Trends that will shape the HCM technology market in 2025

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This year, rising customer expectations from both a product and service perspective will drive accelerated consolidation in the HCM technology market, with vendors piggybacking on each other’s strengths. Additionally, growing pressure to deliver incremental value to customers will force HCM providers to provide the support and educational resources needed to maximize ROI. This is especially prevalent as employers grapple with changes, from enacting return-to-office mandates to embracing skill-based hiring strategies. From a functionality perspective, Generative AI has already become a table-stakes aspect of any HCM tool. Vendors and customers alike are instead expected to brace themselves for the impact of AI Agents, many of which will become generally available over the course of 2025. With so much noise in the market, vendors that effectively partner with their customers to create trust and drive positive returns will see the most positive traction against competitors.

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