New report shows HR leaders optimistic about AI's impact on department
HR leaders across Australia are future-ready for the adoption of artificial intelligence, which they believe will have a transformative impact on their department.
Findings from the 2025 ELMO HR Industry Benchmark Report found that 51% of HR leaders believe AI will significantly impact their HR department.
Another 32% of the respondents also said it will have a transformative impact on their department, according to the report.
Among the projected impacts of IT tools at work include:
Eliminating repetitive tasks
Removing manual, monotonous work
Speeding up workflows
Enhancing talent acquisition
Enabling more meaningful, strategic tasks
Supporting data-driven decision-making
Rather than an entirely new set of tools, we'll likely see AI incrementally enhance existing HR technology, making processes smarter, faster, and more effective, the report stated.
Is HR ready for AI adoption?
Joseph Lyons, CEO of ELMO Software, noted that despite the enthusiasm for AI, the challenge lies in translating their confidence into effective implementation.
As organisations continue to explore AI's full potential, ensuring the right strategies, skills, and infrastructure are in place will be critical to long-term success, Lyons said in a statement.
According to the report, the majority of Australian HR leaders are ready for the adoption of AI.
Nearly half of the respondents (44%) said they are very ready, while 24% said they are extremely ready for AI adoption.
Growing AI investment
The question about HR professionals' readiness towards AI comes in the wake of growing investment in the technology. ELMO's findings revealed that 57% of HR professionals report an increase in their AI-related budgets in 2025, up from 38% in 2024.
Other areas that will also see increased budgets include learning and development (54%), as well as HR technology (52%).
The report said the key to making AI adoption successful is by upskilling employees, which 27% of HR professionals said is their organisation's number one challenge in the next 12 months.
Their other challenges include:
Cyber/data security threats
Economic outlook
Aligning salaries with market rates
Shortage of in-demand skills
Change fatigue among staff
To successfully work alongside AI, HR professionals must focus on retooling and retraining, fostering transparency and collaboration between technical and human-focused roles, and ensuring AI-driven decisions align with organisational values, Lyons said.
Importance of upskilling amid AI era
Upskilling initiatives have long been pushed as AI tools get adopted in workplaces. The World Economic Forum (WEF) last year said upskilling and development will be key in the coming years to ensure an equitable future of work.
A year later, the WEF's latest Future of Jobs Survey revealed that 77% of employers plan to upskill and reskill their existing workforce to better work alongside AI.
Mukesh Sharma, founder chairperson of Prometheus School, said organisations that integrate AI alongside upskilled employees see greater gains.
Businesses that combine AI's efficiency with human expertise are better positioned for long-term success, Sharma said on LinkedIn. For example, AI can handle routine customer inquiries, but complex or emotionally charged issues still require human intervention.
According to Sharma, there are three benefits that employees can look forward to by upskilling staff in the AI era. They are:
Enhanced productivity - Upskilled employees can harness AI tools effectively, maximising returns on AI investments
Greater innovation - Upskilled teams bring fresh perspectives and can innovate problem-solving
Improved competitiveness - Companies with an upskilling strategy can stay ahead of industry trends
To remain competitive, organisations must pair AI technologies with a workforce that is prepared to leverage them, Sharma said.
https://www.hcamag.com/au/specialisation/hr-technology/are-hr-leaders-ready-for-ai-driven-transformation/530766
