The traditional split between HR systems and payroll engines is narrowing. Two recent announcements highlight how human capital management (HCM) providers are investing in payroll delivery, rather than leaving it to third-party specialists.
Shift in the HCM-Payroll Landscape
HiBob, long known for its mid-market HCM platform, has launched a native U.S. payroll engine that promises to streamline compliance and reduce errors by eliminating the reliance on external integrations. Meanwhile, Workday has expanded its native payroll in the United Kingdom to Ireland, strengthening its offering alongside existing native payroll capabilities in the U.S., Canada, France, and Australia.
Both announcements underscore a trend: HCM providers are positioning payroll not just as an integration point, but as a core component of HR’s tech stack.
Connecting to Survey Insights
PayrollOrg’s 2025 Getting the World Paid Survey shows why this shift matters. Despite widespread adoption of global HCMs (86% of respondents use one as the system of record, but they are solely U.S.-focused), integration remains a major pain point. Among the top causes of decreased payroll accuracy are:
- Poor quality of data inputs
- Interface and integration errors
- Lack of integration between data sources and payroll
At the same time, just 52% of organisations say they process payroll in one system, and most of those only manage 1 – 5 countries. The reality for global employers is still a hybrid model of multiple providers, engines, and service levels. Native payroll within HCM platforms directly targets these challenges. By removing layers of third-party connections, HCM vendors argue they can improve accuracy, simplify compliance, and give organisations the “one system” experience they have long been promised.
What It Means for Payroll Strategy
The strategic question for global payroll leaders is whether HCM-native payroll can deliver on that promise at scale. While the benefits of tighter integration are clear, global organisations may continue to need hybrid operating models for years to come, particularly in long-tail countries where native payroll engines within the HCM are not yet available. For payroll leaders, the consideration is twofold:
- Short term. Evaluate whether adopting HCM-native payroll in core, usually higher headcount markets, can reduce data errors and increase efficiency.
- Long term. Press vendors on their roadmaps, ensuring coverage extends beyond major economies to support global strategies, whether through native engines or (certified) connections.
As providers like HiBob, Workday, and others push deeper into payroll, the line between HCM and payroll from a tech stack perspective is blurring. For organisations, the challenge (and opportunity) lies in deciding when “one system” really is enough, and when a hybrid strategy remains the only pragmatic path.
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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.
