Is your payroll and HR misaligned? Here’s some advice to help these two lifeblood departments work together more effectively.
In an ideal world, an organisation’s payroll and HR departments work together as allies—each confident in their domains but happy to help when needed. But sometimes HR and payroll are more like frenemies.
We asked our connections on LinkedIn: How would you describe the relationship between payroll and HR in your organisation?
- We work together as allies 74%
- We collaborate on occasion 11%
- We don’t support each other 16%
Payroll can’t do its job without HR’s data, and HR can’t pay employees without payroll. When the payroll and HR departments are in sync, the whole organisation is better off.
However, if you do find your company’s payroll team not collaborating effectively with HR, then here are five tips for fostering a more harmonious relationship:
1. Break down departmental walls
Some organisations nest payroll under HR, and others under finance. That can lead to closer relationships with one department over the other. Don’t lose sight of the fact that payroll is the vital link between finance and HR. Consider having cross-departmental learning sessions and social events. Acknowledging one another’s expertise and value, while honouring the fact that no one could do the work without the other. This will help break down divisions. You’re all working towards the same goal: Keeping the workforce happy and ticking along.
2. Balance local needs with global standards
The details of payroll and HR compliance vary by country—from tax rules and labour laws to data privacy regulations. If your organisation’s global payroll is handled from headquarters in one country, make sure your payroll professionals are keeping in touch with in-country HR on local developments. Every organisation should have a global framework for processes and systems that allows local teams the flexibility to adapt for regional compliance and cultural differences. Encouraging knowledge sharing between countries will help everyone align on best practices while remaining legally compliant and culturally appropriate.
3. Integrate your payroll and HR systems
This is the biggest way to harmonise payroll and HR. Streamlining your people-related systems reduces errors, increases efficiency and lowers operational risk. Reducing duplication of work and creating one source of truth saves time for everyone. When selecting a globally compliant provider, be sure that the integration has multi-currency and multi-language capabilities. For example, activpayroll partners with many HCMs, such as UKG Ready and HiBob, which can feed HR data into the activ8 Global Experience Platform. Integrating your systems reduces manual data entry and improves payroll accuracy, while giving employees a more unified experience.
4. Define and streamline your processes
If you pursue an integration, it’s a great time to revisit the scope and responsibilities of HR and payroll. Running through an entire payroll process and an employee lifecycle together to create a process map will help identify weak spots as well as help both sides understand needs and concerns. Issues with inaccurate or late data are best solved together. Clarifying the process will make it clear who is responsible for what, and in what form and timeframe events need to occur. Be sure to confirm that the workflows consider cross-border transactions, overseas assignments and varying payroll calendars across regions.
5. Add value for each other
Reporting becomes much easier when payroll and HR systems are integrated. A real-time dashboard offers visibility into your payroll operations, and joint analysis of global workforce data can uncover trends like attrition by country, overtime anomalies or cost inefficiencies across regions. HR and payroll should collaborate on audit readiness and documentation. It’s also wise to create shared KPIs and track progress. Remember to celebrate the wins, such as successful year-end tax processing, and share the work your teams do with the wider company.
A strong, collaborative relationship between payroll and HR makes daily operations smoother and creates measurable business value. When these teams operate in sync, organisations benefit from improved reporting, compliance and employee satisfaction. Aligning payroll and HR is no longer optional—it’s a strategic imperative.
Payroll leaders play a key role in fostering this alignment by investing in the right systems, encouraging a culture of cross-departmental respect and ensuring that both departments are empowered to support one another. By doing so, you’ll help transform payroll and HR from back-office functions into strategic partners that contribute to your organisation’s long-term success.