In an era where payroll accuracy and agility can define employee trust and organisational resilience, a transformative shift is underway, recasting payroll from an administrative necessity into a powerful lever of business value. This evolution took centre stage during a recent People Matters and ADP webinar titled “The Future of Pay in India 2025: Navigating Compliance, Integrated Technology and Financial Wellness.”

The session convened three eminent voices from the HR landscape: Majid Ali Khan, CHRO at CMS IT Services; Kanchana Krithivasan, HR Director – India and Southeast Asia at ADP; and Ramakrishna Vyamajala, CHRO at Home First Finance and was moderated by Cheshta Dora, Lead – Research and Content Strategy at People Matters. Together, they examined the strategic transformation of payroll and dissected key findings from ADP’s comprehensive research involving over 300 HR, payroll, and finance leaders across India.

The ADP Future of Pay in India 2025 study reveals a straightforward transformation narrative. A striking 55% of organisations are now prioritising the reduction of financial stress through payroll-driven initiatives, indicating a growing recognition of payroll’s role in supporting employee well-being. Meanwhile, 46% of leaders identify integration challenges within payroll systems as a significant roadblock, underscoring the urgency of modernising fragmented infrastructures. Beyond process streamlining, payroll today plays a pivotal role in workforce planning, pay parity, and talent acquisition and retention, making it central to the broader strategic agenda of forward-thinking enterprises.

Personalised payroll: A response to generational and lifestyle shifts

Opening the discussion, Majid Ali Khan highlighted the complexity of managing diverse employee expectations. “We’re no longer dealing with a homogeneous workforce. Today’s payroll strategies must reflect the priorities of at least four to five generations, each with distinct needs,” he shared. For example, while older employees may prioritise NPS (National Pension System) contributions and retirement savings, Gen Z professionals are focused on immediate access to wages and lifestyle-driven benefits.

This shift has led to what Majid calls the “hyper-personalisation of payroll.” Organisations can no longer adopt one-size-fits-all approaches. Instead, the emphasis is on creating agile frameworks that maintain compliance and standardisation while offering flexibility.

“Payroll errors are not just transactional mistakes; they’re deeply emotional breaches,” he added. Inaccurate or delayed payroll impacts employee morale and productivity, and worse, it erodes trust. Modern payroll systems, backed by AI and automation, are now essential to minimise risk and personalise employee experiences.

The compliance conundrum: Navigating a dynamic regulatory landscape

As regulatory frameworks become more stringent, the margin for error is narrowing. Kanchana Krithivasan said compliance is no longer a matter of back-end reporting but a proactive, strategic concern. “We’ve moved from a process-control mindset to a distributed trust model. Today, compliance is everyone’s business.”

Ramakrishna Vyamajala highlighted how shifting state and central laws complicate the payroll landscape. “We recently faced major disruptions due to a state’s move to fully digitise professional tax processes. System mismatches, server downtimes, and integration gaps create friction that only tech-enabled systems can resolve.”

Kanchana and Ramakrishna emphasised the importance of a centralised compliance dashboard to track changes across geographies and functions. “You need tech that gives you real-time visibility and confidence that you’re audit-ready,” said Kanchana.

Payroll as a driver of financial wellness

Payroll is emerging as a cornerstone of financial wellness strategies. “Payroll today is about lifestyle alignment,” Ramakrishna said. “We’re seeing a shift from compliance and tax efficiency to enabling choice. Employees want early wage access, customised insurance, and financial tools that align with their life stages.”

Kanchana illustrated this with ADP’s Flexi Insurance initiative: “We enabled employees to personalise their insurance packages with many voluntary plans. But to do that, our payroll systems had to be ready to manage the change and flexibility that we wanted to offer to our employees. -.”

This is where integration becomes a game-changer. Systems that talk to each other reduce manual workload and allow HR teams to offer more meaningful benefits.

Data for equity: Using payroll to benchmark pay parity

The panel also addressed how payroll data can serve as a lens for improving pay equity. “Payroll data captures total actual earnings, not just fixed salary but also bonuses, incentives, deferred payments,” said Kanchana. “When you slice this data by gender, role, and level, you uncover real disparities that traditional compensation reports miss.”

She also shared a progressive hiring practice adopted at ADP: “We stopped asking for previous salary history during hiring. Instead, we assess expectations, potential, and role benchmarks. This helps address ingrained compensation biases at the time of hire itself.”

Building payroll talent for the future

With payroll now sitting at the strategic table, talent development in this function is imperative. “You need tech-savvy, analytically inclined, and highly responsive professionals in payroll today,” said Ramakrishna.

He advocated for cross-functional learning and internal upskilling. “We brought in people from communications and technology to complement payroll teams. It’s not just about crunching numbers; it’s about interpreting policy, explaining benefits, and scenario planning.”

Kanchana echoed the need for a mindset shift. “Payroll has long been seen as a back-office function. But with automation freeing up bandwidth, these professionals can now upskill and grow into broader HR roles.”

The automation imperative: Where legacy holds you back

As audience poll results indicated, the top pain points with legacy payroll systems are manual processes, poor integration, and a lack of data analytics. “Automation is not about replacing people; it’s about freeing them to focus on value,” said Kanchana.

She encouraged leaders to examine redundant manual steps: “Why do you do this the way you do? Often, the answer is ‘legacy.’ It’s time to ask what adds value and what can be automated.”

With digital audits becoming more stringent, audit trails and data transparency are non-negotiables. Systems must be designed with scalability and accuracy in mind.

Final word: Payroll as a trust engine

In closing, each speaker echoed a shared sentiment: payroll is a trust engine. “You get it wrong once, and it’s hard to rebuild credibility,” said Majid.

Ramakrishna offered a compelling analogy: “Payroll is like the goalkeeper. If you miss, there’s no one else behind you. But just like modern goalkeepers, payroll teams today aren’t just defenders; they’re helping organisations score.”

As organisations move into 2025 and beyond, payroll must be seen not as an administrative function but a strategic asset, driving compliance, enabling wellness, and shaping workforce resilience.