This first report draws on a survey of 205 C-suite executives, senior leaders and payroll decision-makers across the UK, Ireland, Denmark, Finland, Norway and Sweden, conducted in May 2026. Here's what we found.
Payroll only gets attention when something goes wrong
That’s what 58% of the senior leaders we surveyed told us.
And when payroll does go wrong, the consequences aren't contained: moving across finance, HR, legal and leadership at the same time. In our report, 38% of respondents reported finance or audit complications as a result of payroll errors. 35% experienced late pay. 28% saw a measurable loss of employee trust or morale.
"Make a mistake on one payroll, and you need about six perfect payrolls before people fully trust the process again."
Erik Bekkåsen, Director of HR & Payroll Services, Nordic, Azets
This matters because 69% of leaders in our research say payroll errors can damage an organisation's reputation as significantly as a tax investigation or audit scandal. That's a significant consequence for a function most organisations say they underinvest in.
Strategic intent and operational reality aren't the same thing
61% of leaders describe payroll as a strategic priority and most have reviewed their setup within the last three years. On the surface, that sounds promising.
However, there’s a gap between what leaders say and what's actually in place. Regulatory complexity is the top challenge of the past 12 months, cited by 37% of respondents in our report. When asked how prepared they are for specific requirements:
- Only 31% say they're fully prepared for the EU Pay Transparency Directive
- Only 23% are fully prepared for managing remote and cross-border working compliance
- Only 22% are fully prepared for ESG governance data submission
The environment is changing faster than most payroll functions are set up to keep pace with.
The people behind payroll are under pressure too
The workforce payroll must serve is growing more complex. The talent pool available to manage that complexity is shrinking.
Just 5% of organisations say they have a stable payroll team with no significant recruitment or retention challenges. The most common barrier, cited by 47%, is difficulty finding candidates with the right specialist expertise.
"There's a myth around payroll that it's just pushing a button, anybody can do it. It takes years to train somebody. To be a payroll person today, it's not just about knowledge — empathy plays a very big part of it."
Stephen Abbotts, Director of Payroll Services, UK, Azets
Payroll requires knowledge of employment law, tax codes, benefit structures, data systems and, increasingly, cross-border compliance. Organisations that treat it as an administrative function and resource it accordingly are taking on more risk than they may realise.
AI is accelerating. Human oversight isn't going anywhere.
Eight in ten organisations are already using or actively adopting AI and automation in payroll. The direction of travel is clear. But when asked whether they'd trust AI to run payroll without human oversight, only 39% said they'd be fully comfortable with that.
That's a practical position, not a resistance to technology. Automation handles volume well. It validates inputs, flags anomalies and speeds up reconciliation. The opportunity is using it to free up expert time for the work that genuinely adds value, such as compliance monitoring, workforce cost modelling, data-led planning.
The organisations making the most of automation aren't using it to replace people. They're using it to change what their people spend time on. Less correcting errors. More analysing the data that payroll generates and turning it into something useful for the business.
Most organisations haven't reached that point yet. The data is there, but the practice of using it strategically isn't always.
What the best payroll functions have in common
The organisations getting this right treat payroll as a professional discipline. They invest in the people running it, connect it properly to their HR and finance systems, and use the data it generates to inform decisions — on workforce planning, reward strategy, ESG reporting and turnover risk.
Payroll is one of the most data-rich functions in any organisation. Every pay cycle generates information about headcount, cost, hours, absence, benefits and more. The leaders who recognise that are using it well beyond processing pay.
In our report, 69% of leaders say payroll is a core part of their ESG and governance agenda. Organisations are using payroll data for gender pay gap analysis, workforce cost modelling, DEI monitoring and benchmarking pay against market rates. Some are connecting it to performance and productivity metrics, or using it to identify early signs of turnover risk before those costs materialise.
"I don't think businesses have ever truly seen the value of payroll, or understood that there's money to be saved by harnessing that data."
Stephen Abbotts, Director of Payroll Services, UK, Azets
These aren't niche use cases. They're what payroll can do when it's properly resourced, well integrated and treated as a source of business intelligence rather than an administrative overhead.
They also review their setup proactively, not because something has broken.
"Waiting for problems to show up is the worst way to handle payroll changes."
CFO, Transport & Storage, Ireland
Two in three organisations said they'd reviewed their payroll setup in the last three years. The top trigger for switching provider wasn't a crisis — it was becoming aware of a significantly better solution. The best payroll functions get ahead of that question rather than waiting for it to be forced.
Read the full report
A Fresh Perspective on Payroll covers the real cost of payroll errors, where AI and automation are being used and where manual work persists, what leaders are least prepared for on the regulatory horizon, and seven principles for payroll success.
Fresh Perspectives is Azets' thought leadership series, bringing together proprietary research, C-suite insight and the expertise of our senior leaders across the UK, Ireland, Denmark, Finland, Norway and Sweden.