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HR transformation for the AI era

AI is reshaping work faster than many HR operating models can adapt. Mercer helps CHROs and HR leaders in Asia redefine HR’s role, from a support function to a driver of business strategy, workforce decisions, and growth.
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HR leaders need to transition from “managing employment” to being “architects of work” 

 In Asia, 65% of HR leaders worry about HR’s role in the workplace as digital transformation and AI agents accelerate, according to Mercer’s Global Talent Trends 2026. The choice is clear: HR can either remain an administrative function that has to justify its existence in the age of AI or step up as the strategic force shaping how work and the workforce are transformed. 

That shift is already underway as 84% of HR leaders say their role is evolving from “stewards of employment” to “stewards of work” and 81% of investors saying embedding HR in strategic decision-making is essential for future growth. 

To stay relevant, HR must orchestrate how work, skills, technology, and talent come together to create business value. Yet outdated operating models, legacy processes, limited decision rights, and the lack of the right digital tools and systems, can leave HR without the data or influence needed to connect people strategy to business outcomes.  

"HR must evolve from a centralized, process-driven function into a fluid, outcomes-focused capability — one that helps shape work, intelligence, and decision-making." 
Lewis Garrad, Asia Workforce and Rewards Practice Leader 

From transactional HR to transformational HR: Mercer's approach to HR transformation in the age of AI 

Mercer helps organisations transform HR from process-led administration to an agile, AI-enabled function focused on outcomes — across four strategic priorities: 
  • Run and betterment  
    Optimize and outsource business support functions, stabilize the HR technology ecosystem, and create operational efficiency at scale. 
  • New operating system
    Redesign work, reimagine HR’s role, build human-machine teaming models, and create the digital fabric needed to help organizations operate faster and more adaptively. 
  • Change muscle 
    Build organizational readiness, strengthen change leadership, and equip the workforce with the skills needed to adopt AI and embed new ways of working. 
  • Readiness and risk assurance  
    Strengthen data integrity, governance, and vendor ecosystem management so organizations can adopt AI and digital tools with greater confidence. 

Three ways Mercer can help with HR transformation  

The challenge: 

  • The business is planning for generative AI automation, but HR teams may not know where to begin. 
  • HR is too buried in transactional work to focus on the areas that will drive the most impact. 

How Mercer helps: 

We help HR move from uncertainty to action — setting a clear AI strategy, activating the right use cases, and building the capability to deploy and evolve AI in ways that deliver real business outcomes. 

The challenge: 

  • HR processes are manual, inconsistent, and disconnected from the employee experience. 
  • Lack of digitalization and standardization is creating friction for HR teams and employees alike. 

How Mercer helps: 

We design HR from the employee perspective which includes mapping journeys, streamlining processes, and enabling technology that creates a seamless, modern experience across the hire-to-retire experience. 

The challenge: 

  • The HR and HR technology landscape is evolving faster than most teams can track. 
  • Without the right guidance, organizations risk falling behind or investing in the wrong priorities. 

How Mercer helps: 

We provide flexible, on-demand coaching and advisory — pairing your team with experienced advisors who know your organization, help you cut through the noise, and keep your transformation on track.

How Mercer helped a Japanese bank improve skills visibility and strengthen workforce planning 

A Japanese bank faced labor shortages across several departments, making it harder to maintain specialist capabilities needed for future growth. HR lacked a consolidated view of employee skills and competencies, which limited its ability to identify capability gaps, align talent plans with business strategy, and support succession planning. Employees also had insufficient information to assess their expertise and consider future career paths. 

At the same time, the bank’s company-wide digital transformation highlighted inefficiencies in HR operations and the need for stronger digital capabilities across the function. 

Mercer worked with the bank to assess its HR processes, workforce needs, and digital readiness. Through business analysis and interviews with employees inside and outside HR, Mercer helped the bank shape a digital HR roadmap focused on skills visibility, process improvement, and employee experience. 

The solution included establishing a digital promotion team within HR and introducing a talent management platform, chatbots, and inquiry and application management tools. The talent platform captures data on general, management and specialist skills, as well as employee competencies and workforce conditions, giving HR a more complete view of the capabilities available across the organization. 

With Mercer’s advisory and solutions, the bank managed to: 

  • Improve visibility into workforce skills and gaps. 
  • Strengthen talent, succession, and mobility planning. 
  • Help employees make more informed career decisions. 
  • Reduce friction in HR processes through digital tools.

Mercer’s end-to-end HR transformation solutions tailored to your organization 

Mercer’s HR transformation solutions

  • HR vision and strategy roadmap (HR Accelerator)

    Create a map for your future HR vision and strategy that can transform your HR content, processes, organization and technology.

  • HR target interaction model and HR operating model

    Create an HR target interaction model (TIM) to meet the strategic objectives of the organization and unlock the employee experience.

  • HR process design, automation and radical simplification

    Creating exceptional moments that matter for all employees requires a careful look at employee programs and processes, most of which were designed with in-person interactions in mind. 

  • HR technology strategy and advisory

    We can implement a variety of solutions with in-house resources from our Digital Teams. We partner with an array of providers to select the best solutions for our clients’ individual needs. Our recommendations are impartial and not biased toward any specific vendors.

  • Talent acquisition

    Mercer’s talent acquisition solutions help clients set up their employee value propositions, recruiting processes, organization and technology to attract and retain employees who are critical to their future success.

  • Future HR skills

    Mercer Learning collaborates with leading content providers, offering the best scalable (digital) learning solutions customized to your HR upskilling requirements.

Why Mercer

Mercer brings together HR strategy, operating model design, workforce data, rewards, skills, employee experience, and HR technology advisory. This helps HR leaders redesign HR around business value.  

With HR expertise across more than 130 markets and more than 1,500 transformation consultants globally, Mercer combines scale with practical workforce insight. Our capabilities across health and benefits, investments and retirement, workforce and careers, mergers and acquisitions, salary benchmarking, and people analytics help organizations build HR functions that are ready for the future of work. 

Transform HR for the future of work 

HR has an opportunity to shape how work, people, skills, and technology come together to support business growth. Mercer can help you build an HR function that is more strategic, agile, and better prepared for an AI-enabled future. 
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FAQs

HR transformation is essential as AI, digital transformation, and changing workforce expectations reshape how work gets done. Organizations need HR models that can support faster decisions, better employee experiences and stronger alignment between people strategy and business strategy. 

An HR operating model defines how the HR function is structured, how work is delivered, how decisions are made and how HR interacts with the business. A strong HR operating model helps HR deliver consistent services while supporting strategic workforce and business priorities. 

An organization should review its HR operating model when HR processes feel fragmented, technology is not delivering expected value, business leaders need better people insights, employee experience is inconsistent, or the organization is preparing for major workforce, digital or AI-enabled change. 

AI can support HR transformation by automating repetitive tasks, improving workforce insights, personalizing employee experiences and helping leaders make faster people decisions. To create value, AI needs to be connected to clear governance, redesigned processes, and the right HR skills. 

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