What if AI could finally solve HR’s biggest challenge: keeping employees engaged and loyal?
In our report, The State of the HR Landscape in 2025, we explored how AI and machine learning are reshaping HR strategies, with our survey revealing that a staggering 95 percent of respondents anticipated increased adoption of these technologies in the months to come.
AI is transforming how HR tackles one of its most persistent challenges: aligning workforce skills with evolving business needs. Our study revealed a growing shift toward skills-based approaches, with organizations using AI to map employee capabilities to emerging roles.
In fact, 46 percent of companies already applying skills-first strategies are using them to support internal mobility, helping employees transition into new positions and advance their careers. This is leading to more agile workforces, increased engagement and, ultimately, retention.
In this article, we’ll explore how integrating AI into employee engagement and talent management strategies can foster a workplace culture in which people thrive – and stay.
AI in Employee Engagement: A New Chapter in Understanding and Retaining Talent
Artificial intelligence’s ability to conduct deep contextual analysis enables the application of pattern recognition and behavioral understanding at a scale far beyond human capacity.
This could have a transformative impact on talent management strategies, particularly when considering the limitations of traditional methods used to measure subjective factors like employee engagement and sentiment.
Take employee surveys, for example: rating feelings on a numerical scale often falls short when it comes to capturing the nuances of human emotions, thoughts and experiences.
Now, AI could take measuring engagement from an intuition-based approach to one grounded in real, reliable data. Instead of asking employees to express how they feel in terms of predefined, rigid categories, imagine allowing them to express themselves in their own words and then use natural language processing (NLP) to analyze their responses and uncover insights.
By gaining access to this information, HR teams could get a deeper understanding of how employees really feel. More importantly, they would be able to detect attrition risk and take proactive measures to strengthen morale, in doing so helping to retain key talent and lessening the impact of high employee turnover on business performance.
This same pattern recognition at scale could also improve internal mobility processes. Beyond identifying and inferring a person’s specific skills, AI can also suggest positions or projects that better align with their profile and competencies.
Interestingly, in contrast to common perception, the adoption of AI can support tasks that require more human involvement.
According to our report, 42 percent of HR professionals already working with AI and automation technologies have seen increased productivity and a reduction in repetitive administrative tasks. The most powerful consequence of this is that it allows professionals to shift their attention to the more strategic aspects of their work, those in which human insight and perspective are irreplaceable.
As a result, AI is helping shape workplaces where employees find greater meaning in their contributions, feel more satisfied with their work, and, in turn, become more loyal and committed to their organizations.
How Can You Start Taking Advantage of AI in HR?
With so many potential use cases for AI, from recruiting to employee engagement and retention, knowing where to start can be daunting. This was a topic during a recent panel we hosted with leaders from DHL, Bain and Unifi.
Their advice? Begin with solutions that deliver high impact without requiring large upfront investments. Additionally, launching pilot projects before scaling them across the organization can minimize risk, streamline implementation and ensure real value.
To drive the success of these initiatives, promoting AI literacy and strengthening confidence in its use among employees will make a huge difference. Educating workers about the limitations of the technology and reminding them that it isn’t always truthful can also help by mitigating the risk of costly errors.
However, the success of AI in employee engagement, retention and any other HR application will ultimately depend on a well-defined strategy that considers the particularities of each organization: its culture, its values, its objectives and the specific challenges it faces.
Artificial intelligence represents the greatest technological leap we have ever experienced, and we are still discovering how to maximize it. Adopting AI effectively requires not only an investment in technology but also a change of mindset within organizations.
To achieve this, HR departments and business leaders would be wise to foster a culture of learning and help demystify AI among employees. This will empower them to leverage AI’s full potential to build more efficient, engaging and personalized work environments.
AI is already showing how it can transform employee engagement, retention and skills development, but turning this potential into measurable outcomes requires the right approach. At Avature, we help organizations start with practical, high-impact use cases, pilot them safely, and scale them to deliver lasting value. If you’re ready to explore how AI can strengthen engagement and loyalty in your workforce, get in touch with us today.