New Research: Only 25% of Payroll Programs Are Strategically Advanced

New research from HR.com’s HR Research Institute reveals that most organizations fall short in making payroll a strategic function, leaving opportunities for cost savings and employee satisfaction untapped. According to the findings, only 25% of payroll programs operate at higher strategic levels, with the majority of organizations failing to implement key strategies and automation necessary to streamline payroll operations.

The research report, HR.com’s Future of Payroll 2025, explores the current state of payroll functions across various industries and highlights the critical need for employers to inject more strategy into their payroll processes to ensure better outcomes, both in terms of efficiency and employee satisfaction. As payroll programs advance, organizations with more automated and strategically aligned payroll systems are seeing significant advantages.

The study also found that companies with more advanced payroll functions are:

• Nearly 16X more likely to have automated payroll to a high or very high degree

• Over 5X more likely to keep pace with economic trends

• More than 4X more likely to enhance the employee payroll experience

However, despite these promising findings, the research uncovered significant challenges still facing payroll processes, including:

• Lack of technology integration (43%)

• Cost of payroll technology systems (41%)

• Inconsistent or minimal automation (33%)

The findings suggest that payroll functions are often hindered by outdated systems, budget constraints, and the failure to leverage modern automation and integration tools, leaving HR and payroll departments with limited capacity to manage the increasing complexity of today’s workforce.

“Amid persistent impediments to achieving efficiency and risk mitigation in processing payroll, payroll professionals also face a necessity and opportunity to become strategic in the eyes of organizational leadership,” says Brent Skinner, Executive Community Leader of the Future of Payroll and Workforce Management at HR.com. “The key to their success lies in finding modern, innovative solutions for these challenges in operations, security and compliance even while leveraging their newfound time and mental space to lift themselves out of a purely reactive and process-focused mindset."

The full research report, HR.com’s Future of Payroll 2025, is available for free download and offers a detailed look at strategies to help HR professionals shift toward more strategic payroll management to drive better efficiency, reduce costs, and enhance the employee experience.

The recording of the research webcast presentation, Payroll 2.0: Transforming Strategy for the Modern Workforce, is available for viewing 24/7 on demand.

About HR.com and the HR Research Institute

The HR Research Institute (HRRI) helps you keep your finger on the pulse of HR! Powered by HR.com, the world’s largest HR community, the HRRI identifies key trends and best practices to help more than 2 million HR professionals and their organizations make strategic decisions with informed and insightful research findings. Among the most productive and respected HR research institutes globally, the HRRI publishes dozens of high-quality reports every year across a wide array of HR topics. HR.com’s free membership offers many benefits, including access to over 250 exclusive primary research, state-of-the-industry reports, and infographics. These resources are published based on surveys developed with the assistance of a panel of thought leaders and industry experts on the advisory boards. Visit hr.com/hrresearchinstitute to maximize your HR potential.

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