Only 29% of HR Teams Are Truly AI Ready, Reveals People Matters SHRPA 2025 Report

A staggering 86% of HR leaders across India and APAC say their organisations are ready to navigate disruption, yet only 29% are truly prepared for AI adoption. This key finding from the People Matters SHRPA State of HR Industry – Global Executive Insights 2025 report reveals a critical readiness gap that could hamper long-term transformation.

Launched at Asia’s largest HR and work tech conference, TechHR India 2025, the flagship SHRPA report unpacks insights from over 1,200 HR and business leaders and more than 30 in-depth expert interviews across India, Southeast Asia, the Middle East, and the Pacific-ANZ. Representing organisations influencing $1.7 trillion in revenue and 5.9 million employees, the report delivers an authoritative view on the challenges and imperatives for HR transformation over the next 12 to 18 months.

“It’s no longer about whether to transform. It’s about how fast, with whom, and at what cost,” said Pushkaraj Bidwai, CEO, People Matters. “SHRPA2025 reveals the ambition-execution gap that exists today. While confidence is high, clarity and capability are lagging — especially when it comes to AI. If that’s not addressed now, it will block real transformation.”

Key Highlights from SHRPA 2025:

• AI Readiness Lagging: Only 29% of HR teams say they are AI-ready, despite growing urgency. GenAI adoption remains low, with just 1 in 4 organisations reporting full implementation.

• Capability Gaps Emerging: Internal capability remains the single biggest barrier to GenAI adoption, despite growing tech maturity (+26% YoY).

• Ambition-Execution Mismatch: Only 29% of HR leaders have prioritised AI capability building — signaling underinvestment amid rising expectations.

• Tech Investment on the Rise: With 58% of HR leaders leaning into hybrid or best-of-breed strategies, HR tech budgets are projected to surge by 10–25% in 2025.

• Unclear ROI Hindering Value Realisation: 61% of organisations cite a lack of clarity on ROI as a key challenge, despite 62% now using integrated HR tech (up from 36% in 2024).

• Impact Gaps Persist: HR interventions continue to fall short, with up to 12% gaps across critical business priorities.

Global Shifts Reshaping HR Strategy

The report spotlights rising access to foreign capital and global talent, which now ranks among the top three business strategy priorities, surpassing inflation and policy uncertainty. In an era of borderless talent and innovation ecosystems, organisations must reimagine leadership models, strengthen AI capabilities, and double down on workforce agility.

Strategy

“The real test for HR lies ahead,” said Cheshta Dora, Head of Research and Content Strategy at People Matters. “With external volatility, AI acceleration, and workforce complexity converging, HR leaders must avoid fragmented bets. SHRPA 2025 provides a sharp lens on where to focus — experience, effectiveness, and long-term value.”

A Strategic Blueprint for 2025 and Beyond

The SHRPA 2025 report outlines three strategic imperatives for HR and business leaders:

1. Strengthen HR’s Core Agenda

2. Close Capability Gaps

3. Maximise Tech Value Realisation

As organisations brace for rapid shifts in work and workforce dynamics, SHRPA 2025 offers not just a snapshot but a transformative roadmap, calling on leaders to move beyond optimism to clarity, capability, and commitment.