The digital divide is growing
Despite the tools available, nearly half of organisations (49%) are still managing HR through spreadsheets, while 46% say it takes hours just to pull basic reports. A smaller group of digital leaders have moved on to predictive analytics and proactive workforce planning, and the gap between the two groups is growing rather than narrowing.
The human cost is visible throughout the data. When 68% of skills gaps are identified informally by line managers rather than through structured data, career progression becomes dependent on managerial quality rather than objective performance. And when 78% of firms only notice a retention problem after a resignation has already been handed in, there is little opportunity to act.
"When 78% of firms only notice a retention problem after a resignation is handed in, it's already too late," says Matthew Crook, Access People SMB General Manager. "With unemployment forecast to rise to 5.3% in 2026, staying ahead of turnover is critical for survival."
The AI readiness gap
The research also identifies a meaningful disconnect around AI adoption. A third of organisations (34%) are training their teams on AI tools, but only 23% have allocated a dedicated budget to implement them. Without resourcing to back up training, adoption stalls. This matters because AI is projected to save HR teams up to 10 hours of admin per week, representing a significant efficiency gain for teams that commit to it.
On average, organisations take 24 to 30 months to move from initial digital adoption to full HR technology maturity. For those yet to start, that timeline makes the case for acting sooner rather than later.
SMBs face a steeper challenge
The productivity gap is not felt equally. SMBs are 138% less likely than larger enterprises to have strong people analytics in place, putting them at a real disadvantage in the competition for talent. As HMRC moves toward a digital-first roadmap and the pressure to reduce administrative burden grows, the case for investing in HR technology has never been more straightforward for smaller organisations.
"Our data shows that SMBs are significantly less likely to have strong analytics in place," adds Crook. "This leaves them at a real disadvantage in the race for talent, at exactly the moment when getting people decisions right matters most."
Find out where your organisation stands
Future-Ready HR in 2026: The Path to Strategic Impact covers the financial impact of manual HR processes, the business case for predictive analytics, and a practical roadmap for HR transformation. Alongside the report, we have also built a free HR Digital Maturity Assessment to help you understand where your organisation stands and what to prioritise next.
Methodology
Based on exclusive YouGov research commissioned by PeopleHR. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 171 HR professionals across nine industries. Fieldwork was undertaken between 31 December 2025 and 19 January 2026. The survey was carried out online.