After a decade of ambitious HR transformations, many organisations enter 2026 with mature HR systems but unresolved payroll risk, fragmented data, and overstated expectations of AI. The next wave of transformation will be less about shiny technology and more about control, assurance, and enterprise data foundations.
1. Payroll Risk Moves from “Back Office” to Board Agenda
Payroll is increasingly recognised as one of the highest operational and reputational risks in the organisation. Rising legislative complexity, faster regulatory change, data protection requirements, and public intolerance of payroll errors mean failure is no longer acceptable.
In 2026, organisations will:
- Elevate payroll risk to board and audit committee discussions
- Introduce more formal payroll controls, assurance, and testing
- Turn to managed services where internal capability or resilience is lacking
Payroll will be treated less like an HR process and more like a regulated financial operation.
2. The AI Hype Cycle Peaks – Enterprise Data Takes Priority
The initial excitement around embedded AI in HR and payroll platforms continues to fade. Organisations realise that AI features inside systems are often narrow, siloed, and difficult to govern. By 2026, organisations accept a fundamental truth: AI cannot deliver value while enterprise data sits in disconnected systems and islands.
Focus shifts toward:
- Consolidating HR, payroll, finance, and workforce data into enterprise data platforms
- Defining common data models, ownership, and governance
- Applying AI at the enterprise layer, not inside individual tools.
3. Data Foundations Become the Real Transformation Work
With HR systems largely implemented, many organisations confront the reality that data quality and structure, not technology, are holding them back.
Transformation effort increasingly targets:
- Global job, pay transparency, and costing structures
- Clean employee and payroll master data
- Clear accountability for data quality across HR, payroll, and finance.
4. Global Payroll Becomes the Next Major Transformation Battleground
As HR system landscapes mature, global payroll moves to the centre of transformation agendas. Organisations increasingly address fragmented payroll landscapes, invest in payroll capability and controls, and align payroll more closely with finance and compliance.
