AI Elevates Payroll’s Workforce Value, ISG Says

Key Terms

ai technical

Artificial intelligence (AI) is technology that enables machines to mimic human thinking and learning, allowing them to analyze information, recognize patterns, and make decisions. For investors, AI matters because it can improve how businesses operate, create new products, or identify opportunities faster and more accurately than humans alone, potentially impacting company success and market trends.

machine learning (ml) technical

Machine learning (ML) is a way computers can automatically find patterns and make decisions based on large amounts of data, without being explicitly programmed for each task. For investors, it matters because it helps identify trends, predict future outcomes, and improve decision-making, much like how a seasoned expert might spot opportunities by recognizing subtle clues. This technology enables smarter analysis and more informed investment choices.

intelligent automation technical

Intelligent automation is the use of software 'robots' combined with artificial intelligence to take over not just repetitive tasks but also decisions that previously needed human judgment, like a smart assistant that follows a recipe and tweaks it when ingredients change. For investors, it matters because it can lower costs, speed up operations, reduce mistakes, and enable faster scaling—factors that can improve profit margins, cash flow and a company’s competitive position, while also requiring upfront investment and oversight.

anomaly detection technical

Anomaly detection is software that looks for patterns or datapoints that don’t fit expected behavior, like a smoke detector spotting an unusual signal in a room. For investors it flags unexpected events — sudden trading spikes, accounting irregularities, unusual customer behavior or operational problems — providing early warning of risk or opportunity so decisions can be made before small problems become big losses.

on-demand pay financial

On-demand pay is a payroll service that lets workers access wages they've already earned before the regular payday, similar to taking money from a personal piggy bank of hours worked. Investors care because it can drive recurring transaction fees, increase user engagement and employee retention for client companies, and create growth opportunities for payroll and fintech providers while carrying operational and regulatory risks that affect profitability.

unified data models technical

A unified data model is a consistent blueprint for organizing and labeling information across different systems so data can be combined and understood without repeated clean-up. Think of it as a common language or standard filing system that lets teams and software pull accurate answers quickly. For investors, it matters because it lowers integration costs, speeds reliable analysis and reporting, and reduces the chance that important signals are missed or misinterpreted.

Robust platforms give companies more visibility, agility to meet employee needs and changing regulations, new research says

STAMFORD, Conn.--(BUSINESS WIRE)-- Payroll management software, enhanced with AI and other new technologies, is a critical part of the value employees derive from working at an organization, according to new research from global AI-centered technology research and advisory firm Information Services Group (ISG) (Nasdaq: III).

The ISG Buyers Guides™ for Payroll Management, produced by ISG Research, provide the rankings and ratings of 29 software providers and their products to support agile, integrated payroll capabilities that meet growing enterprise requirements. The research finds that companies increasingly need payroll systems that help them navigate complex regulations, view data in real time and satisfy rising employee expectations for financial flexibility.

“Payroll technology is a strategic investment in business resilience and workforce stability,” said Matthew Brown, director of research, Human Capital Management, ISG. “Employee experience is critical for growth and competitiveness, and compliance failures are increasingly expensive. Enterprises are investing in payroll platforms with AI and advanced automation to address these challenges.”

Large organizations need centralized visibility and control to support diverse, often global workforces, including remote employees and contractors in regions with different regulations, the research finds. Providing a positive employee experience increasingly requires intuitive self-service tools that help to support financial wellness through features such as on-demand pay and personalized statements. Solutions for delivering all these capabilities are built on unified data models that eliminate silos between payroll, human resources and finance to create a single source of truth. They go beyond core processing, providing increasing degrees of insight, configurability and operational control.

Leading payroll management systems are incorporating AI, machine learning (ML) and intelligent automation to meet these growing requirements, ISG finds. A growing number of enterprises use proactive anomaly detection powered by AI and ML to flag errors before payroll runs, preventing expensive re-runs. By 2028, half of all enterprises will use payroll platforms that use AI to identify mistakes and omissions and notify managers to resolve them, the research finds.

Enterprises are also turning to payroll managed services, which offer a hybrid model that enable companies to manage payroll in-house while using optional expert assistance for tasks such as compliance, tax filing or full-service payroll execution, ISG finds. This model gives enterprises operational control with the flexibility of tapping into scalable, specialized support as a safety net without switching providers.

For its 2025 Buyers Guides for Payroll Management, ISG evaluated software providers across five platform categories — Payroll Management, Payroll Managed Services, Global Payroll, U.S. Payroll and U.S. Payroll Emerging Providers — and produced a separate Buyers Guide for each. A total of 29 providers were assessed: ADP, BambooHR, Darwinbox, Dayforce, Deel, EPAY Systems, Gusto, Infor, Intuit, isolved, Keka, Namely, Neeyamo, Netchex, Oracle, Oyster, Papaya Global, Patriot Software, Paychex, Paycom, Paycor, Paylocity, Rippling, Sage, Sage Criterion, SAP, UKG, Workday and Zoho.

ISG rates software providers in five evaluation categories: Overall, Product Experience (incorporating Capability and Platform) and Customer Experience. Providers ranked in the top three for each evaluation category are named as Leaders. Within each platform category, those with the most Leader rankings are named as Overall Leaders.

The Overall Leaders of the 2025 ISG Buyers Guides for Payroll Management were the following:

Payroll Management: ADP was the top Overall Leader, followed by Oracle and UKG. ADP was designated a Leader in five evaluation categories, Oracle in five and UKG in four. All three Overall Leaders were rated Exemplary, along with Dayforce and SAP. No providers were rated Innovative.

Payroll Managed Services: ADP was the top Overall Leader, followed by UKG and Dayforce. ADP was designated a Leader in five evaluation categories, UKG in five and Dayforce in four. All three Overall Leaders were rated Exemplary, along with Deel and isolved. Neeyamo was rated Innovative.

Global Payroll: ADP was the top Overall Leader, followed by Oracle and UKG. ADP was designated a Leader in five evaluation categories, Oracle in five and UKG in four. All three Overall Leaders were rated Exemplary, along with Dayforce, SAP and Workday. Infor was rated Innovative.

U.S. Payroll: ADP was the top Overall Leader, followed by Oracle and UKG. ADP was designated a Leader in five evaluation categories, Oracle in five and UKG in four. All three Overall Leaders were rated Exemplary, along with Dayforce, Deel, isolved, SAP and Workday. Infor and Paylocity were rated Innovative.

U.S. Payroll Emerging Providers: Zoho was the top Overall Leader, followed by Intuit and Keka. Each was designated as a Leader in four evaluation categories. Zoho and Keka were rated Exemplary, along with Sage. Intuit was rated Innovative.

“Organizations need payroll platforms with configurability, insight and operational control as regulations and employee needs constantly evolve,” said David Menninger, executive director, software research, ISG. “This research program provides a unified understanding of payroll, from software to managed services, that can help HR and finance leaders evaluate their existing approaches while reviewing what is possible with other providers.”

The ISG Buyers Guides for Payroll Management 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 Buyers Guides for Payroll Management 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 Research.

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, in-depth knowledge of provider ecosystems, and the expertise of its 1,600 professionals worldwide working together to help clients maximize the value of their technology investments.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260115973283/en/

Press Contacts:



Laura Hupprich, ISG

+1 203 517 3100

laura.hupprich@isg-one.com



Julianna Sheridan, Matter Communications for ISG

+1 978 518 4520

isg@matternow.com

Source: Information Services Group, Inc.