Malleability in the HRIS Industry
Executive summary
Outside of all-in-one applications, HRIS appears to be leading the charge on malleable software. The flexibility demanded of HR systems is leading to more and more providers putting powerful tools in the hands of their users.
Despite this, the industry still has a long way to go. Only 7.1% of HRIS platforms are malleable, compared with 45.3% that are extensible and 47.6% that are configurable.
Malleability becomes more common as products move upmarket. It appears in 5.9% of SMB products, 7.7% of mid-market products and 11.8% of enterprise products. But even at enterprise scale, vendors overwhelmingly respond to complexity with extensibility rather than true malleability.
AI has only just started to change this structure. Only 7 of the 114 malleable platforms use natural language as part of the building interface. Most malleability is still delivered through traditional no-code tools such as drag-and-drop form builders, object builders, workflow designers and page builders.
The important shift is therefore still ahead. HRIS has already moved from configuration toward APIs. AI creates the possibility of moving the industry again: from software that developers can extend to software that HR teams can reshape themselves.
1. HRIS is extensible, but it's not yet malleable.
The current industry structure is:
| Product architecture | Share of HRIS platforms | What the customer can do |
|---|---|---|
| Configurable | 47.6% | Change settings, policies, rules and supplied workflows |
| Extensible | 45.3% | Add integrations, custom fields, API-driven functionality or code |
| Malleable | 7.1% | Create new screens, data structures, applications, forms or processes |
| Total | 100% |
How the rated market divides
- Configurable
- Extensible
- Malleable
Base: 1,600 products with a completed malleability assessment. Shares are of that whole and total 100%.
Configuration lets a customer decide how an existing piece of software behaves. Extensibility lets a developer add something around it. Malleability lets the customer create something the vendor did not originally ship.
Today, 92.9% of HRIS products stop short of malleability.
2. Most platforms still require developers in order to modify them.
79% of HRIS platforms have an explicit API, developer or code-based extension path.
Malleable platforms allow for changes to software without a developer being involved. This is much more rare, with only 7.1% of the industry allowing any sort of modification.
The typical modern HRIS therefore looks something like this:
Vendor-built core → configuration layer → API → developer/integration ecosystem
With a very small minority looking like this:
Vendor-built core → configuration layer → user built extensions
A platform can be extremely flexible for an engineering team while remaining relatively rigid for the HR department themselves.
Much of what HRIS vendors currently market as customisation is therefore better described as technical extensibility.
3. Genuine malleability goes well beyond custom workflows
Among malleable platforms:
33% let customers build new screens or data structures, while 52% let them build something very specific, such as a form, a flow or a report.
What a malleable product lets a customer build
Base: the 114 malleable platforms, not the whole market. The two shares are the ones the report calls out and do not sum to 100%.
The emerging model is increasingly about creating new pieces of the application itself.
An HR administrator might define a new object, decide which fields it contains, create the page employees interact with, establish permissions and then attach automation to it. The resulting capability can sit alongside payroll, leave, performance or employee records even though the HRIS vendor never designed that particular application.
This is what separates malleability from conventional extensibility: it changes who gets to create software.
4. Shapes illustrates where HRIS could be heading
This report is not affiliated with Shapes. As a case study though, Shapes is a clear example of AI-native malleability with their "Vibe views".
Shapes allows users to describe what they need in clear language, and then creates it against live people data. Examples include attrition against employee satisfaction, unused leave liability and flight risk.
"I’ve seen things built with Vibe that our team hadn’t even imagined" - David Virtser, VP R&D at Shapes.
Shapes aren't the only ones who are exploring this area. Companies like Bridgit Bench also have similar features with "Bridgit-ai", and larger players like Employment Hero have hinted at upcoming reporting features using natural language.
5. Malleability increases upmarket
Malleability becomes more common as HRIS moves toward larger customers.
Among products with an explicit SMB, mid-market or enterprise position:
| Market segment | Configurable | Extensible | Malleable |
|---|---|---|---|
| SMB | 42.2% | 52.0% | 5.9% |
| Mid-market | 15.4% | 76.9% | 7.7% |
| Enterprise | 14.7% | 73.5% | 11.8% |
Architecture by market segment
- Configurable
- Extensible
- Malleable
Base: 214 products carrying an explicit SMB, mid-market or enterprise position, not the 1,600 rated products. Each segment's own count is printed beside its name.
Combining mid-market and enterprise, 8.9% of upmarket HRIS platforms are malleable, compared with 5.9% downmarket. Malleability is therefore about 1.5 times as prevalent upmarket.
Due to the demands of Enterprise customers, upmarket companies are pushed towards extensibility at the minimum. It's rare to find an upmarket HRIS platform that has no ability to be changed. Those changes are still bounded to developers rather than end users for the most part though.
Purely configurable products account for 42.2% of SMB HRIS, but only about 15% of mid-market and enterprise HRIS.
This is consistent with the economics of enterprise HR.
Larger organisations have more unusual approval structures, entities, employee populations, compliance requirements, legacy systems and internal processes. A completely fixed product is unable to accommodate that variation.
But most vendors solve that problem with APIs and technical extensibility rather than giving the HR function a general-purpose building environment.
The enterprise market therefore has a much stronger need for malleability than the SMB market, but the dominant industry response remains extensibility.
6. Agents vs Malleability
There are a growing number of HRIS companies offering Agentic features into their products. Roughly 80 of the 1600 (5%) products in market feature an agent, copilot, or some sort of AI assistant.
Of those, 4 allow the user to create their own agent.
A distinction we made for this report: malleability has to actually change something about the software. Most agents enable ephemeral conversations, with nothing leftover.
Agents are a particularly difficult thing to measure as well, since many platforms that offer an API implicitly enable user-driven agents. Claude code connected to an API is an agent, but it might not be advertised on any marketing collateral.
It's simply too early to tell if user agents (claude code over an API) or inbuilt agents are beneficial or detrimental to a platform. Users may want to use their own agent, but that may not have the same outcomes as an inbuilt agent. Time will tell if the market will reward the outcome or the preference of end users.
7. Is malleability rewarded?
This is a difficult topic to draw any meaningful conclusions on. Many all-in-one horizontal platforms are also reasonably malleable. This clouds the data in a number of ways, leaving some unanswered questions.
- Are all in one platforms capturing territory in the HRIS market because they're malleable?
- Conversely, is malleability irrelevant, and these platforms simply have a more direct channel to HR customers?
It does appear that more popular pure-HR products do trend malleable. This lines up with the demands of larger customer bases. This is a recent trend, since historically the answer to this has been developer extensibility.
More users = More demands = More pressure to add malleability or extensibility.
That said, the data is bifurcated. Brand new products also trend malleable, as they usually sell on being AI native, or agentic.
What is clear from the data is that as companies move up market, they increase their malleability. This at least shows that larger deals reward malleability.
8. AI currently enables very little of HRIS malleability
Despite the rapid spread of AI positioning across enterprise software, HRIS malleability remains conventional.
Only 7 of 114 malleable platforms let users create or change functionality by describing what they want in natural language.
The remaining malleable products rely on familiar no-code mechanisms:
drag-and-drop interfaces, workflow canvases, form builders, page builders, custom objects, custom tables, field designers and application builders.
AI accounts for only a small fraction of malleability today, which is surprising.
No-code tools removed the requirement to know a programming language. AI can remove the requirement to know the no-code tool itself.
We anticipate that more extensible products will move towards AI in the coming 12 months.
9. The largest opportunity lies in moving from extensibility to malleability
The HRIS industry’s evolution can be understood as a sequence:
Configuration → API extensibility → no-code malleability → AI malleability
The industry has largely completed the first transition.
APIs are now sufficiently common that technical extensibility is close to being table stakes in the mid-market and enterprise segments.
The next transition is much less mature.
Only 7.1% of products allow customers to create new pieces of the application. And only a small fraction of those products use AI as their builder interface.
This creates a potentially important competitive gap.
Incumbent HRIS companies have deep systems of record, payroll infrastructure, compliance capabilities and distribution, but often expose flexibility through developers.
Horizontal platforms have substantially weaker HR depth, but have demonstrated a much more malleable product architecture.
The emerging opportunity is to combine the two: HR-native depth with horizontal-platform malleability.
10. Malleability may matter most where the vendor cannot anticipate workflows
Traditional HRIS works well when processes are universal.
Payroll, employee records, leave balances and benefits all have common structures that vendors can build into the application in advance.
Malleability becomes more valuable as the process becomes organisation-specific.
Examples include unusual employee requests, internal mobility processes, equipment or uniform tracking, specialised compliance workflows, employee relations processes, bespoke approvals, local operational processes and new HR activities the software vendor has never encountered.
This implies that malleability may not replace the core HRIS.
Instead, it can become a customer-owned application layer.
The core remains opinionated and controlled. The outer layer becomes fluid.
Conclusion
Malleability is rare: only 7.1% of platforms
The industry is balanced almost equally between configuration and extensibility, with APIs representing the main way vendors handle requirements that fall outside the standard product.
Upmarket buyers have more malleable systems, but even enterprise HRIS remains extensible rather than malleable. Large, complex orgs have created strong demand for flexibility, and vendors have historically given most of that flexibility to developers rather than HR teams.
AI has also had surprisingly little impact so far. Only 6.1% of malleable platforms use natural language as a building interface.
The next generation of HRIS may therefore be defined less by how many features a vendor has built and more by how easily customers can build features.
A note on horizontal platforms
Of the 114 malleable products, 75 are HR software. 39 are horizontal platforms (all-in-ones) or large suites where HR is one module.
Methodology note: percentages refer to 1,600 products with completed malleability assessments across HRIS. Segment comparisons use products explicitly classified as SMB, mid-market or enterprise; ratings and review comparisons use products for which those marketplace measures are available. The data was sourced using AI agents, with 5 passes across the whole dataset for accuracy.
This report was written by Jacob Duval (a human), with the stats being pulled by AI.
This source data is available on request.