Trends in HR Technology for 2025

Ongoing economic uncertainties, a challenging labor market, and complex work arrangements have altered workforce dynamics for many businesses over the past several years. At the same time, technological innovations have introduced new and more efficient tools and resources to support employees and drive business growth.

While it's impossible to know precisely what the future of HR looks like, human resource professionals are often responsible for understanding how to make ongoing investments in workplace development and efficiency. HR trends in 2025 emphasize using HR technology to make intelligent business decisions, improve the employee experience end-to-end, and continually develop a skilled, savvy, and empowered workforce.

Below, we identify some of the most pressing HR technology trends that are likely to shape the future of HR in 2025 and beyond.

What Is HR Technology?

HR technology encompasses hardware, software, online platforms, and mobile applications used to support human resource tasks and responsibilities. Payroll, employee benefits, and recruiting and applicant tracking are just a few examples. More recent developments in HR technologies help address a broader range of challenges—everything from platforms to support remote and hybrid work environments to using artificial intelligence (AI) and intelligent analytics.

A new generation of employees, many of whom have come to expect a technology-forward workplace, is helping to fuel this surge in HR technology use. Businesses can use more online resources and technological innovations to boost efficiency and adapt to these changing expectations.

HR Technology Boosts Efficiency

HR leaders have increasingly found new opportunities to connect and communicate with employees using human resources technology thanks in no small part to pandemic-era remote working restrictions. "Long gone are the days of handing out hard copies of employee handbooks and annual handbook update replacement inserts," said Paychex HR Coach Jarryd Rutter, PHR, SHRM-CP. Consequently, businesses may realize that now is the right time to capitalize on trends in HR tech and upgrade their systems to be more efficient and help them:

• Manage compliance with applicable employment laws and regulations
• Recruit, hire, and onboard new employees
• Track time and attendance
• Process payroll for employees
• Maintain up-to-date employee information
• Communicate quickly to employees about time-sensitive information
• Manage employee performance and development

As companies grow, advances in human resources technology can help HR teams become even more engaged in their company's overall strategic objectives. New HR technologies generate measurable results by enhancing the pace and efficiency of managers and their teams. HR and IT professionals often support these individuals and teams, help them determine where technology works best, and implement it to achieve maximum success.

10 Trends in HR Technology for 2025

As we look ahead to 2025, technology trends in HR point to solutions that enhance business operations and create positive employee experiences. As the role of HR continues to expand in many workplaces, HR technology can help automate much of the work involved in areas such as applicant tracking, new-hire training, and benefits administration.

For 2025 and beyond, future HR and technology trends anticipate:

• Centering the employee experience
• Retaining employees with upskilling, reskilling, and ongoing learning
• Leveraging virtual and augmented reality for employee training
• Integrating flexible work models
• Managing a growing contingent workforce
• Demonstrating commitment to diversity and inclusion
• Using generative AI responsibly
• Prioritizing data-driven decision-making
• Addressing cybersecurity concerns
• Investing in blockchain technology for HR

1. Centering the Employee Experience

A positive employee experience is critical for retaining top talent and reaching peak productivity. As workforce needs and expectations evolve, HR leaders must move beyond simply focusing on employee engagement or specific steps in the employee lifecycle. From the recruitment process to well after an employee's last days on the job, the employee experience (EX) includes every touchpoint and interaction with your company.

HR technologies that streamline and optimize the employee experience can help improve retention, reduce turnover, and boost productivity. Employee experience technology, or EX tech, can improve the end-to-end employee experience and business outcomes. Here are some ways it can be used:

• Recruiting and hiring: AI tools can help streamline the recruitment process supporting pre-screening, scheduling interviews, and personalizing the candidate experience. HR leaders can also use an applicant tracking system to add automation to resume screening and responsibly assess candidate fit.
• New-hire training and onboarding: Focusing on employee experience when onboarding an employee can favorably affect workplace efficiency, accelerate training and development, and help drive results in a healthier, more collaborative company culture. During the onboarding process, use your HCM (Human Capital Management) platform to automate task lists and reminders, create a central location for training information and resources (including your employee handbook), and create feedback loops to monitor progress. You can also implement AI-powered chatbots to guide new employees and help answer questions. Using this tech can create a consistent experience for new hires and legacy employees alike.
• Benefits offerings: To remain competitive, you may need to rethink your benefits programs. Technology in HR can help you identify benefits that resonate most with today's job candidates and rapidly compare benefit program costs and offerings. It can also help support your employees’ benefits selection and enrollment.
• Employee training: Offer training opportunities through learning tools and technologies, industry conferences, or online training resources. Microlearning modules for in-the-moment training and virtual reality scenarios for skills training can also help employees prepare for future career growth.
• Employee wellbeing: Every employee deserves a safe and healthy work environment. Programs addressing physical needs, mental health, and work/life balance for in-person workers, remote workers, and those on a flexible work schedule can go a long way toward keeping employees engaged and productive. Start by allocating benefit dollars toward resources such as an employee assistance program (EAP), mental health services, and digital coaching platforms. Monitor employee well-being through surveys, polls, and focus groups, prioritize policies that protect against burnout, and use tools to monitor hours worked, breaks, and PTO. Remote and distributed workers may use social connection tools to maintain a sense of inclusion and belonging with colleagues.

2. Retaining Employees With Upskilling, Reskilling, and Ongoing Learning

New performance management techniques are transforming the way businesses prioritize their retention efforts. For instance, investing in professional development can help employees sharpen skills in critical areas and show a commitment to prioritizing their career growth. Upskilling (training that builds upon an employee's current skills) and reskilling (training an employee for an entirely different job) programs can be worthwhile investments in your business's future, your employees' success, and helping an employee in their individual career path.

Offering development opportunities through learning management software, and in-the-moment training modules can create a sustainable workforce and empower employees to grow within the organization.

3. Leveraging Virtual and Augmented Reality for Employee Training

Today's tools offer realistic, immersive training that is ideal for learning new skills, simulating real-world training scenarios, and creating safe environments to practice high-risk tasks.

Virtual and augmented reality tools can also make training engaging, improve retention, and motivate employees to grow their skills. If you have large groups of employees to train, a secure virtual environment can make it easier to practice skills on location without special equipment.

4. Integrating Flexible Work Models

Adopting location flexibility, hybrid work, and flex scheduling may boost employee engagement, productivity, and retention. With the rise of remote and hybrid work models, employers and HR teams should create a consistent work environment that keeps workers on-task and engaged.

Building a thriving flex work environment includes investing in technology tools that foster collaboration, communication, and connection among team members. Managers can use these tools to create team-building opportunities, monitor progress, and provide coaching and feedback. In addition, a feature-rich HCM platform can help you conduct onboarding and training, oversee performance management, and keep lines of communication open between employees and HR.

Flexible work can also be a key differentiator in talent acquisition and retention. Embracing a remote or partially remote workforce model may allow you to substantially expand your candidate pool and ensure a talent-rich workforce, noted Rutter.

5. Managing a Growing Contingent Workforce

The contingent workforce includes independent contractors, temporary workers, freelancers, consultants, agency workers, and others who provide services for your company in a non-traditional capacity. The number of contingent workers has grown rapidly since 2020, and more organizations use them for non-core tasks like content development, graphic design, IT services, software implementations, and accounting.

Contingent workers are an extension of your workforce, and the right technology tools can help them remain connected and integrated with your teams. Communication and chat tools, project management platforms, vendor management systems, and even specialty platforms designed for contingent workers may be wise investments for organizations looking to support their contingent workforce better, while maintaining clear delineation between employees and independent contractors.

6. Proving Commitment to Diversity, Equity, and Inclusion

Diversity, equity, and inclusion (DEI) is an organizational priority and core business strategy that has gained a much-needed foothold in companies worldwide. By recognizing the value of diverse perspectives, businesses can show a commitment to creating inclusive environments.

However, creating and fostering an inclusive and diverse work environment requires more than simply recognizing differences among your workforce. It also means recruiting, hiring, retaining, and developing employees from many backgrounds, ensuring their voices are heard and incorporated, and providing them equal access to success within your organization.

Here are some HR technology tools you can use to help support these initiatives:

• Automated skills assessments
• Recruiting tools that help minimize bias around hiring decisions
• AI tools to assist with creating unbiased job postings subject to human-review
• Analytics tools to assist in reviewing compensation across the organization
• Anonymous surveys to encourage inclusivity and belonging and improve company policies

7. Using Generative AI Responsibly

Less than 2 years since ChatGPT was released, and workplaces have already been dramatically affected. Generative AI (GenAI) has dominated news cycles in 2024, and hundreds of tools are now available for various tasks. Many productivity platforms have GenAI built into their interfaces, and employees can tap into them to help with writing content, creating images, assessing data, and much more. The Paychex Pulse Survey found that over 75% of HR leaders in companies with 20 or more employees said they'll use AI in the next 12 months.

GenAI offers many opportunities, but it's also essential to understand the potential drawbacks. Set guidelines, and train employees to use AI responsibly and to recognize the limitations of GenAI tools, including:

• Inaccurate or inconsistent outputs (e.g., hallucinations) or outdated information and statistics.
• Security risks for intellectual property and privacy.
• Potential bias if data is not diverse and if GenAI models are not continuously evaluated.
• Ethical concerns about copyrighted material, use of images without permission (e.g., deepfakes), and misrepresentation of viewpoints or personal information
• The AI regulatory landscape is rapidly evolving creating new compliance challenges.

8. Prioritizing Data-Driven Decision-Making

Using data to make business decisions isn't a new concept, but smaller businesses may be especially slow to adopt data analytics tools. The Paychex Pulse Survey found that companies with 5 to 19 employees were less concerned with gathering insights from data and analytics than with other priorities such as employee productivity, engagement, and retention. They were also more likely to handle HR functions manually.

If your business hasn't explored the possibilities of analytics, 2025 is the year to start. HR technologies are rapidly evolving, and companies of all sizes that invest in HR analytics can create a solid foundation to make data-driven decisions about hiring, staffing, benefits administration, employee engagement, and much more. Investment in data analytics technology can also demonstrate the value of human resources as part of an effective, modern HCM strategy.

9. Addressing Cybersecurity Concerns

As technology evolves, so does the potential for cyberattacks and data breaches.

And these risks are top of mind for business owners and HR leads: According to our 2025 Priorities for Business Leaders survey, the top technology obstacle for business leaders to overcome was data security/employee data privacy (56%).

Safeguarding employee data and maintaining strong cybersecurity policies and practices require increasing vigilance as HR departments adopt new technology. Here are some critical areas to consider:

• Compliance with privacy laws: Ensure compliance with national and international laws and regulations such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). These laws govern how personal data may be used and protect individual rights to privacy and security.
• Identity and access management (IAM): IAM tools manage password credentials, digital identity, and access rights to ensure that only authorized individuals can access your company network and data.
• Data encryption: Encryption ensures that information is kept private as it travels over the network. Use encryption technology to secure devices, protect personal and financial data, and safeguard virtual private networks (VPN).

• Cybersecurity training: Implementing training for all personnel including senior executives, to raise awareness. Training can include exercises to better prepare employees for identifying potential AI-driven social-engineering attacks.

10. Investing in Blockchain Technology for HR

Blockchain technology creates a decentralized, secure database that is difficult to hack. It also creates a single source of truth for data and enables permanent data records, making it ideal for storing documents, contracts, and other sensitive information.

Blockchain is still an emerging technology, but it has already demonstrated several use cases for human resources:

• Recruitment: Verify a candidate's credentials, skills, and prior work history.
• Employee Data: Store personal information securely, including contracts, salary information, and performance history.
• Smart contracts: Smart contracts can automatically execute the terms of an employee agreement. This may include automating reimbursements, ensuring compliance with employment terms, calculating taxes, and simplifying the onboarding/offboarding process.
• Payroll: Automate payments and easily manage interstate and international transactions securely.
• Compliance: Maintain secure audit trails and track compliance with regulatory guidelines.

Use HR Technology To Fuel Success

Today's businesses must contend with era-defining workplace changes and technological evolution reshaping our work. Whether you plan to invest in a comprehensive HCM solution or add best-of-breed tools to your existing platform, human resource technology can simplify complex HR administrative functions, free up resources, and create more efficient processes. Discover how HR technology can help your business better align with emerging trends in human resources and develop a thriving workplace.