Capterra’s 2025 HR Software Trends Survey
Sydney, NSW — Australian businesses face growing challenges in hiring, retention, and employee engagement. Capterra’s 2025 HR Software Trends Survey, which included over 3,200 HR professionals across 11 countries including Australia, highlights how HR leaders are using technology to improve talent management. The research identifies four key areas where investment and innovation are happening, providing a clear guide for organisations aiming to secure their workforce’s future.
1. AI Adoption Grows as Recruitment Costs Climb
With 44% of Australian HR leaders naming hiring as a top challenge for 2025, the pressure to attract skilled talent is real. While 69% plan to increase their workforce within the next year and 60% expect recruitment expenses to rise, only 30% of companies using recruitment software see it as critical. Those employing AI-driven recruiting tools report smoother hiring processes, better cost control, and enhanced candidate experiences. Despite AI’s potential, many organisations have yet to fully leverage these tools to stay competitive in a tough talent market.
2. Employee Engagement and Retention Stay Front of Mind
Building a positive workplace culture and reducing turnover remain high priorities. Engagement and upskilling each concern 40% of Australian HR leaders, with 39% focused on retention. Organisations using AI features in their HR software report stronger recruitment results and employee experiences, including higher retention rates (41% vs 28%) and satisfaction (38% vs 30%) compared to those not using AI. Using AI-driven HR tools frees up leaders to focus on relationships and personalised support, driving better employee satisfaction and loyalty through data-informed decisions.
3. Training and Upskilling Gain Importance as Skills Gaps Widen
Training is one of the top operational concerns for HR leaders over the next 12 months. Half of respondents say training new HR software users is their biggest software-related challenge, and 72% expect training costs to increase in 2025. Yet only 35% consider training resources critical when selecting new HR software. Additionally, 44% identify a lack of AI skills among staff as a barrier to adopting AI features. This skills gap limits the benefits organisations can get from advanced HR technology, signalling an urgent need for better workforce development and training programs.
4. Security and Risk Management Gain Focus with AI Use
As AI use grows, concerns about risks and security also rise. Nearly half (49%) of Australian HR leaders are actively assessing AI’s value and risks, while 40% find effective HR software implementation challenging. Security is a top priority, with 50% rating it as critical when choosing HR software and 44% reporting that security concerns influenced recent purchases. Interestingly, 48% of AI users say AI-enabled HR software has helped reduce security risks. This highlights the need for strong data governance and security measures to safely integrate AI into HR systems.
Key Takeaways:
- 69% of organisations plan workforce growth in 2025, but only 30% view recruitment software as essential.
- AI users see higher retention and employee satisfaction, though 44% report lacking AI skills internally.
- Security remains a major concern, with half prioritising it when selecting HR software.
Investing in employee training and security, along with adopting AI thoughtfully, will help HR teams attract, engage, and retain talent effectively. For HR professionals looking to boost AI skills and implement new technologies confidently, exploring targeted training options, such as those available at Complete AI Training, can be a practical step forward.
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