Although we have seen an uptick in certain markets, it would be overstated to say that we’ve seen a dramatic spike in hiring activity. In fact, the general theme in Q3 has been somewhat consistent with what we’ve seen throughout the year: HR leaders are being asked to rationalise and do more with less. The focus on the bottom line has meant that organisations are looking closely at their largest cost – their people. As referenced in our Q1 report, findings by Gartner’s 2025 CHRO Budget Benchmark Report indicate that HR teams are becoming increasingly lean, with one HR full-time equivalent supporting 58 employees on average. This has prompted CHROs to reassess their priorities and adopt more innovative approaches to budget allocation, with many exploring offshore centres for specific roles and continuing to embrace AI and automation trends
A positive trend in the market is the increasing number of large organisations targeting and starting transformation programmes. As organisations look to adapt to the changes brought about from AI adoption and automation, many are taking the opportunity to look at the target operating model and are assessing whether it is still fit for purpose and how/where they can make significant changes. Naturally, this has created some interesting opportunities in the market on both a permanent and interim basis, although often there is a wider and broader impact upon the existing team members.
The most consistent theme throughout Q3 in discussions with CPO/CHROs has been the opportunities, but also the risks, associated with the deployment of AI as well as the move to offshoring certain roles. The advantages and benefits have been widely discussed and shared, with many often highlighting some of the expected long-term talent risks.
As we said in our introduction, one of the dilemmas facing HR leaders currently is the move towards deploying AI to streamline and automate systems, tools and processes. Combined with this, we have seen a noticeable shift in moving some of the specialist (COE) roles offshore to lower cost centres. Although this isn’t a new trend and larger organisations moved to this model many years ago, we are beginning to see this model being implemented by some of the smaller businesses. Combined with AI adoption, it potentially presents a talent shortage issue in the mid-longer term for specialist roles.
Organisations and leaders will look to leverage the benefits of AI deployment, and in most cases it will help employees become more efficient and productive (read our article Future trends: how AI is shaping the HR industry). We won’t get into the debate on the benefits of AI adoption here, but we do want to raise the following question: if AI can replace some of the entry level work, and businesses continue to relocate specialist roles to lower cost locations, what will this mean for future talent in years to come? Where will it come from?
We know larger organisations, particularly the banks, have already adopted this move to lower cost regions such as Eastern Europe, India and Southeast Asia, but it is the recent trend of mid-sized businesses following suit that potentially provides HR leaders with a future problem.
Once AI is widely adopted by organisations, there will be an inevitable impact upon hiring. The most likely impact will be on entry-level and more junior hires, as AI-driven tools will pick up on the more administrative and BAU tasks therefore requiring fewer junior team members. Combing this with these roles often sitting in lower cost centres will have a significant impact upon talent pools in major higher-cost hubs such as London and New York.
This dilemma may not materialise for another 3-5 years as organisations see the benefits of increased efficiency and a lower cost base, and so it is a longer-term issue that identifies itself upon succession planning for key leadership roles. The talent pool in London for critical specialist function roles is already shallow, particularly for regulated organisations. Should we see less junior talent progressing through the ranks (a likely result), organisations will need to carefully consider how they develop succession plans for key roles – often located at headquarters or in strategic locations where stakeholders are based.
The Catalyst team has been engaging with clients on the longer-term talent consideration and is collaborating with Dartmouth Partners’ Early Careers team on an event to address this talent issue. Bringing together a group of recent graduate students, we will showcase potential career options in HR and specifically within specialist functions, such as reward. The clients we’ve spoken to have shown a strong interest in supporting and speaking at the event, with many keen to hire interns or graduates afterwards to help build their future talent pipelines.
If you would be interested in participating, please do reach out to discuss further.
Over the summer, while some areas of HR slowed, hiring across reward, infrastructure, and people functions has remained active, particularly as organisations prepare for year-end. Many employers are conscious that delaying action risks entering the busy close of year with under-resourced teams. As a result, alongside permanent hiring, there has been a noticeable rise in the use of fixed-term contracts and interim solutions to ensure sufficient coverage, especially during periods of transition, leave, or while permanent searches are underway.
The UK market has faced significant socio-economic headwinds in Q3, with businesses responding to uncertainty and budgetary pressures by scaling back permanent recruitment. Nonetheless, candidate availability has risen sharply, reflecting ongoing restructures and redundancies, and creating a deeper pool of skilled professionals. Certain areas bucked the trend: construction and engineering saw modest growth, and there was steady demand for HR Advisors, HR Managers, and Business Partners, particularly in financial services, asset management, and insurance. Roles tied to employee relations, compliance, and wellbeing have also been in demand as organisations navigate heightened regulatory scrutiny and more complex workforce dynamics.
At the same time, organisations are shifting focus from transactional hiring to more strategic workforce planning. This has created new opportunities for Talent Acquisition specialists with consultative, data-driven approaches, as well as for Learning and Development and leadership roles designed to strengthen manager capability and embed robust performance management practices. Interim and fractional appointments are also gaining traction, allowing organisations to access senior expertise on a flexible basis while managing costs.
Across Europe, hiring has been steadier, with demand sustained for HR generalists, operations leads, and culture and inclusion specialists in hubs such as Paris, Frankfurt, Amsterdam, Dublin, and Warsaw. Notably, the traditional DEI function is evolving into broader, embedded mandates within business partnering, reflecting a more integrated approach to culture-building. Demand remains strong for HRIS leads, shared services specialists, and people data experts as multinationals continue to centralise operations and invest in scalable, tech-enabled solutions. With AI and automation initiatives gathering pace, the need for HR infrastructure and transformation talent is expected to remain strong heading into Q4.
Hiring activity across the U.S. financial services remained steady through Q3, with ongoing demand for reward and compensation professionals and continued expansion of Talent Acquisition teams. Organizations have been actively adding coordinators, campus recruiters, and senior recruiters to support both front-office and corporate function hiring, reflecting a sustained focus on building robust talent infrastructure. In parallel, there has been a noticeable increase in the demand for HR Business Partners with strong strategic capabilities, able to influence commercial decisions alongside business lines. Mid-level HR generalist roles are also on the rise, often created to manage operational work stemming from front-office headcount surges earlier this year, freeing senior HR leaders to concentrate on high-impact strategic initiatives. As in the UK and Europer, some firms have also been investing in building out their Learning and Development functions, with a particular focus on leadership development, as they prepare their talent pipelines for 2026 and beyond.
Outside traditional financial services sectors such as banking, asset management, and alternatives, insurance firms are continuing to see heightened hiring activity. This quarter we’ve seen many candidates transitioning over from established financial services firms into the insurance sector, often drawn by the opportunity to build HR functions from the ground up. Historically, insurance organizations have less mature HR functions compared with traditional financial services, leaving significant “white space” for professionals to create and shape impactful programs. Coupled with competitive compensation packages and flexible working arrangements, these roles are particularly attractive to experienced HR professionals seeking strategic influence, hands-on impact, and the chance to drive transformation within developing HR landscapes.
As we discussed above, there is increasing focus on AI adoption and it is a significant trend in the U.S. financial services sector across HR and broader business operations. CHROs are prioritizing candidates who are true thought-leaders in AI and tech, and there is a strong demand for professionals who actively engage with emerging trends, attend conferences, and bring a proactive mindset to innovation, rather than relying solely on traditional HR expertise. This has driven demand for senior HR operations, systems, and service delivery roles where individuals not only manage core HR processes but also have the capability and ambition to move into enterprise-wide AI transformation projects or cross-functional working groups. Many HR operations and systems professionals are now leveraging their operational expertise to influence broader business transformation, bridging the gap between HR, technology, and strategic initiatives across the organization.
Finally, HR Shared Services is experiencing a strategic evolution. Once considered a purely operational “engine room,” service delivery is now being recognized as a core leadership function. Shared Services leaders are elevated to the HR leadership team, providing critical insights into workforce trends, improving employee experience, and enabling scalable, tech-enabled processes. By bringing operational expertise to strategic discussions, these roles help ensure initiatives are executed efficiently while freeing business partners to focus on value-adding work. Organizations embracing this shift are seeing faster execution, deeper workforce intelligence, and a more connected employee experience; trends that we expect to accelerate into 2026, with AI-driven service models and predictive analytics further positioning Shared Services at the heart of modern HR transformation.
Asia’s HR hiring landscape is characterised by optimism in high-growth markets, challenges related to skills shortages, and the transformative impact of technology and AI. Countries such as Singapore, India and China demonstrated a more robust hiring optimism, while others like Hong Kong exhibited a more cautious outlook. Nevertheless, in Hong Kong, we still see a slight improvement in hiring activity in Q3 as compared to the first half of this year, especially in the HR Director/HR Business Partner and COE roles like Total Rewards and Learning and Development/Talent Management.
We’ve discussed how the use of AI in HR is transforming how businesses manage their HR function, from talent acquisition to employee engagement and retention, and across Asia, it is no different. Recent research indicates that around 60% of companies in Asia are now using AI to streamline their HR processes. Tools such as an applicant tracking system (ATS) utilise AI to efficiently screen resumes and identify suitable candidates based on predefined criteria. AI-driven analytics also allows firms to monitor employee engagement by using feedback obtained from surveys and communication channels. Predictive analytics can also pinpoint potential turnover risks so that HR can take a proactive approach to improving the situation, and fine tune existing retention strategies. And the use of chatbots is growing as well, empowering employees with help and info 24/7, enhancing the end-to-end employee experience.
However, opportunities of AI integration go along with issues relating to privacy and ethics in the use of AI, as well as getting employee buy-in. It is important to keep transparency and fairness in AI-based decision making to retain the workforce’s trust. In every way, the introduction of AI into HR functions in Asia is making processes more efficient, decisions more data driven and workforce more engaged.
Q3 shows a market that is stable and evolving, with HR teams balancing cost pressures and strategic priorities. Mid-level HR generalists, HRBPs, and expanding Talent Acquisition teams are enabling senior leaders to focus on high-impact initiatives, while HR Shared Services is emerging as a strategic leadership function driving workforce insights and employee experience.
AI and technology are set to redefine HR, automating administrative tasks and enabling predictive workforce planning, talent analytics, and enhanced employee engagement. However, the increasing adoption of AI may also shrink the pipeline of junior talent, as entry-level roles are reduced or moved offshore, creating potential long-term succession challenges for key specialist and leadership positions. Organisations that strategically leverage AI while planning for talent development and ethical, transparent deployment will gain a dual advantage: operational efficiency today and a sustainable, future-ready workforce tomorrow.
If you are interested in scheduling a meeting to discuss any of the above trends in more depth with our market specialists, please do get in touch at catalyst@catalystpartners.com.
