Unlocking productivity with AI, overcoming change execution gaps, and HR imperatives: Strategies for HR success in 2025

As businesses navigate rapid change, improving workforce productivity has become a central focus for leaders striving to maintain growth and competitiveness. The recently launched SHRPA State of the HR Industry– Executive Summary for Southeast Asia, shows that for a staggering 90% of HR and business leaders in the region enhancing employee productivity is a critical challenge.

Other challenges like talent attraction and leadership development will be important to tackle in 2025. On the tech front, 83% of HR leaders in the region say identification of HR tech tools is a challenge. This number rises to 85% when it comes to implementing HR tech solutions and adopting newer technologies like AI.

To build strategies for HR success in 2025, we take a look at the current state of the HR industry and highlight the pitfalls and barriers that HR needs to overcome to create greater business impact.

HR’s Achilles’ heel: change execution

Analysing the different factors that are shaping the business outlook for 2025, the report notes that talent and labour market shifts is in the top three. Given the growing importance of talent, the role of HR as an accelerator of business success will become more critical in the coming year.

But is HR ready and executing for success?

The SHRPA report highlights a critical gap that HR leaders need to address heading into 2025. While HR leaders across Southeast Asia express high degree of satisfaction with their preparedness for change, many lack the ability to effectively execute business and talent critical initiatives.  The dissatisfaction among HR leaders across different change execution parameters— both people-centric and tech-led---remains a major barrier for HR to overcome.

The report goes on to note that low tech maturity impacts HR’s ability to execute for change. In Southeast Asia, a major portion of companies remain in what the report categorises as laggards— those with just a basic HR automation suite—at around 39%. This is followed by adopters who use data-driven tools at 25%. Finally, there are progressive companies (36%) that today have integrated HR systems with advanced AI and analytics capabilities.

Comparing these three categories, the SHRPA report notes that 6 in 10 companies, with low HR tech maturity, are falling behind the change execution journey. Areas like talent management and talent analytics emerge as key areas of concern, where impact of HR tech between laggards and progressive companies is the widest.

Tackling the challenge of workforce productivity

Today, workforce productivity is impacted by a range of factors such as experience, skillsets, employee engagement, and culture. The SHRPA report shows that talent development and skilling, building a high performance culture, and creating the right leaders are areas that will have the highest growth in investments in 2025. Looking at the tech landscape, HR tech and service companies show that their innovations and offerings are in line with these priorities.

AI, however, remains both a tool of great potential and one whose potential is difficult to harness. For 53% of HR leaders across Southeast Asia today, enhancing productivity through AI and analytics is difficult. So while AI's ability to analyse vast amounts of data, optimise workflows, and create personalised learning experiences is seen as a critical tool in improving productivity, creating the right implementation and integration strategies are important.

To look closely at how HR leaders can raise productivity, a SHRPA Talent Talk Webinar discussed strategies with talent leaders for Southeast Asia. Watch the conversation here.

HR tech and services: A mixed bag of benefits

An important part of the SHRPA State of the HR Industry– Executive Summary for Southeast Asia was to assess how aligned HR and the tech and services partners are in predicting and meeting each other's needs. While investment into HR tech remains positive and shows the close alignment between HR priorities and partner offerings, fault lines emerge when we look closer at the evaluation (identification) and implementation phase of HR tech.

When it comes to evaluating tech solutions, HR and their tech partners are aligned with 3 out of 5 must-have evaluation priorities. Priorities like data security, measuring business impact, and ease of use are on both their radars. But the two missing factors lead to challenges down the lane. Important HR leader priorities like cost optimization and mobile accessibility are missed by tech and services partners, while HR leaders themselves lack analytics and reporting as key concerns while evaluating solutions.

This misalignment extends to key areas even in the implementation stage. When analysing the difficulties HR leaders face in using technology compared to the perceptions of tech partners, two major gaps emerge: a lack of system compatibility and integration and a lack of configuration and compliance.

These persistent challenges are not just confined to Southeast Asia but are felt globally, yet tech partners often overlook or fail to address them. Both issues have serious business implications, impacting the scalability of tech platforms and raising concerns around accuracy and ethics, affecting the business impact of technology.

Emerging gaps and imperatives in 2025

Looking at these shifts in talent and tech landscape evolution story, the SHRPA report identified the following key gaps that emerge.

• Change management gap: gap in the change readiness and change execution.
• Acknowledgement gap: gap in realising that HR tech performance is directly correlated with HR’s effectiveness in leveraging it.
• Value realisation gap: gap in HR tech evaluation by HR leaders and what HR tech partners think HR leaders require.

From impacting agility and HR’s tech-enabled transformation at the right pace to how the HR team’s development of the right skills, knowledge, and behaviour will not keep up with business demands, these gaps will be crucial to bridge in 2025.

These three gaps lead to three major imperatives for HR across Southeast Asia to address in 2025. They are:

• Enhance change execution speed
• Develop HR function’s resilience
• Build sustainable technology infrastructure

Unlock how HR leaders and CXOs are planning to overcome these gaps and meet the three imperatives by downloading the SHRPA Executive Summary- Southeast Asia Insights by downloading your copy here.