Enterprises transform payroll with outsourcing innovations, says ISG
CONNECTICUT, UNITED STATES — Enterprises worldwide are revolutionizing their payroll service models by leveraging new capabilities and cost efficiencies offered by outsourcing providers.
According to the 2024 ISG Provider Lens global Payroll Solutions and Services report, payroll departments are increasingly adopting advanced technologies to expand their roles beyond traditional functions, providing strategic insights and expertise in today’s complex and dynamic workplaces.
AI, machine learning revolutionize payroll systems
The report highlights that artificial intelligence (AI) and machine learning (ML) are central to the advancements in payroll technology. These innovations enhance accuracy and efficiency, allowing payroll systems to verify data instantly, learn from historical patterns to identify anomalies, and offer personalized financial insights to employees.
As enterprises aim to integrate AI across all business processes, many turn to outsourcing providers due to limited in-house resources.
Stacey Cadigan, partner at ISG Human Capital Management and Enterprise Transformation, noted, “The payroll market is rapidly changing. Providers and enterprises are embracing innovation and automation to meet evolving needs.”
Navigating complex compliance landscapes
With the proliferation of payroll regulations, companies increasingly rely on outsourcing for regulatory compliance expertise. Providers utilize AI and ML to keep systems updated with the latest rules and deploy chatbots with natural-language processing capabilities to assist enterprise users.
By integrating with government databases, these providers can automatically adjust payroll calculations, reducing compliance risks through comprehensive audit trails and custom reporting tools.
Self-service platforms enhance employee experience
Self-service platforms are also becoming a staple in modern payroll systems, offering employees easy access to their payroll information via mobile apps.
These platforms empower employees to manage certain aspects of their payroll independently, such as reviewing pay slips before finalization.
AI-powered chatbots further enhance the experience by handling routine inquiries automatically.
Predictive analytics for workforce insights
The use of predictive analytics is on the rise as enterprises seek to forecast workforce trends using historical and macroeconomic data. Providers offer internal analytics tools that help improve key metrics like payroll cycle times and error rates.
Jan Erik Aase, partner and global leader of ISG Provider Lens Research, emphasized that “data has the power to transform payroll,” with analytics optimizing performance and potentially developing strategies to minimize risks and seize opportunities.
Industry leaders in payroll solutions
The report also evaluated 26 providers in the Multicountry Managed Payroll Services quadrant, naming ADP, EY, IBM, Mercans, Neeyamo, Ramco Systems, SD Worx, and Strada as leaders.
Additionally, UKG is recognized as a Rising Star for its promising portfolio and potential. EY stood out as the global ISG CX Star Performer for 2024 among payroll solutions providers due to its high customer satisfaction ratings.
As enterprises continue to navigate global standardization challenges while meeting local requirements in an era of remote work, these innovations in payroll services are crucial for maintaining compliance and enhancing operational efficiency.
