ADP’s The Potential of Payroll in 2026: Global Payroll Survey gathers insights from 1,816 senior payroll leaders across 20 countries, all working in organisations with more than 1,000 employees, with over 80% operating at the senior vice president or board level. The research reflects a payroll environment under pressure, but also one that is modernising rapidly and rising to the strategic level.
Payroll's Strategic Skills and Capability Development
The 2026 survey indicates a clear rise in payroll as a strategic function. A total of 43% of respondents now work within dedicated payroll functions, marking a significant shift from its traditional position under Finance (and less so under Shared Services or HR).
Skills shortages remain widespread, with 68% reporting that their payroll service has been impacted by staffing shortages and 64% finding it difficult to acquire skills externally. This means that developing the existing talent pool, whether already working in the global payroll function or not, becomes a key priority. Leaders also report increasing demand for specific expertise:
- 38% require deeper compliance knowledge
- 37% desire enhanced data security skills
- 37% want greater analytical abilities
- 35% aim for stronger payroll processing capacity
- 34% seek more IT capabilities
Teams are also rethinking how work is delivered: a total of 72% are assessing ways to manage payroll with fewer staff. Among these organisations, 44% are exploring artificial intelligence (AI) to support workload reduction and automate manual tasks. This indicates a more confident shift than in 2025, when AI was still considered emerging rather than fully integrated.
As payroll becomes more strategic and skills and capabilities become essential, this highlights the increasing need for ongoing professional development. This is an area where, as the industry leader in payroll education, PayrollOrg's (PAYO) educational programmes remain a vital resource for payroll leaders developing future skills.
Other Key Insights for Global Payroll Leaders
The survey highlights several additional trends shaping global payroll, each pointing to a function that is modernising at different speeds across technology, compliance, data, and employee experience:
- AI adoption and automation are accelerating, with 35% using AI for tasks like data entry or error detection, and up to 40% implementing AI for compliance, monitoring, and chatbots. 29% see AI as a key payroll driver.
- Cybersecurity threats are rising, with 70% reporting payroll-impacting incidents in the past two years, up from 57% in 2025. Only 41% have a full company contingency plan, though 49% have plans for some countries.
- Compliance remains a major pressure point, with 75% finding local regulations challenging, 68% incurring penalties annually, and 69% overpaying employees to avoid noncompliance. These figures show increased regulatory stress since 2025.
- Integration is fragmented, with only 26% to 30% of organisations fully integrated with core global systems, and 32% to 36% partially integrated. However, 77% see value in a unified HR, payroll, and time solution. Up to 43% cite software complexity as a major barrier.
- Global reporting and visibility are limited. Only 12% have comprehensive global and regional reports, 31% lack any, and 49% depend solely on country-level data. Many leaders want teams to focus more on data analysis to bridge these gaps.
- Employee experience stays a priority, with accuracy, communication, and pay access crucial. About a third of companies aim to boost pay transparency and equality in the next two to three years.
Together, these findings demonstrate a profession that is strengthening its technical foundations while continuing to face long-standing challenges in compliance, data quality, and system maturity.
Key Takeaways
The future strength of payroll depends on people. The 2026 survey shows that technical change only adds value when payroll teams have the skills, confidence, and capability to use it effectively. Organisations should focus on creating structured development pathways to close gaps in compliance, analytics, technology, and data security, and to ready teams for the growing strategic roles now expected of payroll.
Leaders should align skills development with transformation plans, ensuring staff receive support as AI, automation, and integration spread across the function. Professional education, targeted upskilling, and transparent career paths are vital for attracting talent, reducing risks, and building resilient global payroll organisations.
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Max van der Klis-Busink, MCIPP, RPP, is the Owner of Passion For Payroll and Vice President of Global Strategy on PayrollOrg’s Board of Directors.
