Payroll sector set for main shift as AI adoption grows: MHR examine

The payroll business is on the verge of a big evolution, with a considerable 73% of payroll professionals predicting that AI will play a pivotal function in shaping the operate over the following 12 months, in line with a current examine by MHR.

MHR is a UK-based supplier of HR, payroll, and finance software program.

The findings, revealed in MHR’s 2025 report titled ‘The Future Is Payroll’, coincide with Nationwide Payroll Week (1-5 September 2025).

The report highlights a rising optimism surrounding AI’s potential, alongside an rising concern concerning the dangers of falling behind in technological developments.

The report signifies that greater than half (52%) of payroll professionals have already skilled a big influence from AI of their work over the previous 12 months.

Nevertheless; regardless of the eagerness to evolve the payroll operate, the report reveals a counterintuitive development: the reliance on guide, admin-heavy processes is on the rise.

Particularly, using spreadsheets for payroll processing has surged from 30% to 63% year-on-year, whereas guide information enter has elevated from 35% to 50%.

Moreover, the duplication of information throughout programs has escalated to 55%.

Whereas payroll professionals are eager to undertake new options to alleviate their workload, with 46% recognising that AI may considerably scale back errors, they face notable challenges.

Considerations over information safety had been expressed by 48% of respondents, and 38% cited an absence of abilities or coaching in adopting AI as a barrier. These challenges might contribute to the rising dependence on guide processes.

Importantly, the report reveals that 88% of payroll professionals consider their firms want to speculate extra in an effort to absolutely realise the advantages of payroll expertise.

MHR CEO Anton Roe mentioned: “Payroll is dealing with a paradox. Firms are embracing AI, but workers are nonetheless spending hours on guide information entry. The rise in guide processes is draining time for payroll professionals and limiting what they’ll obtain.

“They’re calling for brand spanking new methods of working. Enterprise leaders are accountable for offering payroll groups with a repair to the admin-heavy processes they’re at present working with, which has jumped to the highest problem payroll is dealing with this 12 months.”

Roe added: “Enterprise leaders should act now to champion unsung payroll heroes. They should join their folks’s readiness for change with the expertise and abilities wanted to untap the payroll sector’s full potential. However they need to keep in mind AI will not be a fix-all and contemplate bettering methods of working and harnessing the total functionality of their payroll funding.