As India faces the highest payroll staffing shortage in the Asia-Pacific (APAC) region, artificial intelligence (AI) is emerging as a key solution to bridge the talent gap and modernise payroll operations, according to the “Potential of Pay 2025” report by ADP.
The survey said 75% of businesses in India report that their payroll functions are impacted by a shortage of qualified professionals, while 93% plan to expand their payroll teams, signalling a widening demand-supply imbalance.
The report, released by ADP – a global technology firm specialising in human capital management (HCM) solutions – underscores the scale of the challenge and the urgency to adopt transformative technologies. Conducted across multinational companies with over 1,000 employees, the survey draws on insights from senior payroll leaders operating in diverse sectors.
It said that the India’s payroll sector is under pressure as it confronts the most acute staffing shortfall in APAC. Alongside the headline figures, the report said that data quality and integrity are a growing concern, with 48% of respondents indicating it as a key area for improvement in the next two to three years.
Further, a lack of automation is also affecting payroll accuracy, as 38% of businesses cited insufficient automated processes as the most common reason for errors. In response to these challenges, nearly half of all surveyed organisations (45%) reported partnering with global payroll providers when entering new markets, in an effort to maintain compliance and improve efficiency.
AI is playing a pivotal role in transforming the way payroll is managed. The report finds that more than one in three (35%) Indian businesses view AI as the primary driver of payroll innovation over the next two to three years – the highest percentage among all APAC countries. Additionally, 68% of businesses are already integrating AI technologies to streamline workflows and reduce manual intervention.
“Payroll transformation is now a business imperative,” said Rahul Goyal, MD, ADP India and Southeast Asia. “With rising compliance requirements and talent shortages, investing in AI-driven automation and strategic partnerships with global payroll partners are critical. These solutions not only enhance payroll accuracy and efficiency but also elevate employee experience and operational resilience.”
The ADP report suggests that while the payroll landscape in India is evolving rapidly, the gap between available talent and operational demand continues to widen. Businesses are therefore turning to intelligent systems and global collaborations not just to address current issues, but to build long-term capabilities in a competitive market.