New Delhi, June 12 (IANS) As artificial intelligence (AI) reshapes workplaces and workforce management, payroll in India is undergoing a major transformation, with over 94 per cent of organisations leveraging payroll data for business decisions related to hiring, retention and cost optimisation, a report showed on Friday.

A report by ADP highlighted that payroll data now plays a meaningful role in key business decisions related to hiring, employee retention and cost management, highlighting its growing importance in shaping workforce strategy.

Six in ten organisations said they already use payroll data for budget simulations, while many are also applying payroll insights to workforce planning, variable pay modelling and market benchmarking.

“Payroll is no longer a function that organisations consider after decisions are made. It has become a starting point for planning, enabling more informed and timely decisions while ensuring the accuracy and compliance that employees rely on,” said Rahul Goyal, Managing Director, ADP India and Southeast Asia.

The report highlighted that despite rapid digital adoption, payroll accuracy remains the foundation of effective pay practices.

However, organisations continue to face operational challenges arising from fragmented systems, manual data entry and changing regulatory requirements.

Nearly 45 per cent of organisations surveyed identified managing payroll compliance across regions as a major challenge, accelerating the shift towards integrated and AI-enabled payroll systems supported by automation and governance frameworks, according to the report.

Moreover, over 96 per cent of respondents reported either using predictive analytics or planning implementation, while one in two organisations said they intend to deploy AI-powered payroll systems over the next 12 months.

Companies continue to emphasise responsible AI deployment, stronger data governance and human oversight to ensure fairness, transparency and quality in payroll processes, the report said.

–IANS

ag/