ISG Study Says Need for Flexibility is Driving Demand for AI-Powered Payroll Platforms

Enterprises seek integrated, scalable, compliant payroll systems that can serve remote workers and provide on-demand wage access

New business models, a rapidly expanding remote workforce and increasing demand for real-time, automated systems powered by AI are driving payroll transformation, according to a new series of research reports from leading global technology research and advisory firm Information Services Group (ISG) (Nasdaq: III).

The ISG Payroll Management Buyers Guides, produced by ISG Software Research (formerly Ventana Research), identify two trends that are setting new expectations for payroll systems: the rise of real-time payroll, which allows workers to access their earned wages rather than waiting for the pay period to end, and the increasing use of AI and machine learning to detect anomalies in payroll data, ensure compliance with local laws and forecast payroll expenses based on historical data.

"Demand for dynamic, real-time solutions that can handle the tax implications of employees working across state and national borders and the rise of real-time payroll is requiring enterprises to make rapid adjustments," said Matthew Brown, director of Research, Human Capital Management, ISG Software Research. "Payroll systems must keep pace with regulatory changes and align with broader HR and organizational strategies to minimize risk, drive operational efficiency and enhance employee experience."

Payroll teams now collaborate more closely with HR and finance departments, underscoring the need for modern payroll platforms that integrate with other departments' software and provide a more holistic approach to workforce management, the reports say.

Enterprises are turning to AI- and cloud-based payroll systems to accomplish those goals. AI-powered systems analyze local labor laws, apply that analysis to payroll calculations and ensure compliance across multiple jurisdictions. Cloud-based payroll systems offer scalability, flexibility and enhanced security compared with traditional on-premises systems while enabling organizations to manage payroll operations from anywhere in the world.

While AI and automation offer new tools for compliance, many organizations are still grappling with the challenges of adapting legacy systems to contemporary software, the Buyers Guides say.

Enterprises may also be missing opportunities to capitalize on the use of payroll systems as tools that offer a unique touchpoint for communicating important updates, sharing benefits information or highlighting key company initiatives. The reports say integrating communication into payroll can help companies foster a stronger connection with the workforce.

For its 2024 Payroll Management Buyers Guides, ISG evaluated software providers across five platform categories – Payroll Management, Global Payroll, International Payroll, Multi-Country Payroll, and US Payroll – and produced a separate Buyers Guide for each. A total of 24 providers were assessed: ADP, BambooHR, Darwinbox, Dayforce, Deel, Gusto, Infor, isolved, Namely, Neeyamo, Netchex, Oracle, Oyster, Papaya Global, Paychex, Paycom, Paycor, Paylocity, Rippling, SAP, UKG, Unit4, Workday and Zellis.

ISG Software Research designates the top three software providers as Leaders in each category. For the 2024 study, the leading providers in ranked order are:

Payroll Management: ADP, Oracle and UKG

Global Payroll: ADP, Oracle and UKG

International Payroll: ADP, Oracle and UKG

Multi-Country Payroll: ADP, Oracle and UKG

US Payroll: ADP, Oracle and UKG

"The future of payroll is not just about processing payments," said Mark Smith, partner of Software Research at ISG. "It's about creating a more agile, compliant and worker-centered function that supports the long-term success of the organization. Now is the time for organizations to take the next step and make payroll a driving force for positive change."

The ISG Payroll Management Buyers Guides are the distillation of more than a year of market and product research efforts. The research is not sponsored nor influenced by software providers and is conducted solely to help enterprises optimize their business and IT software investments.

Visit this webpage to learn more about the ISG Payroll Management Buyers Guides and read executive summaries of each of the five reports. The complete reports, including provider rankings across seven product and customer experience dimensions and detailed research findings on each provider, are available by contacting ISG Software Research.

About ISG Software Research

ISG Software Research, previously Ventana Research, provides authoritative market research and coverage of the business and IT software industry. It distributes research and insights daily through its user community, and provides a portfolio of consulting, advisory, research and education services for enterprises, software and service providers, and investment firms. Its on-demand service provides structured education and advisory support through subject-matter experts. ISG Buyers Guides support the RFI/RFP process and help enterprises evaluate and select software providers through tailored assessment services and the ISG Software Research Value Index methodology. Visit www.ventanaresearch.com for more information and to sign up for free community membership.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world's top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry's most comprehensive marketplace data. For more information, visit www.isg-one.com.

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Will Thoretz, ISG

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Julianna Sheridan, Matter Communications for ISG

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