New Research Reveals Most Organizations Fail to Make Payroll Strategic, Missing Cost Savings and Employee Satisfaction Opportunities

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 found that companies with more advanced payroll functions are nearly 16 times more likely to have automated payroll to a high or very high degree, over 5 times more likely to keep pace with economic trends, and more than 4 times 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%), and 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The findings suggest that payroll functions are often hindered by outdated systems, budget constraints, and the failure to leverage modern automation and integration tools, leaving HR and payroll departments with limited capacity to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. Brent Skinner, Executive Community Leader of the Future of Payroll and Workforce Management at HR.com, stated that payroll professionals face both necessity and opportunity to become strategic in the eyes of organizational leadership, with success lying in finding modern, innovative solutions for operational, security, and compliance challenges.

The full research report 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 on demand, providing additional insights into transforming payroll operations for contemporary workforce needs.