Analysts Signal a Shift in HCM Software: 4 Ways Leaders Can Prepare
As the market for human capital management (HCM) software evolves, analysts are signaling a shift toward a more unified, technology-focused approach that emphasizes personalization and proactive insights. This transformation, influenced by advancements in artificial intelligence (AI) and people analytics, presents a unique set of challenges and opportunities for HR and business leaders at midsized companies.
Below are four ways leaders can adopt this approach and achieve stronger technological outcomes for people and business initiatives moving forward.
1. Embrace next-generation HCM solutions
Two recent industry analyst evaluations, The Forrester Wave™: Human Capital Management Solutions, Q4 2025 and NelsonHall's HCM Technology & GenAI: The Workplace of the Future 2025 NEAT,noted the focus is on adopting innovative HCM software solutions, particularly AI. By implementing AI that makes operations, including payroll and compliance management, more efficient, organizations can stand out in a competitive market and more vigorously support their workforces, customers and partners, facilitating better business outcomes.
For example, embracing an HCM system that uses AI to provide actionable insights can empower managers to make informed decisions that align with broader business and workforce goals. As firms shift toward these solutions, the focus shouldn't be on technology for technology's sake but on creating meaningful experiences for people, clients and business associates at every level.
2. Prioritize transparency
As analysts emphasize the importance of transparent and cost-effective pricing structures in HCM solutions, leaders can heed their guidance by promoting transparency in their own daily practices. Transparency extends beyond pricing to how leaders communicate changes and build trust with employees, customers and stakeholders. Ultimately, cultivating an open dialogue about the implications of new technologies and processes can help organizations foster more engaged, informed and trusting relationships, creating opportunities for success in the future. Additionally, understanding the total cost of ownership (TCO) when engaging with HCM technology vendors can help leaders identify solutions that provide novel capabilities at no extra cost.
3. Invest in comprehensive offerings
The growing demand for comprehensive HCM systems encompasses a broad range of technological functionality, from people management and benefits administration to compliance monitoring and payroll and tax processing. Ultimately, adopting a holistic approach during the selection process can help leaders prepare their business to navigate a range of complexities — AI advancements, regulatory requirements, economic shifts and more.
By aligning resources and capabilities to create seamless, personalized experiences for current and prospective talent, leaders can position their organizations as attractive workplaces that prioritize employee satisfaction, operational efficiency and business success.
4. Evaluate client service and support
In the face of evolving demands, the quality of client service and support remains crucial for leaders seeking HCM solutions. Only vendors that actively seek client feedback and adapt their services accordingly will be able to meet the needs of a hyper-intelligent, modern HCM function. Ultimately, evaluating and incorporating customer experiences should be dynamic, reciprocal process for all stakeholders, allowing leaders to understand what works and what requires improvement.
Incorporating people analytics into existing HCM systems can also help leaders illuminate trends and highlight areas for development. By listening to their workforce and acting on data-driven insights, leaders can foster a culture of evidence-based responsiveness that benefits employees and facilitates better outcomes for customers seeking assistance.
Preparing for the future with next-generation HCM software
The shift toward innovative, AI-powered HCM software represents a fundamental change in how organizations approach people management. By embracing next-generation solutions, promoting transparency, investing in comprehensive offerings and securing advanced client service and support, leaders can position their workforce and broader business ecosystem for long-term financial success.
While preparing for these changes may require a re-evaluation of existing strategies, the payoff will be a more adaptive, engaged and future-ready organization. As we navigate this transformation, the potential for businesses to enhance their workforce strategies and overall performance remains.
Additional resources
- Learn more about the next-generation HCM software, ADP Workforce Now®, built for what your workforce needs now — and wants next.
- Learn why ADP was named a Leader in The Forrester Wave™: Human Capital Management Solutions, Q4 2025 evaluation.
- Learn why ADP was named a Leader in NelsonHall's HCM Technology & GenAI: The Workplace of the Future 2025 NEAT.
- Discover ADP's other awards and recognitions
Forrester does not endorse any company, product, brand, or service included in its research publications and does not advise any person to select the products or services of any company or brand based on the ratings included in such publications. Information is based on the best available resources. Opinions reflect judgment at the time and are subject to change. For more information, read about Forrester's objectivity here.
