Capterra’s 2025 HR Software Trends Survey highlights the accelerating adoption of AI in HR, rising investments in workforce technology, and the growing focus on skills development and employee experience.
As organizations worldwide grapple with economic uncertainty, skills shortages, and the rapid adoption of AI, Capterra’s latest research reveals how HR leaders are adapting and how they are leveraging technology to transform talent management.
HR is leaning on AI as recruiting costs rise. According to Capterra’s latest research, 49% of organizations currently using AI features in their HR software cite improved recruiting outcomes among the most significant benefits of using this technology.
Capterra’s 2025 HR Software Trends Survey of over 3,200 HR professionals in 11 countries points to four key areas where HR leaders are investing and innovating, offering a practical guide for organizations seeking to futureproof their workforce.
1. HR Leans on AI as Recruiting Costs Rise
Forty-four percent of HR leaders say hiring skilled professionals is one of their top challenges this year, and 59% expect recruiting costs to rise. To address these challenges, organizations are turning to AI-driven recruiting solutions, which can help automate routine tasks, improve candidate matching, and enhance the overall candidate experience. In fact, 49% of organizations currently using AI features in their HR software cite improved recruiting outcomes among the most significant benefits of using this technology.
Nearly two-thirds (63%) of HR leaders expect to grow their workforce in the coming year. Yet, only 42% currently rate recruiting software as a critical business need, despite being one of the top challenges for organizations. This highlights a significant opportunity for companies to leverage advanced tools for smarter, more efficient hiring.
2. AI and Software Skills Gaps Prompt Urgent Focus on Training
Nearly half (45%) of HR leaders cite training and upskilling current employees as their main operational challenge for the next 12 months. And, it’s made more difficult as 68% also expect upskilling costs to increase.
Effective software integration and skilled staff are crucial as companies juggle multiple systems, averaging four HR tools each. Training new users on HR software is the main software-related concern for 48% of HR leaders. Additionally, 43% point to insufficient AI skills on staff as a barrier when adopting AI technology. The survey suggests that investing in talent analytics, learning management, and integrated HR systems can help organizations close skills gaps and drive productivity.
3. AI-Powered HR Tech Leads to Greater Employee Satisfaction
Employee engagement remains a top priority, as 36% of HR leaders cite retaining talent as a challenge this year. The survey finds that, despite being commonly perceived as a deterrent to authentic human connection, AI features can enhance the employee experience. Notably, 43% of HR software users leveraging AI features report increased employee satisfaction or engagement, compared to just 27% of those not using AI. Similarly, 39% of AI users see improved retention, versus 25% of non-users.
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4. Despite AI’s Benefits, HR Leaders Express Concern with Risks
As AI becomes more embedded in HR processes, 46% of HR leaders are concerned with assessing AI’s value and risks. Aside from having skilled staff, the main concerns regarding AI are obtaining quality data, AI literacy, and addressing privacy issues.
Security remains paramount: 67% consider it a critical feature when selecting HR software, and 43% report that security concerns triggered HR purchases last year. The findings highlight the need for robust data management, privacy safeguards, and clear policies to ensure compliance and protect sensitive information.
“As workforce needs evolve, adopting the right HR technology is only the first step,” says Bruno Peláez, senior analyst at Capterra. “Success depends on organizations keeping people at the center of every technology decision, building AI skills to futureproof their workforce, and implementing strategies to engage and retain them.”
For more insights, read the full report and visit Capterra.com to compare software products on the Capterra Shortlist.
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Source: Businesswire
