Payroll leaders sometimes hit a ceiling on growth, despite proving their value to a company over years. Let’s consider why payroll leaders can make great Chief People Officers, if given the right career development.
Payroll leaders, especially at mid-sized companies, often reach a point where they have proven their value but hit a ceiling when it comes to promotion. A payroll leader might be so valuable to the company that the top leadership doesn’t want to promote them out of daily operations.
Companies should not neglect career progression for payroll leaders, as many would like to earn a place in the boardroom and help guide strategy. Yet in all but the largest organisations, Chief Payroll Officers remain quite rare, and payroll leaders seeking a promotion are often required to switch companies to secure the role.
The emergence of the Chief People Officer role offers a compelling path forward—especially for payroll leaders with a deep understanding of operational complexity and workforce dynamics. The title itself acknowledges that workforce management has become more complex. Every Chief People Officer joining the C-suite in the years to come needs a strong understanding of payroll, its challenges and strategic opportunities.
Current state of payroll leadership
Payroll leaders are often informing strategic decisions within organisations, even without holding a position in the C-suite. With the rise of global data reporting, payroll has evolved from a silent back-office function to a trusted adviser. Yet the Chartered Institute of Payroll Professionals’ 2024 Future of Payroll Report found that “manager” was the highest level payroll role within more than half of organisations surveyed. Less than 5% of respondents said payroll was represented in the C-suite.
CIPP asked respondents about highest payroll title in their organisation:
- Manager 54%
- Head 17%
- Director 14%
- Chief Payroll Officer4%
- Supervisor 2%
- Coordinator 1%
- C-Suite <1%
Having an executive in the C-suite who understands payroll is crucial to success. Not only to take advantage of the opportunities of a global payroll transformation or international expansion, but to also mitigate risk. Compliance poses a significant risk to any organisation, as well as having a significant impact on employees. Payroll is a common target for criminals, with both AI and social-engineering-driven fraud on the rise.
Embrace Growth
The fear of not being able to “afford” promoting a key payroll player from a functional role to a strategic role can lead to that employee leaving the company to secure a promotion.
Payroll leaders who successfully complete one payroll transformation often use that experience to secure a new role. In the past payroll was seen as a siloed-off department that kept running with little interference from other departments. But in recent years, there is more acknowledgement of payroll’s strategic significance and the fact that payroll is the pulse of an organisation.
Senior payroll leaders bring the cross-functional experience needed in a Chief People Officer. Possessing deep ties to both HR and finance, and an inside understanding of the employee experience, payroll leaders are uniquely positioned to lead people functions at the executive level.