512%
ROI on cloud data warehouse*
90%
reduction in AI data prep time
36.5K
est. work hours saved annually
In recent years, HR software leader Paycor has developed a best-in-class cloud data foundation alongside Informatica and Snowflake on Microsoft Azure. Now, as the company embraces AI for workforce insights, trusted data delivers new solutions to SMBs faster than competitors.
"We believe AI will fundamentally transform how companies manage and develop their workforces. Our vision is to embed AI and proactive insights into every aspect of employee lifecycle management, from recruiting and onboarding to payroll and performance management.”
The journey to AI-powered workforce insights
As a leading provider of HR software for over three decades, Paycor knows about transformation. The company’s simple, all-in-one platform has empowered leaders and HR teams at over 40,000 small and medium-sized businesses (SMBs) to navigate massive technology shifts, from the rise of mobile devices to remote workforce management. Now, Paycor is embracing another game-changer: artificial intelligence (AI).
"We believe AI will fundamentally transform how companies manage and develop their workforces," says Christopher Eldredge, Vice President of Paycor's Data Office, a mission-critical job that oversees everything from billing and CRM data management to executive reporting. "Our vision is to embed AI and proactive insights into every aspect of employee lifecycle management, from recruiting and onboarding to payroll and performance management.”
Over the past year alone, Paycor has launched more than 20 AI initiatives including chatbots, copilots, virtual assistants and machine-learning algorithms. The HR tech leader is betting on large language models (LLMs) to help internal teams automate and lower costs and support external, AI-powered product lines to drive customer growth.
The lynchpin to Paycor's ambitious AI strategy? A modern, AI-powered approach to data management – so even lean engineering teams can scale with ease.
“Informatica was our platform of choice, because they already knew how to wrangle data from all these different systems into one cloud data warehouse. The flexibility of the Informatica Intelligent Data Management Cloud (IDMC) helps us quickly get data into Snowflake and we don’t need a bunch of unique skill sets or a wide variety of people.”
Embracing the power of a comprehensive data platform
When Eldredge joined Paycor in 2019, he faced a challenge common to many fast-growing technology companies: data fragmentation. “Each department had its own idea of what data should be and how to define and label it,” Eldredge recalls. “There was no data warehouse or integration platform to bring it all together and make it easy to understand metrics across the organization.”
He decided to bring teams together by embracing the power of a comprehensive data platform, hashing out agreements and differences and explaining the need for certified data workflows. A common data foundation would cleanse, organize and vet data before making it available to business users through a series of data marts and APIs. And it would need to support enterprise data from billing, customer relationship management (CRM) and finance systems, as well as product data for customer-facing tools and applications.
The answer was a multi-tenant cloud data warehouse, built in partnership with Informatica and Snowflake. For fast and accurate data pipelines, the team tapped Informatica Cloud Data Integration, benefitting from its 600+ no-code cloud connectors and AI-powered data quality to accelerate safe migrations.
“Informatica was our platform of choice because they already knew how to wrangle data from all these different systems into one cloud data warehouse," notes Eldredge. “The flexibility of the Intelligent Data Management Cloud helps us quickly get data into Snowflake and we don’t need a bunch of unique skill sets or a wide variety of people. It can be a lean team because the automation and AI makes it easy for each member to manage lots of data pipelines at once.”
Shortly after the new data architecture went live in early 2020, the shock of the Covid-19 pandemic required Paycor to pivot yet again. Eldredge and his team had to spin up faster reporting cycles and satisfy a growing number of unique data requests to help internal teams and customers navigate an uncertain landscape.
“The pandemic forced us to quickly change from monthly to daily reporting for a variety of business needs,” says Eldredge. “Thanks to our single source of truth and cloud connectors, we met and exceeded these requests. Within a week, Informatica helped us create a live dashboard tracking over 50 business health metrics, from customer gain/loss to in-office attendance.”
Paycor completed its cloud migration in under a year establishing ready access to trusted, reliable data that accelerates time to value and builds confidence in the possibilities of AI-powered growth.
Paycor’s data landscape and reference architecture
Empowering engineers with trusted, accessible data for AI
With its new data foundation in place, Paycor ramped up its digital and cloud transformations. When the company went public in 2021, auditors praised the speed and accuracy of its S-1 reporting. As leadership increased investment into data science, Eldredge helped establish Paycor’s first Data Office, overseeing data warehouse, data management and data science, as well as all reporting for executives, customers and data-sharing partners.
The company’s first predictive models evaluated Customer Lifetime Value (CLV) across channels and demographics, giving sales and marketing teams insights to efficiently grow high-value accounts. Eldredge notes, “Since we had all the appropriate data sources, data lakes and data marts that enabled us to look at all these dimensions, we could come together and quickly get alignment on the best way to calculate key metrics.”
To support the growing focus on AI and LLMs, Eldredge and his team needed to develop a new governance framework to manage the explosion in unstructured data and help AI projects move faster while mitigating risk.
“All of our AI projects are self-sourcing and most of the stakeholders are not data people, but business or applications teams trying to implement these technologies,” explains Eldredge. “People want to move faster with AI and it helps to have staged information ready for them in a consistent way. With Informatica, our engineers spend 90% less time wrangling data and more time building great product features and training high-quality AI models."
Informatica IDMC and its advanced AI-powered metadata engine, CLAIRE®, help teams to automate tasks and fill gaps across the data management lifecycle, from engineering and integration to quality and governance. Teams can now take smarter, next-best actions on data and AI projects. Moreover, high-quality data is fundamental to achieving reliable results from AI. With Cloud Data Quality and Cloud Data Governance and Catalog, Paycor enables transparency into technical lineage and data definitions related to AI models to improve explainability. This includes user-friendly resources such as quality scorecards and business glossaries to help users understand what data is available and how to begin using it.
Paycor's Data and AI Journey
A 500%+ return on investment that keeps growing
While any cloud migration requires an investment, Paycor’s journey also unlocked a substantial reduction in IT overhead as an upside. The HR leader retired multiple existing data vendors and homegrown systems, saving nearly $400,000 in direct annual support costs. The team also saw significant indirect savings, including an estimated 36,500 analyst work hours, which could now be dedicated to more strategic work.
All these benefits equated to a 512% return on its investment in their cloud data warehouse – in less than two and a half months – according to an independent study by Nucleus Research.
The business ROI of fit-for-purpose, trusted data goes beyond cost savings, it's become a competitive differentiator. Paycor now can bring AI-powered applications to market more quickly with trust assurance and cut the time of data management tasks down from days or weeks to mere hours.
"Our ability to rapidly ingest, integrate and feed high-quality data into our AI and analytics initiatives gives us a meaningful edge in the market," Eldridge says. "We can pivot faster than our competitors to deliver the intelligent workforce features our customers need. And that advantage compounds with every new AI project we take on."
With a modern data management platform powered by AI, Paycor is dreaming bigger than ever about how to create value. As more teams harness data and AI to grow the business, Paycor generates more data to fuel even better insights and products without compromising on data trust and responsible AI outcomes. It’s a flywheel effect and the team is just getting started.
“Paycor continues to have aggressive growth and profitability goals,” says Eldredge. “Our partnerships with Informatica and Snowflake are both growing as Paycor grows and it’s great to know that they’ll be able to scale and support our needs today and in the future.”
* Business outcomes based on third-party Nucleus Research report published May 2023.
