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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
