Organizations are working with service providers to integrate HR functions and use AI to meet changing workforce requirements, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm.

The 2026 ISG Provider Lens® global Transformational HR Outsourcing (HRO) report finds that workforce disruption, skills shortages and evolving employee expectations are reorganizing HR priorities. The focus of HR outsourcing has shifted from efficiency and labor arbitrage to improving workforce resilience and business outcomes through broad transformation initiatives that create unified, data-driven operating models.

“Fragmented HR services can make it difficult to see where employee needs are not being met and where processes are becoming less effective,” said Stacey Cadigan, partner, ISG Human Capital Management and Enterprise Transformation. “A single accountable operating model gives leaders a clearer view of those gaps and a more consistent way to address them.”

Buyers are consolidating workforce administration, payroll, talent acquisition, learning and employee support within unified operating frameworks. This can reduce complexity and increase accountability in HR processes, including service delivery. Enterprises also seek standardized services that accommodate both global and regional workforce requirements. AI plays a growing role in functions including talent acquisition, employee support and workforce administration. Responsible AI adoption requires attention to data management, workforce trust and effective change management

Organizations are assessing workforce services across traditional and digital channels and redesigning employee journeys throughout global workforces. They are investing in digital support, self-service and experience-focused delivery models for a more seamless employee experience. These changes are intended to make services more accessible and improve workforce engagement and satisfaction across the organization. They also help HR teams provide more consistent interactions with employee touchpoints and service channels.

Workforce intelligence is becoming central to HR transformation programs and long-term strategies in many companies. Enterprises are investing in skills visibility, workforce planning, talent mobility and succession readiness to address shifting business needs. Timely workforce data and actionable insights help organizations assess capabilities and forecast future talent needs, ISG says.

“Workforce intelligence gives organizations the visibility to identify existing capabilities and prepare for future skill requirements,” said Gaurang Pagdi, lead author of the report. “Providers can help clients apply those insights to workforce decisions that support lasting change.”

The report also explores other trends affecting global multi-process HR outsourcing, including growing use of predictive analytics and rising demand for strong AI governance.

For more insights into the HRO challenges faced by enterprises, along with ISG’s advice for addressing them, see the ISG Provider Lens Focal Points briefing here.

The report evaluates the capabilities of 14 providers in one quadrant: Multi-process HRO (MPHRO) Services.

The report names Accenture, Genpact, IBM, Strada, TCS and Wipro as Leaders in the quadrant.

In addition, Infosys is named as a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition — in the quadrant.

The 2026 ISG Provider Lens global Transformational HR Outsourcing (HRO) report is available to subscribers or for one-time purchase on this webpage.

About ISG

ISG (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data and research, in-depth knowledge and governance of provider ecosystems, and the expertise of its 1,500 professionals worldwide working together to help clients maximize the value of their technology investments.

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