PHILADELPHIA, PA — Phenom has released its inaugural State of AI & Automation for HR: 2026 Benchmarks Report, revealing that while most organizations have adopted some form of artificial intelligence or automation, very few are using it at a level that delivers meaningful business impact.
The report evaluates nearly 500 organizations across more than a dozen industries using Phenom’s proprietary AI & Automation Maturity Model. The framework scores companies from Level 0 to Level 5 across two dimensions: intelligence, ranging from no AI to fully integrated intelligence, and automation, ranging from manual processes to fully automated operations.
The findings show a wide gap between ambition and execution. Fewer than 1 percent of organizations reached Level 4, classified as high intelligence, and just 5 percent achieved high automation. The vast majority clustered in the middle, with 86 percent operating at assisted or semi-automated intelligence levels and 83 percent limited to task-level or partial process automation.
Industry adoption varied widely. Healthcare organizations led in automated candidate campaigns and nurturing, with 90 percent adoption. Financial services showed the highest use of AI for candidate matching and fit at 68 percent. Transportation organizations reported the strongest adoption of automated interview scheduling at 59 percent. Retail lagged, with 88 percent lacking advanced automated screening despite high-volume frontline hiring needs.
Phenom said the data reflects mounting pressure on HR teams facing persistent labor shortages, high turnover, and rising hiring volumes. Manual workflows and disconnected systems continue to slow recruiting and talent management at a time when speed and precision are increasingly critical.
A companion survey of more than 100 HR professionals found that 76 percent cited automating manual tasks and improving recruiter productivity as their primary motivations for adopting AI. Yet 66 percent said their organizations have low or no AI adoption in talent management, and nearly one-third admitted limited knowledge of how to apply AI effectively in HR.
Organizations that have moved beyond experimentation are seeing measurable gains, according to the report. Franciscan Health cited improvements across its hiring funnel after deploying AI-driven tools.
“In the past four years, we have seen a surge in the use of recruitment technologies over and above our traditional systems,” said Ellen Page, director of talent acquisition at Franciscan Health. “We needed AI-driven tools for an enhanced career site, our application screening processes and a chatbot for 24/7 initial candidate interactions. These innovations help streamline the hiring process, improve our efficiency and enhance our experiences.”
Elara Caring reported similar results from using AI-powered voice agents to manage large-scale hiring across multiple states.
“We hire roughly 17,000 home health aides across 50 branches nationwide, and our staffing demands can shift dramatically from state to state based on market conditions at any given moment,” said Anne Strickroot, vice president of talent acquisition at Elara Caring. “The results of our AI voice agent speak for themselves: candidates interviewed by AI accepted their first assignment faster and logged an average of three hours more per week than those interviewed by human recruiters.”
Strickroot said the organization also reduced time-to-hire by about 1.3 days, giving it greater flexibility to expand into new markets.
Phenom’s report outlines a practical roadmap for HR leaders seeking to move toward measurable outcomes, including automating screening and scheduling, deploying AI-driven candidate matching, and applying real-time intelligence to improve interview quality and reduce fraud risk.
“The question every CHRO should be asking their team is: How fast can they get AI to work for their business?” said Mahe Bayireddi, chief executive officer and co-founder of Phenom. “Phenom is providing a roadmap of what maturity looks like. We’re taking a proactive role in helping organizations close the gap between where they are and where they need to be. HR’s greatest moments are upon us.”
Phenom said the report is intended to help HR leaders assess their current state, prioritize investments, and move from isolated pilots to integrated AI and automation strategies that deliver sustained hiring, development, and retention gains.
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