“The State of AI & Automation for HR: 2026 Benchmarks Report” has been released by Phenom and indicates an alarming disparity between the potential of AI and automation technology for Human Resource departments and the manner by which the technology is currently employed by organizations. With the State of AI & Automation for HR: 2026 Benchmarks Report showing that fully 83% of organizations have low maturity levels for the technology, the majority of organizations have yet to fully leverage the power of advanced HR technology.
This report has rated almost 500 organizations across industry sectors, ratings based on a maturity model that rates the level of intelligence (AI capability) and automation achieved. Data shows that although most organizations have already experimented with AI, few organizations have moved to high levels of adoption, with less than 1% having high intelligence and 5% having high automation levels; most, with 86% for intelligence and 83% for automation, having been classified under assisted or semi-automated levels where tools assist but are not embedded within HR processes.
What the Findings Reveal About HR Technology Adoption
The discrepancy highlighted although there is recognition by organizations of the need for, or value of, AI and automation, there is difficulty for some organizations in implementing it. This is evidenced by the following finding from a survey involving over 100 HR professionals sent out along with the report:
76% cite automating manual processes and improving recruiter productivity as the number one reason to implement AI.
66% of the respondents say that their organization has low and no adoption of artificial intelligence in talent management.
53% of them focus on AI for candidate engagement and matching.
30% admit they know little about AI application in HR.
These findings indicate that the interest in AI is quite high but the capability to effectively implement it, especially in use cases like expert candidate screening, talent analytics in real-time, candidate experience personalization, and retention automation, is low.
Implications for the HR Industry
- The Role of HR Must Go Beyond Experimentation
From the data, it is clear that HR departments are still operating in a pilot-first approach when it comes to AI and automation. This is holding back HR departments and causing them to operate in more of an operations-based approach as opposed to being able to change strategic outcomes. HR departments need to move forward by investing in infrastructure, change management, and training employees so that AI can be integrated into their processes.
- High-Volume and Manual Processes Have the Highest Priority
“The main application of automation is in discrete tasks such as interview scheduling and candidate nurturing,” according to the report. These applications of automation are useful but do not transform the effectiveness of HR, according to the report. “Moving up the chain of higher maturity involves leveraging AI applications in more strategic functions such as predictive talent modeling, skills matching, and personalization of the employee experience.”
- Skills and Knowledge Gaps Need Addressing
This is especially because a major obstacle in progress is the relative ignorance of HR practitioners about AI application best practices. This requires training, upskilling, and even developing best practices in responsible and ethical AI application. Organizations not developing such capability risk being left behind by competitors who apply AI more fervently and effectively.
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Broader Effects on Businesses
Competitive Advantage in Talent Acquisition and Retention
Those that are more advanced in terms of AI and automation maturity will benefit greatly from this. For instance, the use of AI to qualify candidates and automated recruiting processes can improve time-to-hire, bias, and quality of hire, all adding up to greater revenue performance because they will acquire the right candidates to help the firm perform better financially.
Operational Efficiencies and Cost Savings
Mature AI can automate routine processes such as screening resumes, conducting interviews, or hiring. This allows HR professionals to concentrate on employer branding, employee development, or organizational planning. This will significantly enhance their efficiency, especially if there is high growth or changing competition.
Improving the Employee Experience
Artificial intelligence and automation can enable more personalized experiences for employees, from recruitment marketing to career paths. Companies that ignore opportunities for artificial intelligence will offer candidates and employees antiquated, manual processes that will lead to disengagement and turn over.
Conclusion
In highlighting these findings from the Phenom Benchmarks report, it is clear that a state of low maturity exists among AI and automation within HR departments, where there is a great deal of interest and use of simple technology. It is a challenge and an opportunity for HR teams, because the companies that focus on a strategic, smart approach to HR technology will have a competitive advantage when it comes to talent attraction and productivity and growth.
