Reinventing HR for the AI Era: how to lead with people and technology, together

AI won’t replace HR, but HR that doesn’t evolve is quietly slipping out of relevance. It’s a reality many leaders are slowly waking up to. We’re entering a new chapter in how people and performance intersect, shaped by intelligent systems, changing expectations and more fluid ways of working.  

Of course digital transformation isn’t new, but it’s clear that something has shifted on a more fundamental level. We’re not just updating systems anymore. By now, we’re rethinking how HR delivers value. And at the heart of that shift is a simple question: what do people actually need from HR, and how can we meet those needs better than before? 

The traditional HR operating model was built for stability and scale. It offered structure, predictability and compliance. But today’s challenges are more dynamic, so it’s no surprise that employees are increasingly asking for more.  

They want more experiences that feel relevant, timely and personal. They want more clarity about growth, purpose and performance. And they want to work with organisations that feel as responsive as the rest of their lives. 

In our 2025 HR & Payroll Pulse report, SD Worx experts note clear signs that HR’s centre of gravity is shifting. AI is a part of that change, but so are evolving ideas about fairness, autonomy and how work fits into life. Technology can help accelerate the transformation, but it doesn’t set the direction. That’s up to us. 

The HR teams making the biggest strides aren’t following a trend. They’re responding to what both employees and organisations actually need. Across industries, six key shifts are becoming more visible: 

1. From standardised to personalised 
   It’s no longer enough to offer the same development paths or rewards to everyone. Employees expect experiences that reflect their goals, strengths and pace. HR teams are starting to use AI tools to recommend learning playlists, trigger career check-ins based on tenure or behaviour, and create feedback loops that adapt as people grow.
2. From fixed roles to fluid talent 
   Job descriptions are becoming less central. Instead, organisations are matching people to projects, not just positions, based on skill data and availability. Some are building internal talent marketplaces to make that easier — surfacing short-term stretch assignments, mentoring opportunities or cross-functional projects to the right people at the right time.
3. From process-focused to outcome-led 
   Most employees (read: people) think not in rigid workflows, but in dynamic moments — joining, progressing, changing direction, going through personal transitions. In response, some HR teams are running design workshops to map these moments, then reworking content, touchpoints and responsibilities to ensure that workflows are simpler, more supportive, and more responsive.
4. From transactional to transformational 
   Admin still matters, but it no longer defines the role. Where automation has been embraced, we’re seeing HRBPs shift their focus to coaching, performance design and cultural stewardship. Some are holding monthly manager drop-ins or facilitating “career clarity” sessions to help teams navigate development more confidently.
5. From fragmented tools to integrated intelligence 
   Data can’t support decision-making if it’s stuck in separate systems. Increasingly, HR leaders are working toward unified platforms that integrate everything from engagement data and performance metrics to workforce planning signals in one view, so it’s easier to have strategic conversations in real time, driven by up-to-date context.
6. From generalist to specialist 
   As the work of HR becomes more diverse, so do the skills required. We’re seeing teams bring in new roles: behavioural scientists to design interventions, technologists to manage infrastructure, and workforce planners to align strategy and skills, not to mention the growth in roles centred on trust-building or creative direction. It’s all about building the right expertise for what comes next. 

You don’t need to wait for a reorg or a system overhaul to start making progress. Here’s how many HR teams are taking practical next steps: 

• Set a people strategy that can flex 
  Move away from rigid 3- to 5-year HR plans and instead establish living strategies that evolve with the business. This could mean reviewing your roadmap quarterly, or embedding "design principles" that guide decision-making even as priorities shift.
• Build cross-functional design partnerships 
  HR alone can’t reshape how people experience work. Involve IT, legal, operations and employee representatives in the design process. Start with a single experience, like onboarding, and bring different lenses to the table.
• Use tech to make better decisions, not just faster ones 
  Don’t stop at automation. Look for tools that help you identify bottlenecks, reveal hidden trends or trigger timely nudges. For example, we’re seeing employers rework their feedback cycle using AI to surface recurring themes, then training managers on how to respond with clarity and empathy.
• Invest in capabilities beyond competence 
  Upskill your managers in areas that go beyond policy or KPIs, including modernised soft skills like trust-building in hybrid teams, developing a coaching mindset and giving feedback that sticks. Encourage HR professionals to develop fluency in data, systems thinking and change leadership.
• Support change like it’s part of the job — because it is 
  New tools and structures only work if people feel equipped and confident to use them. Create spaces for questions. Share what’s still uncertain. And give people time to adapt before expecting immediate results. As SD Worx’s Senior HR Researcher Jan Laurijssen puts it, “It’s not about making HR digital. It’s about making HR matter in a digital world.” 

These shifts may feel subtle now, but we’re seeing them take hold. Forward-thinking employers are already reflecting a shift in mindset, from maintaining the system to actively reshaping it:  

• Building talent intelligence platforms to offer employees personalised recommendations for their next internal move, with coaching built-in via personalised AI assistants.
• Redesigning the leave process with employee input, simplifying approvals and improving trust, while reducing calls to the HR team.
• Positioning HRBP roles to have a greater focus on data fluency and strategic advising, supported by growing reliance on automation for admin.
• Rethinking silos on a macro level. Take the global biotech company that recently combined IT and HR into one department of People and Digital Technology. 

The future of work won’t be defined by tools or templates. It will be shaped by the leaders who ask better questions, design more thoughtful systems, and stay grounded in what people actually need from work. 

It’s clear from the results of the HR & Payroll Pulse Europe that AI empowers HR leaders with more reach. But it also raises the bar for relevance. As expectations change, so must the ways we listen, respond and lead. According to Jan, “This is the time to get proactive. To architect a version of HR that’s not just more efficient, but more meaningful.”