Most companies not using AI strategically, analysis suggests

Only five per cent of companies reported using AI for strategic advantage, with the technology’s impact on entry-level hiring remaining a popular concern, according to new research.

With responses collected from 180 HR, talent acquisition and talent technology professionals across diverse global industries between September and November 2025 in its AI Impact Report 2026, AI tech company Avature explored the confidence that companies had in their AI-transformation over the next few years.

Data from the report revealed that only five per cent of companies used AI for strategic advantage, despite 88 per cent of respondents expecting to increase investment in AI over the next 12 months, with 51 per cent of respondents reporting being stuck in the piloting or exploratory phase.

The research also revealed that 28 per cent of respondents identified legacy software limitations as one of HR’s top challenges.

Avature chief executive and founder Dimitri Boylan told HR Leader that although the report revealed that many companies' AI policies were still in development, the respondents were largely concerned about the impact of AI on hiring junior professionals.

According to the data, 76 per cent of respondents concerned about AI’s impact on early-career positions believe it will significantly reduce hiring.

“The CFO is looking at the cost of entry-level and graduate level employees and the numbers that they hire and says, ‘we'll hire fewer people’…HR's challenge is to make sure that they have the right people at each level of the organisation, you know, throughout the life cycle of the company.”

In light of this, 48 per cent of respondents reported the skills shortage as their top HR challenge, with only 11 per cent of respondents feeling very confident predicting future skills needs 12 months in advance.

Forging a strategic impact

Boylan stressed that companies must focus on experimentation to forge a strategic impact, while staying agile amid changes.

“If all you get from AI is that individual users become more efficient, as a business, you probably don’t end up on the right side of disruption — in the winner’s circle,” Boylan said.

The report found that AI’s most substantial returns for respondents revolved around day-to-day tasks: increasing productivity (67 per cent), improving user experience (40 per cent), and facilitating better decision-making (36 per cent), as opposed to driving fundamental change.

The report found that only five per cent of companies use AI for strategic advantage, a gap reflected in its limited business impact. Just 27 per cent of respondents said AI drives innovation at their companies, while only seven per cent linked it to the creation of new business models. Boylan added that the prevalence of shadow AI further fragments adoption, limiting its ability to scale and translate into broader innovation.

“The competitive advantage to get out of AI is to focus on efficiency and low-risk, high-impact AI inside the enterprise that gives you a competitive advantage. We've seen a few companies go with high risk, high reward, and it did not work out well,” Boylan stressed.

“HR is under extra scrutiny because people are concerned with what AI does with relation to human [jobs]...So HR has to have a very good understanding of what they are doing with AI and be very clear about [their] plans,” Boylan said.

“It’s really difficult to imagine the workforce of 2028. It’s going to require a skillset that’s not really defined yet. This is the execution gap HR must close,” he concluded.