The State of AI Readiness in Talent Decisions

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Three things HR has figured out about AI

Two years into using AI in talent decisions, HR leaders know much more clearly what they want it to do, and the data shows it.

What HR has decided 'good AI' looks like

HR leaders have a clear sense of what good AI in talent decisions looks like. They want it bias tested before launch, explainable to managers and employees, and with humans involved at the points where decisions get made.

Why some HR teams are scaling AI faster

HR teams that planned governance from the start are 2.5 times more likely to be expanding their AI use into 2027 than teams without a governance framework in place.

Why some AI tools get used and others get dropped

AI career tools succeed when they show up inside Teams or Slack, when managers actually use them in 1:1s, and when the recommendations lead to real jobs and projects employees can pursue.

The five biggest funding areas for the next 12 months

HR teams are putting their AI budgets into five specific areas:

33.7% of HR teams are funding AI tools for internal mobility and talent marketplaces
32.9% are funding AI career coaching and development guidance
Manager support, governance, and skills profiling sit between 26% and 29% and form the next tier
31.4% of HR teams already use AI for manager guidance, so the funding is going where there is already demand

Where AI budgets in HR are going in 2026 and 2027

Most HR teams are leaning into AI

Half of HR leaders are either expanding their AI use right now or putting the foundations in place to do so soon.

21% of HR teams are actively expanding their AI use and investment in 2026 and 2027
29% are moving forward more carefully, putting governance and process in place first
Among HR teams without a governance framework, the share with no AI plans rises to 34%

Where HR sits with AI heading into 2027

Hands-on AI experience predicts what comes next

The HR teams already running AI in their talent processes are far more likely to be expanding it.

30% of HR teams with AI fully embedded are expanding further, double the rate among teams not using AI
81% of HR teams with AI fully embedded are more confident in AI than they were two years ago, against 18% of teams not using AI

HR teams already using AI are the ones scaling it further

Four numbers worth knowing

0 %

Of HR leaders are more confident about AI now than they were two years ago.

0 %

Require AI to be bias tested before they will deploy it in talent decisions.

0 %

Are putting next year's AI budget into internal mobility and talent marketplace tools.

0 x

Higher rate of AI expansion among HR teams with a governance framework already in place.

Get the full report

The State of AI Readiness in Talent Decisions has the complete data from our Q1 2026 research of 250+ senior HR leaders at companies with 1,000 or more employees in North America and Europe.

Inside, you will find the cuts by industry, by company size, and by HR role, plus the full data on what HR teams are investing in over the next 12 months, what they are willing to pay for in AI, and what would change their mind about expanding AI further in talent decisions.

Download the Report

The state of AI Readiness in Talent Decisions