About the report
Scroll down and click through the different topics to read our report.
Introduction
Technology adoption
readinessCybersecurity
readinessCompliance readiness
Conclusion
It’s a changing
world out there –
and payroll is no exception.
Payroll is undergoing its biggest modernization in a generation, with automation, artificial intelligence, and APIs all becoming established as core payroll technologies that deliver key advantages to savvy adopters. So much so, that the question is no longer whether you should modernize payroll operations or not – it’s whether you’re ready to do so.
We’ve conducted detailed research engaging 200 finance, payroll and HR leaders from around the world, and uncovered a startling truth: confidence in future payroll readiness doesn’t match up to the size of the practical challenge of achieving it. And while midsize organizations are suffering in particular, enterprises are also finding it difficult to follow up on their aspirations to modernize.
There’s no time to lose in addressing this confidence gap. Cybersecurity threats are evolving and strengthening. Regulatory demands are accelerating. Cost pressures are mounting. And all this means that margins for error are shrinking all the time, and potentially leaving vulnerabilities that businesses like yours may not spot until it’s too late.
At CloudPay, we believe the best way
forward for future readiness is strength across three key pillars: technology
adoption, cybersecurity, and compliance.
All should be addressed together, as weakness in any of them will compromise
the strength of your core operations.
About
the guide
In this guide, we’ll establish the size of the confidence gap, explore the areas where the vulnerabilities lie for those at the biggest risk, and give you practical, actionable advice on how you can move from perceived readiness to proven readiness.
Our research
and methodology
To capture a snapshot of technology adoption, expertise, and future readiness in global payroll, CloudPay conducted comprehensive research with 200 senior decision-makers at multi-national midsize and enterprise organizations. All respondents submitted their views between September 8-24 2025.
Our respondents
We asked these respondents a variety of quantitative questions on a range of key payroll issues, measuring responses on scales of importance, confidence, and satisfaction. Equipped with the results, our experienced specialists in product, engineering, compliance, and security have analyzed the findings to establish data-driven insights on the current state of play.
From these insights, we’ve been able to deliver practical advice and expertise on where and how organizations like yours can improve their readiness.
Payroll modernization:
An enterprise readiness snapshot
The case for payroll modernization is well-established. Our research has found that only 3% of organizations expressed ROI as a primary concern for modernization. But making modernization happen is proving to be a very different story: only 7% of respondents said they’re satisfied with their current payroll costs and processes.
This gap between ROI awareness and reality reveals a deeper challenge. While organizations express strong confidence in their readiness to modernize, practical implementation levels tell a markedly different story. Across technology adoption, cybersecurity resilience, and compliance adaptability, organizations of your size are very confident. However, the practical reality of adoption isn’t matching up to that confident outlook.
Technology adoption:
Enterprises lead in confidence, but action lags
The key technologies driving payroll transformation are the ‘three As’: automation, artificial intelligence, and APIs. And there are significant differences in confidence levels across enterprise and midsize firms.
But whatever the technology,
many enterprises are encountering
some major barriers to fulfilling
their modernization aspirations:
Given that readiness without action won’t be enough to guarantee success in a highly competitive landscape, this means that many organizations are at risk of falling behind.
This is understandable for enterprises: bigger companies have larger attack surfaces and potentially more lucrative rewards for cybercriminals to target, but they also have more resources and dedicated security teams to help keep
data, systems, and applications safe.
The biggest threats to payroll
specifically are cyber threats, insider
fraud and human error. Threat actors
are obviously interested in payroll
data because it leads them to identity
and financial theft.”
Tim Grieveson
Chief Security & Risk
Officer at CloudPay
Compliance:
Enterprises are assured,
but complexity persists
Some 45% of enterprises say they are “very confident” in adapting to regulatory changes, with only 10% reporting they are “not very confident”.
This is despite many external headwinds. When it comes to global challenges affecting payroll forecasting, 28% of enterprises cite economic instability, 19% the changes to the workforce post-pandemic, and 12% geopolitical tensions, among other concerns.
Much of this extra confidence in the face of these challenges can likely be attributed to greater resources, meaning 57% of enterprises can rely on payroll software providers for their compliance information. Being able to put trust in local experts, and having greater means to access more of that expertise, can go a long way to boosting confidence in the business’s compliance capabilities.
What does this mean for your enterprise
organization?
These results make clear that enterprises feel better prepared for the future of payroll. That’s understandable as they are generally well-resourced and sophisticated in their organizational and technological approaches.
The challenge, therefore, is turning those resources, governance structures, and global reach into tangible action, driving payroll success in the long term and avoiding the paralysis of complexity, bureaucracy, and competing priorities.
In the next three chapters, we’ll explore how to bridge
the gaps between perceived readiness and proven readiness across technology adoption, cybersecurity,
and compliance.
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Introduction
In the previous section, we established that businesses like yours feel “very ready” for new payroll technology, with 60% saying so for automation and 55% for AI.
But despite dedicated IT teams, established governance frameworks, and proven change management processes, there are some substantial barriers to progress.
Enterprise obstacles to payroll modernization
The most commonly cited enterprise obstacle to payroll modernization is budget constraints (38%),
followed by legacy system dependencies (30%) and a lack of integration skills (19%). This demonstrates
that the capability is there, with larger budgets and headcounts, but execution at scale is
more challenging, in part due to complex organizational structures.
Automation:
Standardization at a global scale
AI:
From market-proven to market-leading
APIs:
Integration at enterprise scale
As technology allows payroll teams to
move away from reactive reporting
and towards proactive business intelligence,
strategic insights and planning are becoming
a key part of your function. Get this right,
and master technological transformation,
and the rest of your organization will come
to realize just how important payroll is.
Understandably, cybersecurity is cited as the biggest
concern in enterprise payroll transformation, picked out
by 36% of larger organizations.
Biggest security concerns for enterprise organizations
Confidence in protecting payroll data is high at 91%, with 39% going as
far as saying that they’re “very confident” – but the scale of organizations like yours
means this can be easier said than done.
This also gives businesses like yours a solid platform for
investing early in the next-generation payroll data protections that
can help defend against emerging threats.
These protections include:
AI-driven anomaly detection
Machine learning that identifies unusual patterns, at a scale far beyond the capability of human teams
Zero-trust architecture
Continuous verification that’s ideal for complex environments with numerous integration points
Quantum-proof encryption
Early adoption of post-quantum cryptography standards before threats materialize
API protections
Using OAuth or similar authentication standards, along with strong access controls and API management training, to reduce the risk of error and improve security through automation
Tokenization
Replacing sensitive data with tokens throughout the payment process, limiting exposure if systems are breached
Regularly upskilling in these areas will
ensure that you can work with and
complement the increasing use of
technology in the months and years
ahead, and remain familiar with
cybersecurity awareness.
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you’re currently reading
Cybersecurity readiness
Next
Enterprises have expressed high confidence in their ability
to adapt to compliance change, with 45% of larger organizations
saying that they feel “very confident”.
As with security, much of this confidence comes from greater resources: dedicated compliance
teams, legal support, and sophisticated information gathering.
However, large organizations like yours also have to deal with greater complexity, wider
geographical spread, and regulatory demands that are exponentially larger.
The expertise that you and your payroll
partners have built up over the years can
help bridge the gaps between technical
implementation and legal requirements.
Through this, you can become more than
just process executors – you’ll become
strategic architects of compliance.
From confident readiness
to industry leadership
Enterprises have made it clear that they feel very ready
for automation and AI, and very confident in
their abilities around cybersecurity and compliance.
That’s easy to understand, given the relative wealth of
resources and infrastructure available to them:
Strategic positioning
- Resources for innovations like AI
and quantum-proof encryption - Purchasing power and influence
over vendors - Thought leadership success
stories that can reshape
market adoption
Operational advantages
- Standardizing processes
at a global scale - Access to dedicated
expertise across compliance,
security, and IT - The ability to take
a long-term perspective
on transformation
Market leadership
- Setting industry
benchmarks and standards - Attracting professionals
who want to work with cutting-
edge technology - Pushing vendors to develop
better solutions that
benefit the entire market
However, for all the resources, expertise,
and infrastructure you might
have, this confidence means nothing
without execution. After all:
The organizational capability might be there, but so many obstacles can get in the way of operational execution:
- Multiple stakeholders can slow decision-making.
- Competing budget priorities can delay investment.
- Legacy systems can create technical debt that’s expensive to resolve.
- Risk-averse cultures steer organizations like yours clear of leading the way.
And when midsize organizations aren’t held back by these obstacles, they can use their agility to set the pace instead, ahead of their enterprise competitors.
The answer:
Strategic partnerships with vendors who understand enterprise complexity, and can navigate it alongside you.
CloudPay’s approach:
Scale, security, and strategic partnership
CloudPay has found the perfect way to blend together human expertise and the ‘three As’.
Deployed at enterprise scale, automation standardizes globally while managing local
exceptions consistently. AI is deployed with governance frameworks that satisfy audit and
compliance requirements, and APIs integrate with existing enterprise architecture.
This allows enterprises to benefit from:
A global platform with end-to-end capabilities
A unified payroll platform that standardizes processes while accommodating regional nuances, and is capable of handling hundreds of thousands of employees across dozens of territories. This platform can be integrated with complex HCMs such as Workday, and is scalable for enterprise expansion.
Security and compliance built for enterprise scale
Certified to ISO 27001, SOC 2 Type II, and ISO 22301, our partnership enables proactive preparation for emerging threats, including quantum-proof encryption. Incident response protocols are tested and documented for business needs, and work alongside comprehensive vendor risk management for supply chain security.
A strategic partnership that’s more than just technology
Dedicated support teams who understand enterprise organizational complexity, and can help navigate stakeholder and change management. Executive engagement can help build business cases for sustained investment, and compliance updates translate regulatory changes into actionable guidance across all markets.
Key takeaways
For enterprise payroll leaders
Convert confidence
into action – quickly
- Get ahead of more agile
competitors to maximize advantages - Use enterprise resources to
pilot innovations - Build business cases that
leverage ROI certainty
Address legacy systems
strategically, not reactively
- 30% cite legacy systems as the
greatest barrier to modernization - Phased roadmaps deliver value while
managing technical debt - Partner with vendors who integrate
with complex environments
Simplify before
you automate
- 54% see process simplification as a major cost opportunity
- Years of growth and regional
variation will have created
unnecessary complexity - Standardize processes first, then automate consistently across markets
Leverage dedicated
expertise strategically
- Use in-house compliance, security,
and IT specialists to set
strategy and governance - Partner with vendors for confident execution across all markets
- Create solid partnerships that
combine internal expertise
with vendor capabilities
Treat the ’three As’ as an integrated enterprise strategy
- Align and leverage automation,
AI, and APIs across payroll, IT,
HR, and finance - Get executive sponsorship that can navigate organizational complexity
- Unified platforms deliver more value than piecemeal point solutions
Move faster than your structure
suggests possible
- Organizational complexity is real,
but shouldn’t paralyze action - Pilot programs in selected markets
can prove value quickly - Use success stories to build
momentum and overcome
internal resistance
Ready to
turn readiness
into reality?
Future readiness in payroll isn’t a destination – it’s an ongoing
journey. By combining your natural agility with the right strategic
partnerships, you can effectively compete with – and potentially
differentiate from – enterprise competitors.
CloudPay’s team of experts can help you assess your current
capabilities, identify priority areas for improvement,
and build a roadmap for proven future payroll readiness.
Ready for readiness?
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Conclusion
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