Few corporate functions inspire less enthusiasm than payroll processing. The laborious collection of time sheets, calculation of overtime, deduction of taxes and disbursement of wages have all traditionally been thankless tasks—essential but uninspiring, demanding meticulous accuracy but offering little strategic value. Yet, at a recent industry event in Bengaluru, executives gathered to discuss how artificial intelligence (AI) is transforming this backwater of business operations into a showcase for cutting-edge technology.
“N’GAGE”, hosted by payroll solutions provider Neeyamo, at JW Marriot, Bengaluru on 20 March, brought together payroll specialists, human resources executives and technology experts to explore how AI is reshaping an industry that touches virtually every employed person. The timing is apposite. As organisations navigate the complexities of hybrid work and increasingly fragmented regulatory environments, payroll has become both more challenging and more consequential.
“The future of work is no longer defined by location but by the quality of output,” observed Suraj Chettri, head-HR, India & South Asia, Airbus, in his keynote address. “It is the blend of human intelligence and artificial intelligence that drives return on investment.” This harmony between human expertise and machine capability represents the new frontier in payroll management, with AI handling routine calculations while human specialists focus on compliance and employee experience.
Chettri’s remarks underscored a broader theme: technological advancement is rendering many traditional roles obsolete, making adaptability essential. “Employees must proactively upskill, reskill, unskill and adapt,” he advised. “HR departments alone cannot bear the responsibility for learning and development. Organisations should foster a culture of self-driven growth.”
Rangarajan Seshadri, CEO, Neeyamo, demonstrated this innovation mindset by unveiling two new product offerings. The first covers the latest features in Neeyamo’s existing payroll product — Neeyamo Payroll with a focus on enhancing pre- and post-payroll processes—the labour-intensive stages that bookend the actual calculation of wages. The second, more intriguing product, called Payroll I.O, allows organisations to validate payroll data regardless of which provider processes their wages, effectively creating a quality-control layer above existing systems.
A subsequent panel discussion explored how organisations are implementing these technologies in practice. Satish Uchampally, chief manager, payroll delivery excellence, APAC, Siemens, noted that payroll transformation requires strategic choices about service models. “Companies must decide between different payroll models, such as managed services, comprehensive models, or Software-as-a-Service,” he explained. “Each decision impacts various aspects, including data migration, change management, vendor selection and compliance,” he added.
The complexity of these decisions partly explains why payroll transformation often fails to deliver expected benefits. Lopamudra Priyadarshini, director, HR technology and transformation, Acquity Knowledge Partners, highlighted a common pitfall: “While companies invest heavily in new payroll systems, failures often arise due to a lack of proper training and adoption by employees. Without user adoption, even the most advanced systems can fail, rendering investments futile.”
This human dimension of payroll is easily overlooked. While the function may seem purely computational, it represents the most direct transaction between employer and employee. Satya Aralikatti, director-Asia Pacific HR operations, Hitachi Rail, emphasised that “payroll is not just about calculating salaries but also about adhering to local and international regulatory requirements.” Errors in this domain can have outsized reputational consequences.
Indeed, Priyadarshini shared an anecdote from her early career where a minor payroll error—a salary deduction of just Rs100-150 — triggered significant employee dissatisfaction. Such incidents underscore why accuracy remains paramount, even as efficiency improves.
At Siemens, approximately 60 per cent of payroll effort is concentrated in the pre-payroll phase, according to Uchampally. Though 80 per cent of necessary data comes from HR systems, the remaining 20 per cent—especially for blue-collar employees—requires manual validation. The company has initiated an automation project to streamline these activities by consolidating data sources and minimising human intervention.
The most transformative applications of AI in payroll extend well beyond mere automation. Advanced systems now offer predictive analytics, identifying potential errors before they occur. Machine learning algorithms can detect unusual patterns that might indicate fraud or miscalculation. Natural language processing powers conversational interfaces that allow employees to query their pay details through voice commands or chatbots, reducing the administrative burden on HR teams.
Perhaps most valuable is AI’s role in compliance management. Neeyamo’s Gen-AI enabled Compliance Monitoring feature continuously monitors regulatory changes across jurisdictions, automatically adjusting calculations to reflect new tax rates, statutory contributions or reporting requirements. For multinational companies navigating dozens of regulatory environments, this capability alone justifies investment in sophisticated payroll technology.
The next frontier appears to be integration with broader workforce-management systems. When payroll data flows seamlessly into analytics platforms, organisations gain insights into labour costs, productivity patterns and the financial impact of workforce policies. What begins as a transactional necessity evolves into a strategic asset.
As businesses continue to adopt AI-powered payroll solutions, the status of the function within organisations is likely to rise. The once-mundane process of paying employees correctly and on time is becoming a showcase for digital transformation—and a reminder that even the most routine business operations can be re-imagined through technological innovation.
