HR Software: From 2025 Predictions to 2026 Realities

As we cross the threshold into 2026, the People & Culture (P&C) landscape has decisively shifted. The trends we predicted for 2025—like the rise of AI and a focus on Employee Experience—are no longer predictions; they are minimum requirements for any growing Australian organisation.

Technology continues to drive this transformation, with Human Resource Information Systems (HRIS) moving from being tools of administration to being strategic engines for talent growth and compliance.

A Quick Review: Were the 2025 Predictions Accurate?

Looking back at the trends predicted for 2025, the overarching movement was correct: HR software has become non-negotiable for modern P&C departments.

  • Employee Experience & DEI: Both became core, integrated features of successful HRIS platforms, with modern software providing mobile self-service and data capture for inclusion initiatives.
  • Data-Driven HR & AI: Predictive analytics and AI-powered automation began eliminating ‘checkbox tasks’ as expected, freeing up P&C teams for strategic work.
  • Remote/Hybrid Work: HRIS platforms successfully integrated communication and time-tracking tools to manage distributed workforces, making hybrid models routine.
  • L&D: Personalised learning paths became the norm, directly linking skill development to performance management dashboards.

The challenge for 2026 is no longer implementing these technologies, but optimising them to drive measurable business impact.

The Defining P&C Software Realities for 2026

The focus now shifts from adopting new tech to achieving true efficiency, compliance certainty, and strategic alignment across the entire employee lifecycle.

1. Compliance Certainty and the Payroll-HR Unification

In Australia, the high cost and risk of payroll non-compliance reached a tipping point in 2025. For 2026, fragmented systems—where time, attendance, HR data, and payroll calculations are separate—are now seen as a catastrophic operational liability.

The new reality is the mandate for a unified HR and Payroll system. P&C leaders require an integrated HRIS that eliminates manual data transfer and guarantees automated Award Interpretation and seamless Single Touch Payroll (STP). This unification turns compliance from a risk centre into a confident, automated routine. Reports indicate that wage underpayments and compliance breaches in Australia have resulted in multi-million dollar penalties, highlighting the financial necessity of airtight, integrated systems (Fair Work Ombudsman 2024).

The focus shifts to compliance certainty: a defensible, auditable trail that demonstrates correct payment practices every time, allowing P&C to scale without fear of FWO intervention.

2. Hyper-Personalisation Driven by AI & Data Depth

While AI-powered screening was a trend for 2025, 2026 sees AI moving deeper into the employee journey. The goal is hyper-personalisation at scale. HR software must now leverage integrated data (performance, engagement, L&D completion) to drive predictive, tailored action.

  • Predictive Retention: AI models use real-time sentiment and performance data to proactively flag employees at risk of leaving before they speak to their manager.
  • Personalised Skill-Gap Filling: The system automatically suggests the next course or mentor based on the individual’s role, performance review gaps, and career ambition.
  • Manager Enablement: AI provides specific coaching prompts to managers based on team performance or engagement scores, empowering line leaders to manage P&C issues effectively.

By 2026, over 40% of large enterprises will use AI-driven tools to automate or augment tasks previously performed by HR specialists, demonstrating the technology’s move from novelty to necessity (Gartner 2024).

3. The P&C Team as a Strategic Force Multiplier

HR software is now expected to remove the low-value administrative friction (the ‘checkbox tasks’) entirely. This transition is not about saving HR staff time; it’s about unlocking the P&C team to act as a strategic business unit.

In 2026, the value of the HRIS is measured by how much time the P&C team spends on:

  1. Strategic Workforce Planning: Using analytics to model future hiring needs, skills gaps, and budget forecasting.
  2. Talent Mobility: Designing career frameworks and internal movement that boosts engagement and reduces reliance on external recruitment.
  3. Culture and Engagement: Leading initiatives rather than fielding administrative queries.

Companies with “best-in-class” talent management programmes are approximately 26% more likely to be using software to track HR performance across multiple benchmarks, directly correlating modern HRIS usage with superior outcomes (Internal Report 2025). The HRIS is the engine that facilitates this move from transactional HR to strategic People & Culture.

4. Experience-First Design & Manager Empowerment

The 2025 focus on Employee Experience evolves into a mandate for Manager Empowerment. Since managers own up to 70% of the employee experience, the HRIS must be designed to be intuitive for them, not just for P&C administrators (Gallup 2023).

In 2026, P&C software must deliver:

  • Manager Self-Service: Complete visibility and control over team performance, time-off approvals, and budget—all via an intuitive, mobile-first interface.
  • Unified Dashboards: Managers should see time, performance, and development data for their team in one place, eliminating the need to navigate multiple tabs or systems.
  • Mobile Functionality: The ability to provide real-time feedback, approve expenses, and check leave balances from any device is no longer optional.

5. ESG Reporting & Social Impact

Beyond the previously predicted focus on DEI, 2026 sees the HRIS playing a key role in supporting the organisation’s broader Environmental, Social, and Governance (ESG) mandates. The Social (S) pillar of ESG is heavily reliant on P&C data. Companies with above-average diversity scores, a key output of HR data tracking, report up to 19% higher revenue from innovation (McKinsey 2020).

HR software is now being used to track and report on:

  • Diversity and Pay Equity Gaps: Providing mandated public reporting metrics.
  • Training Compliance: Tracking completion rates for ethics, safety, and modern slavery training.
  • Workforce Health and Safety: Digitising and reporting on safety incidents and risk identification.

The HRIS must provide real-time, audit-ready data for these critical social impact metrics, turning employee data into a tangible measure of corporate responsibility.

Conclusion: Future-Proofing for 2026

The shift from 2025 predictions to 2026 realities confirms one thing: the right HRIS is a non-negotiable investment in your organisation’s future. The market no longer accepts fragmented, complex systems that drive administrative waste.

Success in 2026 means having a unified platform that:

  • Guarantees compliance (especially the complex Australian payroll rules).
  • Enables your P&C team to focus on retention and talent strategy.
  • Scales effortlessly with your growth.

By embracing the strategic reality of modern P&C software, organisations can confidently navigate the complexities of managing a modern workforce and ensure they are built for where they are going, not where they have been. 

Wherever your business is at, EmployeeConnect stands ready to help you unlock the best from your People & Culture teams. Book a free demonstration today with a local HRIS expert.

Works Cited

Fair Work Ombudsman. Annual Report 2023–24. Australian Government, 2024.

Gallup. State of the Global Workplace: 2023 Report. 2023.

Gartner. Top Strategic Technology Trends for 2024: AI and Continuous Adaptive Security. 2024.

Internal Report. The Roadmap to HRIS Implementation. 2025.

McKinsey & Company. Diversity Wins: How Inclusion Matters. 2020.