How to design a global payroll strategy for 2025

As we approach 2025, the stakes in payroll are higher than ever. Rapid globalization, stricter compliance standards, and employee expectations regarding transparency and timeliness are forcing organizations to rethink how they approach payroll on a global scale.

Yet, many companies fail to adapt to the changing expectations and requirements surrounding payroll and still struggle with outdated systems, fragmented processes, and lack of technological integration. In order to control payroll costs, minimize compliance risks, and increase workforce satisfaction, organizations must develop a robust global payroll strategy.

We have talked to four leading payroll industry experts about what businesses should keep in mind when designing a strategy for global payroll in 2025. Read on as we explore major trends and challenges that are set to impact payroll management in the upcoming year and outline the cornerstones for a future-proof global payroll strategy that will set your organization up for success.

Multinational organizations will be heavily influenced by major industry trends when designing their global payroll strategies for 2025. As AI continues to make its way into all areas of business, organizations need to adapt their operating models to increasingly incorporate technology, and payroll is no exception to this.

“Businesses should consider integrating AI-driven tools that streamline payroll processes, enhance accuracy, and reduce the administrative burden,” Walter William Duncan, Payroll Manager and Podcast Host & Co-Founder of ‘It's About Payroll’, says. “This technology not only facilitates faster payroll cycles but also ensures compliance with evolving regulations across different jurisdictions. Embracing these tools will be crucial for companies looking to maintain efficiency in a rapidly changing global landscape.”

At the same time, the continuing economic uncertainty forces companies to be cautious about spending while simultaneously having to cater to employees’ increasing demands for incentives that go well beyond traditional compensation. One emerging trend that addresses both these needs is real-time payroll, which is gaining traction as a flexible approach to pay cycles that could also serve as a competitive advantage, allowing employees to access earnings as they are accrued.

“Another critical trend for global payroll in 2025 is the focus on data security and privacy. With the rise of cyber threats and stringent regulations like GDPR, companies must prioritize robust cybersecurity measures to protect employee data,” Duncan states. “Investing in secure payroll systems and ensuring compliance with local laws will not only safeguard information but also build trust with employees. Organizations that prioritize data integrity will be better positioned to navigate the complex global landscape.”

Blockchain technology is emerging as a promising solution to enhance transparency and security in payroll management. This transparency is set to foster trust and help organizations efficiently manage payroll across borders, especially in regions with less reliable financial infrastructure.

“The rise of BRICS (editor’s note: Brazil, Russia, India, China, and South Africa) and DeFi (editor’s note: Decentralized Finance) could reshape payroll in 2025. As BRICS, cryptocurrencies and blockchain technologies gain traction, businesses may explore alternative payment methods for employees, particularly in markets where traditional banking systems are less reliable,” Duncan notes.

“Offering payroll in digital currencies or utilizing blockchain for secure transactions can provide both efficiency and transparency. Organizations that adapt to these innovations will not only lead in payroll management but also appeal to a tech-savvy workforce.”

As BRICS, cryptocurrencies and blockchain technologies gain traction, businesses may explore alternative payment methods for employees, particularly in markets where traditional banking systems are less reliable.

Walter William Duncan III

Payroll Professional & Payroll Podcast Host

“The main challenges in designing a global payroll strategy for 2025 include navigating regulatory compliance across jurisdictions, ensuring data privacy and security, integrating advanced technologies like AI, improving employee experience, managing costs, handling cross-border payments, and addressing talent shortages,” Keith O’Brien, Global Payroll Compliance Manager, confirms.

According to a survey conducted by Forrester, payroll leaders highlight that their primary challenges include ensuring a consistent employee experience across different regions, dealing with inefficiencies linked to multiple payroll systems, and meeting diverse regional compliance requirements.

“Experts emphasize the need for robust compliance frameworks, cutting-edge data protection, seamless technology integration, employee-centric processes, strategic investment in scalable solutions, fintech adoption for cross-border transactions, and ongoing training to bridge skill gaps,” O’Brien explains.

In designing a global payroll strategy for 2025, businesses should focus on building resilient, flexible systems that can adapt to these challenges, while also prioritizing employee experience and operational efficiency.

Keith O’Brien

Global Payroll Compliance Manager

As shown by ADP’s recent global payroll survey “The potential of payroll in 2024”, senior leaders in multinational organizations cite data security (38%) and integration with payroll and other business critical functions (35%) as major points of improvement in their worldwide payroll over the next two to three years, followed by data quality and integrity, diversification of payment options, pay transparency and equality, reporting capabilities, payroll accuracy and timeliness, and regulatory compliance.

“In designing a global payroll strategy for 2025, businesses should focus on building resilient, flexible systems that can adapt to these challenges, while also prioritizing employee experience and operational efficiency,” O’Brien concludes.

To build a resilient and effective global payroll strategy for 2025, organizations need a comprehensive approach that aligns operational efficiency with evolving workforce expectations. This includes selecting the right payroll model that balances global consistency with local compliance, fostering employee trust through transparency and reliability, and embracing advanced technologies that streamline payroll processes.

Choosing the right global payroll model

Building a successful global payroll strategy requires careful preparation and several upfront considerations. This includes an initial assessment of three crucial aspects: the organization’s geographic footprint, the employee needs surrounding payroll, and the choice of a suitable global payroll approach.

“Before formalizing a global payroll strategy, the first thing to do is to fully understand your organization’s geographic footprint and your people’s needs. Your employees in a warehouse in Bolivia might have different requirements to your marketing team in Paris, and your developers in India might have different expectations to your US-based sales representatives,” Russell Webb, Payroll Influencer and Business Development Manager, explains.

Gathering insights from local teams through surveys and interviews can provide valuable feedback to guide key strategic decisions in global payroll management. Understanding employees' preferences, pain points, and expectations across regions helps clarify whether a single, unified global payroll system is preferable, providing consistent experiences across countries, or if a regional or in-country approach is better suited to address specific needs.

The options range from a centralized model to a hybrid or localized approach that offers a tailored employee experience by leveraging local expertise, language proficiency, and familiarity with unique cultural nuances. “In my experience, bigger companies will often go with global outsourced models as they strive for standardization and automation, whereas mid-range organizations will try to put the employees first and choose hybrid,” Webb says.

“In my opinion, hybrid models work best as you get great support for challenging countries and the easier countries can be done from the organization’s headquarters. But there are no right and wrong answers with any of the above options, as local, hybrid, and global payroll models all have their own merits and come with pros and cons.”

Leveraging the full potential of technology

There is no denying that technology is one of the fundamentals for building a successful global payroll strategy in 2025. Cloud-based solutions for multi-country payroll management are on the rise since they offer significant advantages, such as allowing payroll teams to oversee and coordinate payroll processes globally while ensuring compliance with diverse local regulations.

They improve accuracy by automating data updates and facilitating seamless integration with other HR systems, reducing manual errors and enhancing data security. Additionally, cloud-based systems offer organizations the necessary scalability to expand into new regions and support real-time access for HR and Finance teams to view and analyze payroll data across geographies.

The second pillar of building a robust tech base for a future-proof global payroll strategy is Artificial Intelligence. Leveraging AI in global payroll analytics helps improve accuracy, reduce errors, and ensure compliance. AI-powered algorithms can analyze vast amounts of payroll data and flag inconsistencies and potential payroll errors that might go unnoticed with manual checks.

In addition, AI can enhance global payroll compliance by monitoring regulatory updates and adjusting payroll processes accordingly. For instance, AI can track changes in local tax laws or employment regulations and automatically update payroll calculations to reflect these adjustments.

Even with automation and AI seemingly on an unstoppable tangent, people are still the most important asset to almost every business on the planet and to keep them you must reward them right and on time.

Russell Webb

Payroll Influencer & Business Development Manager for Managed Service Payroll

Meeting employee expectations and building trust

Pay has always been a major factor for retaining employees. Not only in terms of adequate compensation for the work they do, but also when it comes to the accuracy and timeliness of salary payments.

“Even with automation and AI seemingly on an unstoppable tangent, people are still the most important asset to almost every business on the planet and to keep them you must reward them right and on time. Employees that lose trust in the payroll and HR teams will quickly find other organizations where they do trust them,” Webb explains.

Yet, as shown by the EY publication “Cost and risks due to payroll errors: Results of the 2022 HR Processing Risk and Cost Survey”, the average company has only an 80.15% payroll accuracy rate. In the light of current labor shortages and the continuous war for talent, organizations need to ensure to improve the accuracy and timeliness of their payroll processes to stop employees from leaving.

But it’s not just payroll accuracy improvements that should be taken into consideration when building a global payroll strategy in 2025. Recently, employees' interests have broadened from simply receiving their paycheck to valuing pay transparency and flexible options for payment, such as Earned Wage Access (EWA). Organizations that want to successfully leverage their global payroll to retain talent and improve employee satisfaction must work towards gaining a better understanding of employee expectations.

Payroll leaders need to be prepared to use their voice to share their vision and communicate their strategy alongside a clear business case for driving a change that makes a difference.

Catey Josephine Palmer

Senior Global Payroll & Expat Tax Leader

“The realities of economic instability across the world will shape the global payroll landscape in 2025. Budgets will be squeezed, so what will be critical is for payroll leaders to identify what their most pressing challenges are, i.e. resource, skills shortage, automation needs, technological investment, knowledge acquisition,” global payroll professional Catey Josephine Palmer notes.

Global mega trends such as the rise of AI and developments like the growing importance of employee wellbeing will continue to impact the payroll industry, and global payroll leaders need to adjust their strategies to stay ahead of the curve and become more comfortable with embracing new technologies.

“Payroll leaders need to be prepared to use their voice to share their vision and communicate their strategy alongside a clear business case for driving a change that makes a difference. They will need to face their fears of failure to achieve the results they desire in the long term,” Palmer says.

We’d like to express our gratitude to the industry experts who contributed to this article. Their input went far beyond simply providing quotes. They shared valuable insights, examples, and perspectives that were essential to shaping the piece. Without their expertise, this article wouldn’t have come together.

Catey Josephine Palmer

Catey is a senior global payroll and expat tax leader who is the owner of AOGG Payroll, a forward-thinking and dynamic payroll and tax consultancy. With a strong focus on achieving high performing payroll engines and empowering teams to shape the road map of success, Catey is able to show how payroll can be the strategic business partner that establishes the building blocks for growth.

LinkedIn profile

Keith O’Brien

Keith is a senior Global Payroll Compliance Manager in the Global Payroll & EOR space with a proven payroll transformation experience and a subject matter expert in complex payroll processing environments.

LinkedIn profile

Russell Webb

Russell is a payroll influencer and the author of Payroll & Pastries newsletter. He leverages over eight years of experience in the global payroll industry and currently works for Phase 3 Consulting as a Business Development Manager, specializing in Managed Service Payroll.

LinkedIn profile

Walter William Duncan III

Walter is an experienced payroll professional, payroll podcast host and co-founder of It’s About Payroll. As a payroll and human resource management expert, Walter has provided services and support to help startups, small businesses, and established entities grow and thrive.

LinkedIn profile