There's a huge market for HR technology in Australia. Evolving workplace models, stricter regulatory requirements, and the intensifying war for talent are driving a terrific pace of adoption, and the HR function itself is part of the demand.

As in many other parts of the world, the role of HR professionals in Australia has undergone a fundamental shift. What was once primarily an administrative role has evolved into a strategic function. During the pandemic, HR leaders helped their organisations navigate continuous disruption, firmly establishing themselves at the decision-making table.

This transition is being driven by two transformative forces: automation and artificial intelligence (AI). Together, they are redefining how organisations attract, recruit, and retain talent, positioning HR as a key driver of business innovation.

A market in motion: The numbers behind the surge

Australia’s HR technology market was valued at US$720 million in 2024 and is set to almost double by 2033, reaching US$1.4 billion. According to the HR Tech Market Size & Trends 2024–2034 study, this growth reflects a compound annual growth rate (CAGR) of 7.6%.

Currently, Australia contributes 1.9% of global HR tech revenue. On a broader scale, the global HR technology market is forecast to hit US$84.7 billion by 2032—highlighting Australia’s increasing strategic importance in the global HR landscape.

Far from operating on the margins, Australian HR leaders are now central to shaping competitive advantage through the adoption of digital tools, cloud systems, and data-driven strategies.

Cloud and automation lead the way

Cloud-based HR systems have become foundational to modern people management. Australian organisations are increasingly adopting platforms that deliver scalability, flexibility, and cost-efficiency, especially as hybrid and remote work models become the norm.

According to IMARC, “the growing shift toward cloud-based solutions is a crucial factor influencing the growth of the HR technology market.” Unlike traditional on-premise systems, cloud-based tools offer real-time updates, seamless integrations, and anywhere-anytime access, aligning with the expectations of a mobile workforce.

Automation is also reshaping routine HR functions—ranging from onboarding, payroll processing, and performance reviews to the use of features like QR code-based job advertisements and automated document workflows. These capabilities allow HR teams to dramatically reduce manual administrative work while enhancing both the employee and candidate experience.

By automating time-consuming tasks, HR professionals are freeing up capacity to focus on strategic priorities such as capability building, culture development, and employee wellbeing.

AI in talent management: From concept to reality

In Australia, artificial intelligence is now a practical part of HR operations. It’s being applied to resume screening, candidate shortlisting, and performance evaluation, helping organisations make faster and more informed decisions.

A Google–IPSOS study found that 74% of Australians using AI have applied it to work-related tasks in the past year. The Responsible AI Index revealed that in 2024, 62% of Australian organisations used AI in recruitment either moderately or extensively.

From the job seeker’s perspective, the trend is equally pronounced. The Canva New Year, New Job Report (2025) reported that 65% of Australian job seekers used AI tools to create their résumés—with an impressive 96% of those individuals receiving interview callbacks. Employers are also capitalising on AI capabilities, with 92% of hiring managers using it for tasks like resume summarisation and job ad preparation.

Yet, adoption comes with caution. The Capterra Job Seeker AI Survey (2024) revealed that while 64% of candidates believe AI improves their chances of being hired, 44% would consider rejecting a job offer if the process relied too heavily on automation—indicating a strong preference for human-AI collaboration over full automation.

With machine learning continuing to evolve, AI is expected to play a growing role in workforce planning, skills development, and personalised employee engagement. Organisations are increasingly investing in platforms that support features like tailored communication, continuous feedback, and wellness tracking, pushing the shift toward more human-centric workplaces.

Analytics: A strategic game-changer

Data analytics has emerged as one of the most impactful elements of modern HR technology. Today’s platforms turn workforce data into actionable business intelligence, allowing organisations to predict turnover, monitor productivity trends, and support long-term workforce planning.

Australian HR professionals are leaning on platforms that integrate recruitment, onboarding, rostering, performance tracking, and payroll within a single system. Many solutions provide comprehensive dashboards and real-time reporting on employee demographics, attendance, and compliance, empowering HR leaders to transition from reactive to proactive decision-making.

Six catalysts driving HR tech acceleration

Several key drivers are propelling the growth of HR technology in Australia:

1. Cloud and automation – Supporting scalability, real-time access, and operational efficiency.
   

2. Productivity pressures – As noted by Subscribe-HR, “Operational efficiency remains the primary motivation for investing in HR technology.”
   

3. Talent competition – Employers are turning to digital tools to create more responsive, engaging, and attractive workplaces.
   

4. Remote work realities – Distributed teams need tools that foster collaboration, accountability, and cohesion.
   

5. Regulatory compliance – Government mandates, including digital reporting requirements, are pushing organisations to adopt modern platforms.
   

6. Rising hiring costs – With the average cost of hiring a new employee at $23,860, and 13% of new hires leaving during probation, HR tech is increasingly relied upon to reduce turnover and hiring errors.
   

Four obstacles on the transformation journey

Despite widespread adoption, challenges remain:

• Integration issues – Organisations often struggle to make new HR tech systems work smoothly with legacy infrastructure.
  

• Data privacy concerns – As more sensitive employee data moves to the cloud, security and compliance are top priorities.
  

• Change resistance – Without thoughtful change management, digital transformation efforts can face internal pushback.
  

• Skills gaps – According to The State of AI in Australian Human Resources, only 12% of HR professionals regularly use AI tools, and just 41% feel confident in managing digital transformation—highlighting an urgent need for upskilling and digital literacy.
  

So, where will the innovation and investment be found next? We can anticipate a few areas:

Automation and integration

AI-powered platforms are already automating low-value tasks while enabling predictive insights for workforce strategy, and this shift will continue as the cost of such platforms decreases while ease of use increases.

The functionality to support virtual training, performance monitoring, and digital collaboration will become a baseline. HR tools that do not have these functions will end up phased out of the market.

At the same time, the compatibility of platforms and tools will converge. Existing tech will become more integration friendly and new tech will move toward a 'plug and play' paradigm.

Specific niches

One area crying out for innovation is SME-friendly solutions. Smaller businesses seldom have the same ability to adopt technology as large corporations, and there is a high demand for scalable, cost-effective tools that can solve SME-specific challenges.

Wellbeing and engagement tools are also emerging as an evergreen market as employers seek to address burnout, mental health, and employee resilience through targeted technology.

And training and upskilling is a constant need in today's environment, where the half-life of skills continues to shrink. Whether in the form of tools to help people upskill, or simply to close the digital capability gap, there will be ongoing investment in tech here.