In Spain, 58% of mid-sized companies plan to update or replace their Human Capital Management (HCM) system in the next three years, compared with 43% who say they are satisfied with their current tool, according to the latest study by Workday.
Under the title “Trends and Challenges in HR Digitalization in the Spanish Mid-Market”, the report analyzes the digital maturity of the HR function in Spain’s mid-market, as well as the technological and organizational barriers that slow its evolution toward a more efficient, data-driven model.
The report confirms that talent shortages are the most cross-cutting barrier for Spanish mid-market companies: they affect nearly every autonomous community, sector, and company size, and worry even more than technology adoption — mentioned by almost four in ten respondents in industry, technology, construction, and financial services — or the broader economic context.
Integrations, the problem cited by one in two companies
When asked about the difficulties of their current solution, integrations with other systems top the list: one in two companies identifies them as the main problem, ahead of usability and the employee experience. This hampers information flow and undermines confidence in subsequent analyses.
However, when asked where they want to direct short-term technology investment, companies prioritize Artificial Intelligence (35%) and data management (25%) over system unification (22%) or security hardening (9%). In other words: they want to push ahead with AI before solving the underlying issue—integrations—which the report identifies as one of the main risks to delivering real impact from digitalization.
AI in HR stays at 46%, the study’s lowest figure
The report notes that HR operational processes—such as recruitment or talent management—maintain a relatively uniform level of maturity, around 65%. The use of AI in these processes, by contrast, sits well below, at only 46%, the lowest value across the survey.
This gap also shows up in decision-making: only one in four companies says they use data in an advanced way to decide, while two in three acknowledge a low or very low level. AI, for its part, is already in use within these organizations, though its real integration into corporate applications remains relatively rare, underscoring that the challenge is not solely technological but also about identifying use cases with tangible impact.
Basque Country leads HR digital maturity
Beyond the national snapshot, the study also analyzes HR digitization by region, revealing notable differences across territories. The Basque Country emerges as the most advanced region, with 73% technology maturity and 77% in HR internal processes, while Catalonia (40%) and Madrid (32%) are the regions where the greatest share of companies report dissatisfaction with their current HCM software.
Internal HR challenges also vary by region: talent shortages are a particular concern in the Basque Country (57%) and Madrid (46%), while in Catalonia (50%) and the Valencian Community (40%) the main challenge is digital transformation. These differences confirm that while HR digitization is advancing across Spain, it does so at different paces depending on the region, shaped by the particularities of each business landscape.
Six levers to close the gap
The report condenses into six keys for accelerating HR transformation in the Spanish mid-market:
- Address talent shortages as a strategic challenge, strengthening external attraction and internal development (upskilling, reskilling, career paths) to improve retention.
- Align purpose, leadership, and culture, so technology can be adopted, sustained, and scaled within the organization.
- Strengthen data foundations, with consistent models and robust integrations, before scaling analytics and AI. Simplify the technology architecture, prioritizing unified platforms that are easy to extend.
- Adopt AI gradually, starting with concrete, measurable-use cases. Consolidate HR as a strategic function capable of anticipating talent needs and acting as a driver of productivity.
“These data indicate that Spanish mid-sized companies are at a pivotal moment: they need to modernize their HR systems and, at the same time, take a decisive leap toward Artificial Intelligence. At Workday we are deploying a new generation of AI agents, governed and with business context, on a single platform for people and finances, so that AI stops being a pilot in isolation and translates into better decisions and more agile processes. With solutions like Workday GO, designed specifically for the mid-enterprise, we bring these capabilities to mid-sized firms without the complexity of large-scale deployments,” says Adolfo Pellicer, VP & Country Manager of Workday in Iberia.
“The Spanish mid-market has a clear opportunity to close the gap between its mature operational processes and its strategic ambition to tackle the talent challenge. Companies that align their talent strategy, the services to execute it, their data, and resolve their integration problems before scaling AI will turn this transformation into a real competitive advantage, and not just another investment without a clear return,” adds Miguel Valdivieso, partner responsible for People & Change at KPMG in Spain.
