The payroll services industry has evolved significantly with AI, ML, and automation, driving accuracy, compliance, and predictive analytics. Cloud-based solutions have gained prominence, offering scalability, security, and real-time access, meeting the needs of enterprises globally. The continuation of remote and hybrid work has increased demand for global payroll systems that seamlessly integrate localized compliance with cross-border workforce management. Employee satisfaction is a key focus, with self-service portals and mobile access enhancing engagement and transparency. These advancements foster smarter, agile, and employee-centric payroll systems, driving efficiency, cost savings, and compliance. These developments fuel the demand for payroll services that enable enterprises to achieve operational efficiency, cost savings, and regulatory compliance, evidenced by about 18% growth in service providers’ revenue.
Both demand- and supply-side trends are covered in Avasant’s Payroll Business Process Transformation 2024–2025 Market Insights™ and Payroll Business Process Transformation 2024–2025 RadarView™, respectively. These reports present a comprehensive study of payroll business process transformation service providers and closely examine the market leaders, innovators, disruptors, and challengers. They also provide a view into key market trends and developments impacting the payroll services space.
We evaluated 33 service providers across three dimensions: practice maturity, domain ecosystem, and investments and innovation. Of the 33 providers, we recognized 22 that brought the most value to the market during the past 12 months.
The report recognizes service providers in four categories:
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- Leaders: ADP, EY, Mercans, Neeyamo, SD Worx, and Strada
- Innovators: Dayforce, Ramco, Safeguard Global, TCS, UKG, and Wipro
- Disruptors: Deel, IBM, Infosys, TMF Group, and Zalaris
- Challengers: activpayroll, Cloudpay, iiPay, Links International, and OneSource Virtual
Figure 1 below from the full report illustrates these categories:
“Payroll transformation in the digital era goes beyond paychecks, focusing on tech-driven strategic value and employee experience,” said Avasant Partner Shabnum Grewal. “Service providers leverage AI, automation, and cloud platforms to modernize systems, streamline processes, and ensure compliance.”
The reports provide a number of findings, including the following:
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- Generative AI is transforming payroll by automating compliance, streamlining data, and enabling real-time insights for efficiency and personalization, with over 40% of service providers investing in Gen AI use cases related to data management and payroll help desk.
- Global enterprises embrace unified payroll solutions to enhance standardization, operational efficiency, and regional compliance. By addressing local regulations and consolidating systems, enterprises are optimizing payroll management on a global scale.
- Service providers achieved nearly 18% revenue growth between June 2023 and June 2024. Among the top five factors influencing payroll engagements, customized solutions debuted this year, while local expertise and employee experience remain priorities. Large enterprises lead the client base, and there is notable growth in small and very large segments.
“As regulatory demands grow, the need for compliant and scalable payroll solutions is critical,” said Aditya Jain, principal analyst with Avasant. “Enterprises seek systems that handle multi-jurisdictional compliance, enable workforce expansion, centralize operations, reduce errors, and provide real-time insights.”
The Payroll Business Process Transformation 2024–2025 RadarView™ features detailed profiles of 22 service providers, along with their solutions, offerings, and experience in assisting enterprises in their payroll processes.
This Research Byte is a brief overview of Avasant’s Payroll Business Process Transformation 2024–2025 Market Insights™ and Payroll Business Process Transformation 2024–2025 RadarView™ (click for pricing).