Navigating the Next Wave of HCM Growth: Cloud Migration, AI, and the Future of Employee Experiences

According to Gartner’s Market Share Analysis: Human Capital Management Software, Worldwide, 2024 report, the global HCM software market grew to $36.3 billion in 2024, surpassing ERP sector growth with a 13% increase. Cloud migration remains the primary driver, accounting for 76% of total HCM revenue.  

But the real inflection point is ahead: AI, especially generative and agentic capabilities, is going to change how organizations engage and empower their people. While adoption is still maturing, the trend is clear: HCM is no longer just about managing employees, it’s about architecting the future of work. For HR leaders this means HCM is top of the list for shaping tomorrow’s employee experiences.

With events like HR Tech 2025 taking place this week, it's an ideal time to reflect on the opportunities and challenges defining this critical evolution in enterprise level HCM solutions.

Drivers and Barriers in HCM Cloud Migration

Major adoption drivers are the shift from legacy on-premises to modern cloud solutions and a strategic push towards investment in upskilling, retention and employee experience. HCM buying decisions are now about outcomes: employee growth, talent agility, skills management and worker experience.

But agentic and generative AI integration poses pricing and packaging complexities. Enterprises are struggling to leverage AI capabilities included in their existing subscriptions, this is a clear opportunity for platforms that simplify adoption and show rapid ROI. Common challenges during HCM cloud implementations are data migration complexities, integration difficulties and most critically user adoption and training.

The Implementation Reality

HCM cloud implementations require addressing both technical and user centric challenges. Organizations underestimate the complexity of data migration, configuration management and the critical importance of comprehensive user training and change management. Research shows that training programs and user adoption strategies are the most significant factors in implementation success.

Emerging Solutions for Complex Challenges

The move to agentic AI in enterprise applications is a fundamental shift from reactive to proactive system management. Instead of automating existing processes these intelligent systems can understand business objectives, make decisions and adapt to changing requirements. Gartner predicts by 2028 33% of enterprise software applications will have agentic AI, AI agents will handle 20% of digital interactions and make 15% of daily work decisions autonomously.

A Different Approach to HCM Implementation

Modern implementation challenges require solutions that address the full spectrum of enterprise needs- from initial configuration to ongoing optimization. Effective platforms in this space typically offer:

• Configuration Intelligence: Advanced systems that can identify, map and manage configuration changes across complex enterprise environments, reducing manual oversight and potential errors.

• Intelligent Testing and Validation: Automated testing frameworks with pre-built accelerators to help organizations validate changes quickly and comprehensively, reducing implementation time and improving quality.

• Integrated Change Management: Instead of treating user adoption as an afterthought, advanced platforms include training automation, contextual guidance and personalized learning experiences into the implementation process.

• Proactive Monitoring and Optimization: Advanced analytics and observability capabilities help organizations identify potential issues before they impact operations, from reactive problem solving to predictive management.

The best solutions in this space use agentic AI not as a marketing buzzword but as a way to reduce complexity, accelerate adoption and get sustained value from cloud HCM investments.

The Opkey Perspective

Moving from legacy HCM to modern cloud suites is an urgent and complex challenge for global enterprises. Opkey is the industry’s first agentic AI-native platform that helps IT and business leaders not only lower cost and risk during migration but also future-proof their enterprise app ecosystem to absorb emerging AI technologies – with zero disruption.

The buy-in for major HCM investments is now based on clear, tangible proof of impact: growth, agility, upskilled talent and positive employee experience. Opkey’s agentic AI-native enterprise app lifecycle optimization platform delivers that confidence to transform HCM implementations to deliver on time, on budget and on adoption.