AI is turning payroll into a core lever for employee value, ISG finds
Payroll isn't just back-office admin anymore. New research from ISG shows AI-driven payroll platforms are becoming central to employee experience, compliance, and financial agility.
The 2025 ISG Buyers Guides for Payroll Management assess 29 providers across five platform categories, highlighting who leads on integrated payroll, visibility, and automation. For HR teams, the message is clear: the right payroll stack reduces risk, cuts re-runs, and gives employees options they actually use.
What modern payroll must deliver
- Unified data across payroll, HR, and finance to create a single, consistent source of truth.
- Real-time visibility and control for global, distributed teams with different local rules.
- Intuitive self-service that supports financial wellness (on-demand pay, personalized statements).
- AI/ML anomaly detection to catch errors before payroll runs and avoid costly fixes.
- Configurability and operational control beyond core processing.
ISG notes that by 2028, about half of enterprises will use payroll platforms that apply AI to spot mistakes and omissions before pay runs. That shift will cut rework, improve accuracy, and boost trust across the workforce.
Managed services are rising
More organizations are adopting hybrid delivery: keep payroll in-house, and add expert services for compliance, tax filing, or full execution as needed. This model gives HR and finance operational control with on-demand support, without swapping providers.
ISG's 2025 Buyers Guides: who leads
ISG evaluated providers across Overall, Product Experience, and Customer Experience. Top performers by platform category:
- Payroll Management: Overall Leaders - ADP (top), Oracle, UKG. Also rated Exemplary: Dayforce, SAP. No providers rated Innovative.
- Payroll Managed Services: Overall Leaders - ADP (top), UKG, Dayforce. Also Exemplary: Deel, isolved. Innovative: Neeyamo.
- Global Payroll: Overall Leaders - ADP (top), Oracle, UKG. Also Exemplary: Dayforce, SAP, Workday. Innovative: Infor.
- U.S. Payroll: Overall Leaders - ADP (top), Oracle, UKG. Also Exemplary: Dayforce, Deel, isolved, SAP, Workday. Innovative: Infor, Paylocity.
- U.S. Payroll Emerging Providers: Overall Leaders - Zoho (top), Intuit, Keka. Exemplary: Zoho, Keka, Sage. Innovative: Intuit.
"Payroll technology is a strategic investment in business resilience and workforce stability," said Matthew Brown, director of research, Human Capital Management, ISG. David Menninger, executive director, software research, added that the program gives HR and finance leaders a unified view of payroll software and services to reassess current approaches.
Practical next steps for HR
- Run a quick audit: Is your payroll, HR, and finance data unified? If not, list the handoffs where errors happen.
- Ask vendors about pre-payroll AI checks: What types of anomalies are detected, how are managers alerted, and what's the false-positive rate?
- Pilot self-service features with a defined cohort: on-demand pay, pay previews, and clearer statements. Measure tickets, usage, and satisfaction.
- Decide your operating model: in-house, hybrid with managed services, or full service. Map responsibilities across accuracy, tax, filings, and support.
- Build a payroll control center: standardized calendars, change approvals, SLA tracking, and variance dashboards across regions.
- Tighten compliance: keep a live register of rule changes by location; agree on who updates what, and within what timeframe.
- Partner with finance: align calendars, journals, and reconciliation. Set targets for first-time-right payroll and post-payroll close speed.
For full details, see the source announcement on Business Wire: ISG Buyers Guides for Payroll Management.
If you're skilling up your HR team on AI for payroll and workforce operations, explore role-based learning options here: Complete AI Training - Courses by Job.
Your membership also unlocks:
