Core Insights - Enterprises are increasingly adopting AI and SaaS solutions for HR, with AI budgets for HR projected to average $1.6 million in 2026, a tenfold increase since 2023 [2][4] - By the end of 2027, 83 percent of companies plan to adopt HR SaaS or hybrid cloud solutions, with 50 percent using SaaS exclusively [2][4] - More than two-thirds of enterprises rank AI adoption among their top three HR priorities, indicating a significant shift towards technology-driven HR operations [2][4] AI and SaaS Adoption - The 2025 ISG report indicates that 69 percent of organizations globally have adopted SaaS or hybrid cloud models for HR technology, marking a critical transition to cloud-based HR operations [2][4] - AI is already delivering productivity gains of 10 to 15 percent in specific HR processes, with early applications including AI-assisted job postings and onboarding automation [4][5] HR Transformation and Value Realization - Over half of enterprises are undergoing HR transformation, yet only 52 percent report seeing quantifiable value from their HR technology investments [3][4] - Organizations utilizing integrated HR, finance, and workforce planning platforms achieve approximately double the return on investment compared to those with siloed systems [3] Changes in HR Service Delivery - A majority of organizations are modifying their HR service delivery models, with 84 percent planning sourcing changes within the next two years as part of HR optimization efforts [6][7] - Data security and privacy remain the top priorities for companies evaluating new HR technology solutions, followed by integration capabilities and cost of ownership [7] Survey and Methodology - The ISG report is based on a survey of over 200 executives responsible for HR programs and technology, representing a diverse range of industries and company sizes [8]