With economic pressure on companies and talent shortages, HR leaders increasingly look to AI in HR to simplify operations and improve talent outcomes, Capterra’s 2025 HR Software Trends Survey says. The report, drawing from the views of more than 3,200 HR practitioners in 11 nations, points to four key areas where HR leaders are adopting innovation and yet still encounter obstacles.
- Increasing Recruiting Expenses Drive HR Towards AI Solutions
Recruiting continues to be an utmost priority, with 44% of HR executives naming the challenge of bringing skilled professionals onto the team and 59% anticipating higher recruitment expenses. To address it, most are embracing AI-powered recruiting platforms that automate processes, better match prospects, and enhance the entire hiring process.
Today, 49% of organizations applying Artificial Intelligence in Human Resource software see more potent recruiting outcomes, but only 42% identify recruiting technology as a top business initiative. This inconsistency indicates a lost opportunity for most companies to capitalize more strategically on AI in talent acquisition.
- Training and Skills Gaps Hinder AI Adoption
Upskilling and training have become critical operational challenges. 45% of HR leaders rank workforce training as their top challenge for the coming year, and 68% anticipate training expenses increasing.
As organizations manage a typical four HR tools, the demand for good software integration and new user onboarding is on the rise. Almost half (48%) identify training new users as their number one concern, and 43% mention lack of artificial intelligence ability as a hindrance to complete adoption of AI-enabled platforms. According to Capterra, investments in talent analytics, learning management, and integrated HR systems must be prioritized in order to bridge these gaps.
- AI Increases Employee Engagement and Retention
Contrary to doubts about AI substituting human interaction, Capterra’s results indicate otherwise. Among HR professionals leveraging AI capabilities, 43% experience increased employee satisfaction, and 39% achieve better retention results versus only 27% and 25%, respectively, among those who do not utilize Artificial Intelligence in HR.
As talent retention becomes more difficult, 36% of HR leaders name it a key challenge this year: the right use of AI can significantly enhance employee engagement and workplace experience.
- HR Leaders Acknowledge AI’s Benefits But Worry About Risks
Though optimism about AI is increasing, 46% of HR leaders remain uncertain to evaluate the risk and worth of Artificial Intelligence investments. In addition to the talent gap, data quality, Artificial Intelligence literacy, and privacy risk are the issues.
Security is an ongoing top-of-mind concern. 67% view it as a key consideration when choosing HR software, and 43% report that security issues influenced buying decisions last year. The report emphasizes the need for strong data governance, compliance guidelines, and concise AI usage policies.
Technology by itself won’t future-proof the workforce,” noted Bruno Peláez, Senior Analyst at Capterra. “Companies need to put people at the center of every AI decision, develop AI capabilities internally, and execute plans that drive engagement and long-term retention.
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News Source: Businesswire.com
