I’m thrilled to sit down with Marco Gaietti, a veteran in the field of business management with decades of experience in management consulting. Marco’s expertise in strategic management, operations, and customer relations makes him the perfect person to unpack the latest trends in HR technology. Today, we’ll dive into the evolving role of AI in HR, shifts in technology spending, and how HR is positioning itself as a strategic partner in organizations. Our conversation draws from key insights in recent industry surveys, exploring how these developments are reshaping the HR landscape.
How has the rise in AI adoption, jumping from 23% to 31% in just a year, changed the way HR functions operate in organizations?
The increase in AI adoption is a game-changer for HR. It’s not just about automating routine tasks; it’s about enabling HR to focus on strategic priorities. AI is taking over repetitive processes like resume screening and employee inquiries, freeing up time for HR professionals to tackle bigger issues like talent development and organizational culture. This shift is also pushing HR teams to upskill, as they need to understand and manage these tools effectively. It’s exciting, but it comes with a learning curve.
What do you see as the main drivers behind this rapid growth in AI use within HR?
A big driver is the demand for efficiency. Companies are under pressure to do more with less, and AI offers a way to streamline operations without sacrificing quality. There’s also a growing recognition of AI’s potential to deliver insights through data analytics—think predictive hiring or employee retention models. Plus, the technology has become more accessible and affordable, even for smaller organizations, which has fueled this surge.
With HR tech spending up by 39% this year, what’s fueling this significant investment?
Organizations are prioritizing tech that can keep them competitive, especially intelligent tools like AI-driven platforms. There’s a realization that outdated systems can’t support modern workforce needs, so companies are investing in solutions that enhance employee experience and decision-making. This spike also reflects a catch-up mentality after years of underinvestment—firms are finally addressing gaps in their tech infrastructure to stay ahead.
How does this year’s increase in spending stack up against the broader downward trend we’ve seen since 2020?
While we’ve seen a 29% drop in HR tech spending since 2020 due to economic uncertainty and budget cuts, this year’s 39% increase signals a turning point. It’s not a full recovery to pre-2020 levels, but it shows that organizations are starting to see HR tech as a critical investment rather than a cost. The focus on AI and intelligent tools is a big reason—companies are betting on these innovations to drive long-term value.
Considering that 37% of organizations plan to boost their HR tech budgets, what factors are influencing this decision?
A lot of it comes down to strategic alignment. Companies see HR tech as a way to support broader business goals, like improving productivity or attracting top talent. The push for digital transformation across industries is another factor—HR can’t lag behind when other functions are modernizing. Also, the success stories of early adopters are encouraging others to invest, especially in AI and analytics tools that promise measurable outcomes.
Why do you think a small percentage of organizations are still planning to cut back on HR tech spending?
Some organizations might be facing financial constraints or prioritizing other areas like operations or marketing over HR tech. Others could be skeptical about the ROI of these investments, especially if past implementations didn’t deliver as expected. There’s also a segment that might feel their current systems are “good enough” for now, even if they’re not cutting-edge, so they’re holding off on new spending.
AI adoption seems to vary widely by organization size. What’s behind the 50% increase in AI use among small companies?
Small companies are often more agile, so they can adopt new tech like AI faster without the bureaucracy of larger firms. They’re also under pressure to compete with bigger players, and AI offers a cost-effective way to level the playing field—whether it’s through better hiring tools or automated HR processes. Plus, many AI solutions now come with lower entry costs, making them accessible to smaller budgets.
What’s driving the 42% jump in AI adoption among mid-market companies compared to just 5% growth at enterprise levels?
Mid-market companies are in a sweet spot—they have more resources than small firms but less complexity than enterprises. They’re often focused on scaling, and AI helps them manage growing workforces efficiently. Enterprises, on the other hand, already had higher baseline adoption at 40% last year, so a 5% increase isn’t as dramatic but still significant. Large organizations also face challenges like integrating AI into legacy systems, which slows their pace.
Surveys show better outcomes when standalone AI tools are used alongside embedded AI in HR systems. Why do you think standalone tools are proving so effective?
Standalone tools, like certain chat-based AI platforms, are often user-friendly and don’t require complex integration, so HR teams can start using them right away for tasks like drafting communications or brainstorming ideas. They’re flexible and allow for experimentation without overhauling existing systems. This adaptability lets HR professionals see quick wins, which builds confidence in AI overall.
Given that only 12% of organizations report having embedded AI in their HR systems, what challenges are holding others back?
Embedding AI into HR systems is a heavy lift. It requires significant investment in infrastructure, training, and change management. Many organizations struggle with legacy systems that aren’t compatible with new AI tech, and there’s often resistance from staff who fear disruption. Data privacy and security concerns also loom large—embedding AI means handling sensitive employee data, and not every company is ready to navigate those risks.
It’s striking that 81% of HR professionals are using ‘bring your own’ AI tools for personal work. How do you see this trend impacting the workplace?
This trend highlights a grassroots adoption of AI, which can be both a strength and a risk. On one hand, it shows HR professionals are eager to leverage AI to boost their productivity, often filling gaps where company-provided tools fall short. On the other, it raises red flags about data security and compliance—using personal or free AI tools without oversight can expose sensitive information. Companies need to address this by providing sanctioned tools and clear guidelines.
Looking ahead, what is your forecast for the role of AI in shaping HR strategies over the next few years?
I believe AI will become the backbone of HR strategy, moving beyond tactical tasks to influence high-level decision-making. We’ll see deeper integration into areas like talent management, employee engagement, and even diversity initiatives, with AI providing insights that were previously unattainable. The challenge will be balancing innovation with ethics—ensuring AI is used responsibly to avoid bias and protect privacy. It’s an exciting time, but HR leaders will need to stay proactive to harness AI’s full potential.
