HR leaders are increasingly pairing payroll metrics with workforce planning to identify capacity issues, challenge internal assumptions, and drive business growth.

By Simon Kent

Technology has made the act of paying people in an organisation easier, more accurate, and more efficient. No matter the size of a business, its complexities, geographical spread, or sector, there’s sure to be a software solution that can take care of the process, reducing time and increasing compliance. But can payroll go further, and can it deliver more for HR, becoming a more strategic force that informs and guides the business?

“There is a willingness to combine payroll data analysis with wider HR and finance data,” says Anne Guerin Moens, HR director at Netherlands-based SBM Offshore, producers of floating oil and gas production systems.

According to Moens, payroll can provide valuable insights which help guide decisions around staffing models, localisation strategies, and long‑term workforce planning. “This integrated approach allows HR to contribute more effectively to business planning while maintaining strong compliance and governance standards,” she says.

Moens admits payroll management itself is still viewed as a transactional activity but adds that there is now a real opportunity for payroll data to contribute to HR and financial insights. She offers the example of analysing trends in overtime pay to help identify structural capacity issues and therefore promote more strategic workforce planning.

However, there is also value for the business in other aspects of payroll. The company’s reward structure, for example, from the grading system up to performance management and retention vehicles, carries highly important information for HR, as it can feed directly into how the workforce should be structured, deployed, and supported. “It is the whole employee life cycle from competitive reward to proper talent management and employee experience that allows us to move beyond reporting and towards true workforce analytics and strategic support to the business,” says Moens.

Anastasiia Dobrovolskaia, chief people and operations officer at 3Commas, a Cypriat crypto-trading solution, agrees payroll has a critical role to play in workforce planning, impacting attraction and retention. “With transparent and well-structured payroll data, I can effectively manage key processes such as motivation, both short- and long-term, total rewards, and HR compliance,” she says. “That said, while many organisations recognise its importance, I don’t think HR is always fully leveraging the potential of this data, especially when it comes to integrating it into broader strategic decision-making.”

3Commas runs an annual salary review process that analyses areas such as where an employee sits within their salary range for their grade, the difference between planned and actual earnings—important for roles with variable compensation, such as sales or support—and how total compensation compares to market benchmarks in the relevant region, industry, and job family.

“Having this data allows me to propose more conservative or more ambitious budget scenarios for salary reviews,” says Dobrovolskaia. “I can model different outcomes, define budget ranges, and set clear rules for each review cycle.”

Tobias Julén, Stockholm-based chief HR officer of Stillfront Group and former chief people officer of Tanium, asserts that the most valuable use of payroll data is to challenge assumptions. “Organisations often believe they reward performance, retain key talent, or maintain internal fairness,” he says. “Payroll data is where you can test whether that is actually true.”

Such data will, for example, show if high performers are really being differentiated in terms of pay and how compensation evolves across different parts of the organisation. Payroll can effectively highlight inconsistencies which may be compromising the performance of individuals and the business in general.

“It also changes the conversation with business leaders,” Julén adds. “Instead of discussing frameworks or policies, you can have a fact-based discussion about where money is being spent, and whether it aligns with business priorities. That is what allows HR to move to be a strategic partner.”

Mathew Akrigg of the UK-based Chartered Institute of Payroll Professionals (CIPP) points out that payroll is one of the biggest costs for an organisation and should therefore be carefully monitored and considered. “You need to keep an eye on where you’re spending your money,” he says, “and that needs to stay in line with your business strategy.”

In recent years, Akrigg says he’s seen a shift in payroll’s status with it taking a higher-profile seat at the table, able to impact business decisions. “Pay professionals are beginning to be seen as essential to how things need to be run,” he says. “You need lawyers to focus on employment law, tax accountants and so on, but you still need someone in payroll with a broad understanding of how it all works together.”

As for the future, while AI is certainly in the cards, Akrigg says the general view is to encourage companies to think about the problems they are facing and then see if an AI solution will help rather than deploying the new technology for its own sake. “Payroll is not going to get any less complicated,” he adds, “so you’re always going to need this kind of knowledge.”

Moens agrees AI will have a greater role to play in enhancing how payroll data is validated, analysed, and used. She characterises the way forward as an evolution rather than a revolution. “As digital tools and automation increasingly handle transactional and compliance‑driven tasks, payroll professionals are well‑positioned to take on a more strategic role,” she says. “We see payroll expertise evolving towards data interpretation, risk management, cross‑border complexity, and advisory support to HR and finance. In global organisations, this shift is particularly valuable.”

“Technology will reduce administrative burden and increase efficiency, but that alone will not change the role of payroll. To become strategic, payroll needs to move closer to business decision making, using data to help answer critical business questions. AI will help, but better tools are not enough. It requires a changed mindset and a closer integration with business leaders.”

So while payroll information can certainly enhance the work of HR, there’s a chance that closer collaboration between the two could enhance the profile and role of both within organisations.

Julén agrees that payroll could become more strategic for businesses, but he believes that this will require deliberate action rather than being a natural progression. “Technology will reduce administrative burden and increase efficiency, but that alone will not change the role of payroll,” he says. “To become strategic, payroll needs to move closer to business decision making, using data to help answer critical business questions. AI will help, but better tools are not enough. It requires a changed mindset and a closer integration with business leaders.”

Strategy is certainly the key to enhancing payroll’s contribution. Dobrovolskaia sees the traditional payroll function gradually replaced by technology but says that more focused roles such as those in compensation and benefits will remain—and will continue to be critically important for businesses. “It plays a central role in shaping a company’s value proposition, compensation philosophy, resource planning, and the design of effective incentive systems,” she says. “Improved data collection and tracking will only strengthen this function, enabling more precise, data-driven, and higher-quality decision-making.”