07 August 2025

It’s been a whirlwind five years for payroll. Political and socio-economic challenges and changes have put a lot of pressure on payroll functions around the world. Yet this pressure has also heightened the role and prominence of payroll in organisations.

The changes leave behind challenges. Tactical responses and workarounds to meet new asks of payroll have, for many, left a fragmented landscape. Among the issues:

  • technology that doesn't integrate well, if at all
  • a lack of clarity around roles where new demands have fallen on payroll
  • reporting that's manually cobbled together from multiple data sources
  • payroll functions with inconsistent operating models as well as business units or geographical locations operating differently

This lack of standardisation and consistency breeds significant risk.

Changing Expectations in Payroll

Payroll has, and always will have the primary goal of paying people accurately and on time. The issue with this is that businesses can have low expectations of payroll as a result. As long as it’s happening, what’s the problem?

We, as payroll practitioners, have a role to play here in ensuring businesses recognise the added value payroll can bring to an organisation. It isn’t a case of removing the primary role of payroll, it’s about optimising the way it’s managed to give space and focus on adding value to the business.

Being 'Strategic'

There are a lot of ways payroll can add value. As much as the loosely used term ‘strategic’ is misused and misplaced, it carries a significant value-add opportunity for payroll. We are the one place that all of an organisation’s employee data is held. It must be accurate, there’s simply no safety net past payroll. That data tells a story, not only in defining the current state, cost and employee count, but also in identifying trends.

If used in the right way, the data payroll holds can highlight potential issues with capacity throughout the business, highlight trends where there may be upcoming issues around employee satisfaction or wellbeing and even compare the efficiency of business units or locations.

We hold all this data. The challenge is often not having the capacity to do anything other than reactive and ad-hoc analysis with it. Being strategic is about turning that around, ensuring our operations are efficient and optimised enough that the day job takes care of itself, and we can be ahead of what the data is able to tell us.

It’s about being an advisor to the business rather than a conveyor of something that’s happened.

Payroll's Operational Foundations

As payroll professionals we all have this opportunity, but it’s not something that can be achieved overnight. The starting point must be the foundations and ensuring the function is operating as efficiently as possible. So how much effort are you putting into:

  • working around system or integration limitations?
  • fighting fires without the capacity to address the root causes?
  • disputing with up or downstream functions whose role it is to do something?

Another common challenge is change. Payroll is required in almost every change initiative that impacts employees. Do you have capacity to support this properly or are you trying to balance it off the side of your desk and not able to support in a way which could ensure change is delivered seamlessly?

This is over-simplifying it somewhat, but if these things didn’t happen, or at least were exceptional, this time could immediately be repurposed to support the business and employees.

The Evolution of the Profession

I accept I’m not the longest serving payroll professional, but at almost 25 years even in my time I’ve seen a huge shift in the role payroll does and can play. The days of sitting next to a pile of timesheets or manually referencing a textbook to work something out may not be completely behind us, but they’re rare now.

In theory, everything can and should happen out of sight. Payroll, in many organisations, now focusses as much on:

  • employee experience
  • meeting the changing demands of the workforce
  • offering more rounded support to employees as humans

Financial wellbeing initiatives and coaching offer employees support which helps build trust in their employer. Payroll having more prominence in engagement with employees helps them feel cared for, giving clarity in something that’s complex even for payroll professionals.

Payroll and Employee Experience

I’m often asked how much of a role payroll can really play in employee experience and I try to keep it simple. What do employees work for? It’s true not everyone is the same and of course there’s a minority who don’t work for their payslip, but a variety of recent studies have shown anywhere between 50% and 70% of employees work primarily for their payslip, and as many as 30% admit they work solely for it.

As part of this evolution, I’ve often wondered whether it’s time to change the name of the function. The word ‘payroll’ comes from ancient times and suggests a responsibility solely for a roll (or schedule) of payments. I think it’s time we rebranded in the same way ‘human resources’ has largely shifted to ‘people’ to highlight their focus on employees as people rather than resources. It’s a process we can collectively generate ideas on and discuss.

Investment in Payroll

With up to 70% of people working primarily for their payslip, something important is highlighted. For most employees, payroll is the bridge between them and their employer, and their satisfaction is directly linked to how well payroll is done.

This could suggest that investment in shiny tools, breakout spaces, subsidising lunches, free coffee, hybrid working and the like, while all clearly helpful and important, don’t carry the same weight as doing payroll the best you can. If you’ve not invested in payroll, up to 70% of your workforce are at risk of being dissatisfied. That’s quite important, right?

And as mentioned, if payroll is accurate and on time, a lot of organisations don’t even think about it. So how do we get them to listen? Is there any return on investment?

Making the Business Case

Financial business cases have always been a struggle in payroll. As a function which doesn’t strictly make the organisation money, changing something with low or no return on investment financially has been a tough sell. This is why we need to think differently.

In many cases there may be a financial return whether direct or indirect. In extreme cases, the cost of re-runs, penalties, impact of strikes, overtime costs and fines can make a business case a no brainer.

It’s also important to focus on the wider role that payroll can be playing. If the organisation is struggling with employee satisfaction or wellbeing, highlight how enhancing payroll will improve that. If data is always hard to come by or frequently inaccurate, highlight how this can be owned and improved with improved payroll. And importantly, consider the changing expectations of the workforce.

We live in a very different world now, even compared to 2018, and that isn’t going to change. It makes sense to have the capacity to listen and be ahead of employee expectations of how they interact with their pay.

Looking Ahead

Payroll has been and still is on a bumpy road, but with the challenges come significant opportunities – not just to do things better, but to do different things and enhance the role of the industry.

There’s no magic wand though, it’s a long process and it starts with understanding where you could be, and where you want to be. Get the foundations in place from there and the world is payroll’s oyster.

Understand your organisation’s issues, opportunities and its story. What could be improved to support the business and employees? Pick up the phone to your Chief Product Officer or Chief Financial Officer. Chances are, they’ll be surprised when they hear about the role payroll is able to play.

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