developing, underlining the need for ongoing learning and development.
"HCM transformation is more than just implementing new technology,” said Gaurang Pagdi, principal analyst at ISG. “It is about enabling HR to drive business growth, foster engagement and unlock the full potential of its workforce."
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
