Market Perspectives

ISG Research is happy to share insights gleaned from our latest Buyers Guide, an assessment of how well software providers’ offerings meet buyers’ requirements. The Multicountry Payroll: ISG Research Buyers Guide is the distillation of a year of market and product research by ISG Research. In the ever-changing world of enterprise operations, payroll is a critical function that sits at the intersection of HR, finance and compliance. To say that payroll is complex is an understatement. Beyond ensuring accurate and timely payments to workers, payroll leaders must navigate a maze of regulatory requirements that vary by location, creating significant challenges. Payroll, therefore, becomes more than a routine process; it plays a pivotal role in minimizing risk, driving operational efficiency and enhancing the employee experience. Payroll technology has evolved in response to new business models, a rapidly expanding remote workforce and the increasing demand for real-time, automated software. As digital transformation in the workplace accelerates, enterprises are under pressure to adopt payroll systems that keep pace with regulatory changes and also align with broader HR and organizational strategies. ISG Research defines multicountry payroll as the management of worker compensation across multiple countries, requiring a unified approach that balances standardization with adherence to local compliance requirements. Each country’s unique payroll regulations, tax structures and employee benefits present challenges that demand flexible yet consistent processes. Multicountry payroll systems provide a centralized platform capable of addressing local variations while delivering standardized reporting and analytics across regions. Automation plays a critical role in reducing manual intervention, minimizing errors and ensuring compliance, enabling payroll teams to efficiently manage diverse payroll operations on a global scale. Keeping pace with regulatory changes—whether related to payroll taxes, overtime rules or benefits contributions—presents a major challenge, as failing to stay compliant can result in financial penalties, legal risks and damage to an organization’s reputation. Additionally, many enterprises are forced to manage payroll processes with limited resources, often requiring payroll teams to do more with less. This challenge is particularly pronounced for organizations that operate across borders or in multiple regions, where local expertise is necessary to ensure accuracy and compliance. By 2027, the need for managing payroll globally will require software providers to have a unified offering for enterprises. Data accuracy is of the highest importance when examining the topic of payroll. Payroll data must be precise not only for the sake of timely payments but also to meet compliance obligations. Errors in payroll calculations can lead to discrepancies that frustrate workers and may even attract regulatory scrutiny. While many organizations have turned to automation to help address these issues, the complexity of managing large-scale payroll operations means that technology alone is not always sufficient. Human oversight, thorough audits and continuous process improvements are often necessary to ensure payroll data accuracy. Remote workforce strategies have introduced additional payroll concerns for many organizations. The shift to remote work, accelerated by global events, has created new layers of complexity. Payroll teams must now account for employees working in different locations, sometimes across state or national borders, which brings up questions of tax withholding, jurisdictional payroll laws and the classification of remote workers or contractors. For many organizations, existing payroll systems are not designed to handle the nuances of remote work, requiring rapid adjustments to accommodate this new reality. Several key trends have emerged in payroll, driven by the demand for more dynamic, real-time solutions. The demand for automation continues to grow as enterprises look for ways to streamline payroll processes, reduce manual interventions and improve overall efficiency. Automated systems that handle everything from tax calculations to compliance reporting are essential for organizations looking to scale payroll operations. While automation reduces errors and frees up valuable human resources, it also requires a payroll system that integrates seamlessly with other enterprise software, such as human capital management systems and time and attendance tools. Another key trend is the increasing use of artificial intelligence and machine learning in payroll. Maximizing these technologies can detect anomalies in payroll data, ensure compliance with local laws and even forecast payroll expenses based on historical data. AI-driven software helps organizations reduce errors and mitigate compliance risks by identifying potential issues before they become critical problems. However, while AI offers promising systems, it’s important to recognize that these technologies are still evolving, and enterprises must balance innovation with practical concerns about specific operational needs. The role of payroll within the enterprise is also shifting. HR’s influence on payroll has grown as payroll increasingly intersects with broader HR functions such as employee experience, benefits administration and workforce planning. This shift highlights the need for payroll systems that integrate seamlessly with other HR technologies, providing a more holistic view of the employee life cycle. Innovations in payroll technology are transforming how large enterprises manage this critical function. One of the most significant developments is the rise of cloud-based payroll software, which offers scalability, flexibility, and enhanced security compared to traditional on-premises systems. Cloud-based platforms enable organizations to manage payroll operations from anywhere in the world, providing real-time updates and ensuring that payroll teams stay on top of regulatory changes without delay. These platforms allow for greater collaboration between payroll, HR, and finance teams, ensuring that payroll processes align with broader business goals. Another important innovation impacting payroll software is continuous payroll (or real-time payroll) which enables on-demand wage access. Real-time payroll allows workers to view and access their earned wages in real-time rather than waiting for the traditional pay period to end. This feature has become increasingly popular among employees who seek greater control over their finances and has proven to be a valuable tool for employee retention in industries with high turnover rates. Offering on-demand wage access requires an agile and responsive payroll system capable of processing real-time wage requests without compromising accuracy or compliance. AI-driven compliance is also transforming how enterprises navigate the complex web of tax laws and labor regulations. AI-powered payroll systems analyze local labor laws, apply them to payroll calculations and ensure organizations remain compliant across multiple jurisdictions. These systems reduce the risk of human error and streamline the compliance process, freeing up payroll teams to focus on more strategic tasks. However, while AI and automation offer new tools for compliance, many organizations are still grappling with the challenges of adapting legacy systems to these contemporary applications. Despite these technological advances, many enterprises are missing opportunities to maximize payroll systems for more than just processing payments. Payroll as a communication tool is often overlooked, yet it provides a unique touchpoint between the organization and its workers. Enterprises can use payroll to communicate important updates, share benefits information or highlight key company initiatives. By integrating communication into payroll, enterprises engage workers in more meaningful ways, fostering a stronger connection between the workforce and the organization. Through 2026, one-quarter of enterprises will look to have a secured conversational and GenAI experience for employees to understand and learn more about the pay and benefits provided by the employer. As payroll technology continues to evolve, the role of payroll within large enterprises is transforming. Once considered a back-office, transactional function, payroll is increasingly seen as a strategic pillar that impacts employee satisfaction, operational efficiency and compliance. Payroll teams collaborate more closely with HR and finance departments, ensuring that payroll processes align with broader organizational goals. This shift underscores the importance of adopting contemporary payroll applications that integrate with other enterprise systems, providing a more holistic view of workforce management. Enterprises that fail to update payroll operations risk falling behind in an increasingly competitive landscape. Embracing cloud-based platforms, real-time payroll, AI-driven compliance and innovative communication tools helps organizations streamline payroll processes and enable better business outcomes. Payroll systems of the future must be agile, adaptable and deeply integrated with other HR and business technologies to meet the needs of a dynamic and evolving workforce. In an era where payroll is rapidly evolving from a back-office function to a strategic asset, the need for current, integrated and scalable payroll systems has never been greater. As enterprises face increasing complexity, shifting regulations and evolving worker expectations, it is essential to rethink how payroll systems can better serve the business and its workforce. Whether addressing compliance challenges, capitalizing on automation or seeking to enhance worker engagement, the next step in the payroll journey is to embrace innovation. Enterprises can transform payroll into a tool for operational efficiency and worker satisfaction by evaluating current processes; exploring new technologies like AI, real-time payroll or cloud-based platforms; and ensuring alignment with broader HR strategies. The future of payroll is not just about processing payments—it’s about creating a more agile, compliant and worker-centered function that supports the long-term success of the organization. Now is the time to take the next step and make payroll a driving force for positive change. The ISG Buyers Guide™ for Multicountry Payroll evaluates software providers and products in key areas intended to explore all aspects of payroll technology, including core payroll capabilities, multicountry payroll capabilities, IT capabilities, manager capabilities, payroll administration capabilities, payroll analytics, payroll strategies and process needs, integrations and overall support for worker pay needs. This research evaluates the following software providers that offer products to address key elements of multicountry payroll as we define it: ADP, Darwinbox, Dayforce, Deel, Infor, Neeyamo, Oracle, Oyster, Papaya Global, Paylocity, SAP, UKG and Workday. This research-based index evaluates the full business and information technology value of multicountry payroll software offerings. We encourage you to learn more about our Buyers Guide and its effectiveness as a provider selection and RFI/RFP tool. We urge organizations to do a thorough job of evaluating multicountry payroll offerings in this Buyers Guide as both the results of our in-depth analysis of these software providers and as an evaluation methodology. The Buyers Guide can be used to evaluate existing suppliers, plus provides evaluation criteria for new projects. Using it can shorten the cycle time for an RFP and the definition of an RFI. The Buyers Guide for Multicountry Payroll in 2024 finds ADP first on the list, followed by Oracle and UKG. Software providers that rated in the top three of any category ﹘ including the product and customer experience dimensions ﹘ earn the designation of Leader. The Leaders in Product Experience are: Oracle. ADP. UKG. The Leaders in Customer Experience are: ADP. Oracle. UKG. The Leaders across any of the seven categories are: ADP, which has achieved this rating in seven of the seven categories. Oracle in six categories. UKG in four categories. SAP in two categories. Dayforce and Workday in one category. The overall performance chart provides a visual representation of how providers rate across product and customer experience. Software providers with products scoring higher in a weighted rating of the five product experience categories place farther to the right. The combination of ratings for the two customer experience categories determines their placement on the vertical axis. As a result, providers that place closer to the upper-right are “exemplary” and rated higher than those closer to the lower-left and identified as providers of “merit.” Software providers that excelled at customer experience over product experience have an “assurance” rating, and those excelling instead in product experience have an “innovative” rating. Note that close provider scores should not be taken to imply that the packages evaluated are functionally identical or equally well-suited for use by every enterprise or process. Although there is a high degree of commonality in how organizations handle multicountry payroll, there are many idiosyncrasies and differences that can make one provider’s offering a better fit than another. ISG Research has made every effort to encompass in this Buyers Guide the overall product and customer experience from our multicountry payroll blueprint, which we believe reflects what a well-crafted RFP should contain. Even so, there may be additional areas that affect which software provider and products best fit an enterprise’s particular requirements. Therefore, while this research is complete as it stands, utilizing it in your own organizational context is critical to ensure that products deliver the highest level of support for your projects. You can find more details on our community as well as on our expertise in the research for this Buyers Guide.

ISG Buyers Guide for Multicountry Payroll Classifies and Rates Software Providers

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