AI and Analytics Push Compensation Management from Annual Exercise to Continuous Strategy
November 21, 2025 - Total compensation management (TCM) software has moved to the center of enterprise pay strategy. New research from ISG finds compensation decisions are now continuous, cross-functional and grounded in analytics, bringing finance, HR and business leaders into a shared system for planning, operations and communication.
Think of TCM as an operating layer for compensation. It helps leaders make pay decisions that are equitable, explainable and economically sound-while keeping managers equipped to communicate clearly with employees.
Why this matters to management
Pay isn't a once-a-year spreadsheet anymore. It's an ongoing, data-driven process that affects retention, performance and trust.
ISG's 2025 Buyers Guides show TCM platforms now diagnose pay issues, simulate outcomes and prescribe actions. They also bring transparency to the front line, so managers can explain decisions-with confidence and consistency.
What today's TCM platforms deliver
- Analytics as standard: Beyond reports, platforms surface risks, model scenarios and highlight gaps in pay equity and compliance.
- AI where it counts: Recommendations, anomaly detection and simulations for salaries, bonuses and equity-paired with audit trails so leaders can explain the "why."
- Manager communication: Tools to present total rewards, set expectations and build trust through clear, repeatable messaging.
- Equity by default: ISG expects most enterprises evaluating compensation software through 2027 to require automated pay equity modeling and anomaly detection.
How ISG evaluated the market
The ISG Buyers Guide for Total Compensation Management rates 23 providers across four platform categories: Total Compensation Management, Compensation Insights, Compensation Operations and Compensation Planning. Ratings span Product Experience (Capability and Platform) and Customer Experience, with Leaders recognized in each category and Overall Leaders named per platform.
Providers assessed:
- 15Five
- ADP
- Anaplan
- BambooHR
- beqom
- Cornerstone
- Darwinbox
- Dayforce
- HiBob
- HRSoft
- Infor
- isolved
- Oracle
- Paycom
- Paycor
- Paylocity
- Payscale
- PeopleFluent
- Salary.com
- SAP
- UKG
- Unit4
- Workday
2025 Overall Leaders by category
- Total Compensation Management: Oracle (top Overall Leader), ADP, Salary.com. All three rated Exemplary; Payscale and SAP also rated Exemplary. No providers rated Innovative.
- Compensation Insights: Oracle (top Overall Leader), Salary.com, ADP. All three rated Exemplary; Payscale also rated Exemplary. SAP and Workday rated Innovative.
- Compensation Operations: Oracle (top Overall Leader), ADP, Salary.com. All three rated Exemplary; beqom, Dayforce, Payscale, SAP, Workday and UKG also rated Exemplary. Darwinbox, Infor and Unit4 rated Innovative.
- Compensation Planning: Oracle (top Overall Leader), Salary.com, ADP. All three rated Exemplary; Anaplan, beqom, Dayforce, Payscale and SAP also rated Exemplary. UKG and Workday rated Innovative.
Emerging providers: faster iteration and fresh ideas
ISG's companion Buyers Guide for Compensation Emerging Providers evaluated 11 vendors in one platform category (Compensation): Aeqium, BetterComp, ChartHop, CompLogix, Compport, Decusoft, Lattice, Leapsome, Pave, Quisitive and Zimyo.
- Overall Leaders: Pave (top Overall Leader), Lattice, Leapsome.
- Exemplary ratings: Compport, Lattice, Pave.
- Innovative ratings: Aeqium, ChartHop, Decusoft.
What to do next
- Audit your stack: Map current comp processes to analytics, AI, planning and communication needs. Identify manual bottlenecks.
- Set AI guardrails: Require explainability, audit logs and bias checks for any automated recommendations.
- Unify HR, finance and business: Establish a shared operating model so budgets, policies and manager actions stay in sync.
- Standardize manager communications: Equip leaders with consistent total rewards narratives and FAQs.
- Plan for equity by default: Bake pay equity modeling and anomaly detection into every cycle, not as an afterthought.
- Roadmap in phases: Pilot insights first, then automate operations, then mature planning and simulations.
The ISG Buyers Guides are independent, market-wide assessments. For executive summaries and access to full reports, visit ISG Software Research.
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