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Information Services Group (ISG) has released its 2025 ISG Provider Lens® Payroll Managed Services reports, highlighting how enterprises are integrating AI into payroll systems to address complex cross-border employment trends, enhance compliance, and personalize employee experiences, with providers like ADP, Dayforce, and UKG leading in both global and U.S. markets.
The 2025 ISG Provider Lens® reports emphasize AI’s pivotal role in modernizing payroll as enterprises navigate complex global workforces and regulatory landscapes. AI systems are evolving into strategic intelligence layers, automating compliance checks, detecting fraud (e.g., inflated overtime claims), and enabling forecasting and scenario planning. “Payroll is still a business-critical process that needs to be fair, accurate and adaptable,” said Stacey Cadigan, partner at ISG. “Service providers must strike the right balance between automation and human oversight.”
Globally, cross-border employment introduces challenges like diverse taxation, pensions, and allowances, prompting providers to develop multicurrency solutions and AI-driven classification tools. In the U.S., a surge in federal and state laws has heightened compliance demands, with AI tools supporting personalized EWA features to meet employee expectations for early wage access.
Enterprises are shifting toward standalone payroll platforms for greater data control and interoperability, moving away from bundled service contracts. This modular approach enhances agility and long-term vendor relationships, as noted by Rachel Anderson, lead analyst: “Companies are taking a more modular approach to payroll that emphasizes agility, interoperability and data ownership.” Integration with HR, finance, and time-tracking systems underscores AI’s role in ensuring data accuracy, while ethical oversight addresses potential algorithmic biases in pay equity.
The global report names ADP, CloudPay, Dayforce, EY, Mercans, Neeyamo, Ramco Systems, SD Worx, Strada, and UKG as Leaders in Multicountry Managed Payroll Services, with Deel as a Rising Star for its promising portfolio. In the U.S., ADP, Dayforce, isolved, Paychex, Paycom, Strada, and UKG lead, with Paylocity as a Rising Star and isolved earning the ISG CX Star Performer title for top customer satisfaction.
These providers excel in AI-driven automation, compliance, and employee experience enhancements, aligning with trends like EWA pilots globally and robust fraud prevention. ISG’s stock (Nasdaq: III) reflects market confidence, trading at $5.765 on October 7, 2025, up 2.22% from the previous close, with a year-to-date rise from $3.08 in October 2024, per the finance card above.
The reports align with Gartner’s prediction of an agentic AI market correction, where oversupply may lead to consolidation, favoring capital-rich incumbents like ADP or UKG who can acquire specialized firms to enhance offerings. ISG’s findings suggest payroll providers are well-positioned to thrive in this landscape by focusing on domain-specific, AI-enhanced solutions that deliver tangible value, such as those seen in REPAY’s integration with Yooz for AP automation or Semrush’s payment optimizations with Optimized Payments.
For detailed insights and ISG’s recommendations, access the global report and U.S. report on their respective webpages.
ISG (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to over 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services, now leveraging AI to drive operational excellence and growth. Founded in 2006, ISG’s 1,600 professionals provide proprietary market data and expertise to maximize technology investment value.
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