Workday, SAP turn HCM into AI platforms — and the market is 'hot' again

IT spending will rise 15% this year, according to Gartner, and the HCM segment may grow at twice that rate — a reversal after four years in which core HR platform vendors took steady criticism from Wall Street. After a month of meetings with Workday, SAP and dozens of vendors at the Unleash conference, industry analyst Josh Bersin's assessment is blunt: HCM core vendors are in the strongest position he has seen in years, because the platforms are becoming the foundational layer for enterprise AI.

For HR and people-operations leaders, the shift touches procurement, workforce planning and system strategy. Gartner also projects the AI token market will reach $1.37 trillion next year, and HCM vendors expect a substantial share of it.

Why is HCM strategic again?

Bersin identifies several structural changes. Companies are restructuring in a growing economy and need these platforms more than ever. More significantly, HCM systems are no longer just HR systems of record — they now hold the data needed for M&A decisions, restructuring and productivity analysis, and they are becoming the management layer for hybrid workforces of people and AI agents. Bersin's projection: by 2030, companies will have as many agents as people.

The standalone agent market, by contrast, is what Bersin calls dysfunctional. He counted more than 40 vendors at Unleash selling "recruiting agents" or "coaching agents" with little differentiation. Employers buying standalone sub-agents are acquiring application fragments from different vendors, he argues, when what they need is an architected "system of agents" — something HCM platforms can deliver through now-open APIs and data clouds.

What did Workday announce?

Workday co-founder Aneel Bhusri calls this the company's "fourth act." Through the acquisitions of Paradox and Sana, Workday is now shipping seventeen "Superagents," each containing sub-agents, covering talent acquisition, payroll, coaching, org design, financial audit and more. Notable examples:

• Deployment Agent: configures and deploys an entire Workday system in one sitting.
• Decision Intelligence Agent: combines workforce, hiring and financial analysis, and plans hybrid human-agent capacity.
• Payroll Agent: finds anomalies that take hours or days to uncover manually.

Workday also launched the Workday Data Cloud (API and SQL access to all Workday data) and a "Candidate Profile" that lets job seekers apply once to any Workday employer without filling out another profile — a change greeted with applause at the event.

On governance, Workday introduced an Agent System of Record, an Agent Gateway for third-party agents, and Agent Identity technology acquired from c1.ai. The security model distinguishes ambient mode, where an agent uses its own permissions, from delegate mode, where it operates within an employee's access rights.

How does SAP's approach differ?

SAP's "Autonomous Enterprise" strategy targets enterprise automation rather than productivity growth. SAP already offers more than 40 agents in HCM alone, grouped into AI Assistants, with at least 22 more planned by year-end covering functions such as pay equity analysis. A "Workforce Planning" Superagent is due later this year, leveraging task-intelligence technology from the planned Techwolf acquisition.

Leadership changes are notable: Siva Sunderasan, formerly of Oracle and PeopleSoft, is now GM and Chief Product Officer of SuccessFactors, and Rebecca Carr, who ran SmartRecruiters, is President of HCM Products. SmartRecruiters — with its candidate-facing agent "Winston" — becomes SAP's strategic recruiting platform. For the first time in Bersin's visits, CEO Christian Klein described HCM as a strategic part of the ERP.

SAP's governance stack, the AI Agent Hub, is built on LeanIX and connects to Cloud ALM, Signavio and Cloud Identity Services. It treats agents as enterprise technology assets — inventoried with owners, processes, risk categories and dependencies, including the LLMs and MCP servers they use — whereas Workday treats them as digital workers.

Who else is competing?

The rebirth extends beyond the two giants:

• Oracle: more than 1,000 agents built into its ERP suite; cloud revenue grew 14% last year, matching Workday's rate.
• UKG: growing at double-digit rates, focused on frontline work — 72% of the US workforce.
• HiBob: 5,500+ customers, growing 30% or more, with seven Superagents and a $166 million investment from Salesforce Ventures.
• Dayforce, Gloat and Darwinbox are also shipping AI-native offerings, with Dayforce having gone private to fund expansion.

What changes for employees?

The deepest shift may be daily usage. Workday's 80+ million users and SAP's 120 million+ mostly touch their systems a few times per year — checking vacation balances or 401(k) accounts. With "AI as the new UI," Bersin argues active usage could rise 10 to 100 times, since employee data, context and permissions already sit inside the HCM. His research has catalogued more than 240 business use cases for employee needs, and he sizes the opportunity at $10 billion or more — pressure that smaller standalone agent startups will feel first as customers default to their HCM vendor's agents.