4 HR Tech Trends Driving Future Buyer Decisions

1. Payroll, scheduling, and HRIS tools form the backbone of today’s HR tech stacks

HR priorities influencing software needs

Organizations' current main HR operations challenges are upskilling employees (45%), recruiting talent (44%), supporting well-being and mental health (39%), and improving engagement (38%) and retention (36%). To address these priorities, companies need updated HR strategies and the right mix of software tools. As an HR software vendor, understanding these pain points will help you design and position solutions that align with what buyers need most.

Why it matters to HR vendors

Knowing your customers’ HR tech stack is critical. It reveals where organizations have gaps or overlapping tools, so you can offer solutions that truly add value. By helping companies build a stronger, more integrated HR tech stack, you enable them to tackle top challenges—like recruiting, upskilling, and retention—more effectively. A well-aligned tech stack empowers companies to execute their HR strategies, drive better business outcomes, and stay competitive in a fast-changing market.

Global trend: Companies use an average of four HR tools

According to our survey, organizations rely on an average of four HR software tools, but this number varies with company size. The most common software categories found in these HR tech stacks are payroll, time tracking and employee scheduling, human resources information system (HRIS), recruiting and applicant tracking systems (ATS), and performance management.

As company size increases, so does the HR tech stack complexity. Small businesses focus on foundational tools like payroll and scheduling, prioritizing core operational needs. As organizations grow, their tech stacks expand to include more specialized solutions—such as performance management and recruiting software—reflecting broader HR requirements and more complex workflows. Large enterprises are most likely to adopt a wider range of systems, integrating advanced tools for talent management and analytics to support strategic HR initiatives. 

2. Vendors can capitalize on the growing demand for upskilling and talent management solutions

Companies expect HR technology costs to increase

Most organizations plan to spend more on HR technology this year—70% of HR leaders expect HR software costs to rise, and 60% plan to boost investment, mainly to improve their HR tools. Large enterprises lead with 69% planning higher spend, followed by 63% of midsize businesses and 50% of small businesses. One of the main challenges organizations report is determining which software could address current HR needs and fill existing gaps.

Why it matters to HR vendors

Knowing where companies plan to invest in HR software helps you identify real opportunities to fill gaps or enhance their existing tech stacks. By offering products, upgrades, or integrations that match buyers’ priorities, such as talent management, adopting or improving learning management systems (LMSs) or engagement tools, you can address their most pressing HR challenges. For organizations, choosing the right software is key to boosting efficiency (60%) and productivity (51%), benefits already seen by a majority of adopters. Aligning your solutions with these needs makes your offering more relevant and valuable.

Global trend: Purchase forecast  

Over the next 12 months, organizations worldwide are prioritizing new HR software purchases in areas that support workforce development and engagement. The most commonly planned investments are in succession planning (28%), HR and talent analytics (26%), LMS (26%), talent management, workforce management (WFM) or human capital management (HCM) (26%), and employee engagement tools (25%). 

Each business size segment has distinct investment priorities. Small businesses are focusing on tools that help them address immediate HR needs, such as employee engagement and talent management, often to support growth and improve retention, but also consider a succession management tool. Midsize companies show an interest in learning management and analytics as they scale their workforce and seek more data-driven insights. Large enterprises, on the other hand, prioritize advanced tools for succession planning, analytics, and onboarding, demonstrating a need for more comprehensive talent management and integration with existing processes. 

3. Integrations and AI capabilities are driving HR software purchasing decisions

In-demand capabilities for HR software

Organizations are seeking HR software that can keep pace with evolving needs, especially tools that integrate well, offer AI-driven capabilities, and scale as they grow. While security and functionality remain essential criteria, 85% HR leaders now expect AI features to play a role in their purchasing decisions.

Why it matters to HR vendors

To stay competitive, you need to deliver solutions that integrate with existing tech stacks, provide valuable AI enhancements, and maintain effective security standards. These factors are not only key to winning new business, but also to keeping customers satisfied.

Global trend: Integrations and AI capabilities are driving HR software purchases

No matter the business size, organizations are prioritizing HR software purchases that improve integrations (56%), add AI capabilities (54%), and expand functionality (48%). Security is also a leading motivator (43%), and many are upgrading due to outgrowing older systems (36%). When evaluating options, companies consistently rate security (67%), functionality (57%), ease of use (48%), and integration (46%) as their top criteria.

Beyond the focus on integrations and AI, the data shows that ease of use and customer support are also significant factors in the buying process. Even as organizations seek advanced features, they continue to value software that is straightforward to implement and backed by responsive support teams. This suggests that while innovation is important, you shouldn’t overlook the basics—clear onboarding, intuitive interfaces, and accessible help remain effective differentiators in the market.

4. Training and implementation remain top challenges for HR software adoption

The software adoption hurdles HR teams face

Organizations are under pressure to quickly adopt new HR technologies to stay competitive, but the pace of change often outstrips their ability to adapt. Many HR teams are dealing not only with the technical aspects of onboarding new systems, but also with change management—helping employees embrace new workflows and processes. Uncertainty around the benefits and risks of AI, and a lack of internal expertise, add to the complexity.

Why it matters to HR vendors

By understanding these adoption challenges, you can design solutions and resources that directly address buyer concerns. Simplifying onboarding, offering reliable training, and providing clear guidance on AI features can help you position your product as a supportive partner, making it easier for organizations to choose and stay with your solution.

Global trend: Skills and implementation are the main challenges

Across all business sizes, effective implementation and training new users are among the most common HR software challenges. AI adoption brings its own set of hurdles, with concerns about AI skills on the staff, data quality, transparency, and privacy ranking high. 

The data shows that challenges like training, implementation, data quality, and understanding AI are closely linked rather than isolated issues. Addressing these areas together—rather than separately—can help you support buyers more effectively as they adopt new HR software. By taking a holistic approach, you can reduce friction and build greater trust throughout the adoption process.

Adapting to evolving HR technology needs

Recent HR software trends reveal that organizations are prioritizing payroll, scheduling, HRIS, and talent management, while also seeking tools with strong integration and AI capabilities. For HR software marketers, these insights are a chance to refine ICPs, sharpen messaging, and address buyers’ most urgent needs, such as upskilling, employee engagement, and seamless onboarding. By focusing on these priorities and clearly communicating your product’s strengths, you can better connect with today’s buyers, improve retention, and support business growth as HR technology needs evolve.

Sources

* Methodology
Gartner Digital Markets’ 2025 HR Software Trends Survey was conducted in April 2025 among 3,256 respondents in Australia (n=278), Brazil (n=300), Canada (n=289), France (n=300), Germany (n=300), India (n=294), Italy (n=300), Mexico (n=300), Spain (n=300), the U.K. (n=296), and the U.S. (n=300). The goal of the study was to understand the HR software that companies are buying, their benefits and challenges, and the impact of AI on HR. Respondents were screened for employment at companies with more than one employee, working in management-level roles or above. Respondents were also confirmed to be at least partially responsible for HR software purchase decisions within their organization. 

For the purposes of this report, small business is defined as having 2-250 full-time employees, midsize business as having 250-1,000 full-time employees, and large enterprise as having more than 1,000 full-time employees.