Increasing Payroll Efficiency With Technology

The payroll industry is witnessing a paradigm shift from a paper-based payroll system to an automated, electronic process, powered by various emerging technologies, an industry expert said May 13.

With the acceleration of technological advancement, payroll professionals must take advantage of the increased efficiency, flexibility, and productivity that automation, artificial intelligence, and application programming interface offer to streamline the payroll process, said Sammy Molinaro, director of solutions consulting at CloudPay.

Molinaro spoke at the 2025 Payroll Congress in Kissimmee, Florida.

The traditional paper-based payroll systems are not only time-consuming but can also lead to errors that affect employee satisfaction and compliance, Molinaro said. Transitioning to an automated payroll system, using APIs and AI, represents a significant leap forward in enhancing payroll performance, he added.

Embracing technology in payroll processing is not just a trend but a necessity to achieving high-performing businesses, he added.

“Change is not easy. There is still a lot of skepticism around AI adoption, including the fear of job loss and data breaches; however, payroll professionals need to adapt,” he noted.

AI will not replace payroll professionals, except those who remain stagnant, Molinaro said. “If you reject technological advancement, you will be left behind,” he added.

“Technology is an enabler, not a replacement,” Molinaro said. Payroll professionals still need to perform their tasks, but they must leverage technology to make payroll processing easier, faster, and more efficient, he added.

The Three A’s for Achieving a High-Performing Payroll

Automation is the root of technological advancement in payroll, Molinaro said. While automation has been around since the 19th century, it has evolved, driving efficiency and productivity in payroll processing, he continued.

Automating payroll processes reduces the time spent on manual calculations and data entry, allowing payroll professionals to focus more on strategic initiatives than routine administrative tasks, he added.

With built-in compliance features, automated payroll systems minimize human errors, promote and enhance data security, and ensure that payroll adheres to the latest regulations, Molinaro said.

APIs play a crucial role in integrating various payroll systems, Molinaro continued. “It is the strongest vehicle for integration,” he continued. API facilitates real-time data exchange between payroll systems and other business applications, increasing flexibility, efficiency, data consistency, and quicker decision-making processes.

AI is revolutionizing the payroll landscape by enhancing processes with advanced analytics and predictive insights, Molinaro said. AI algorithms can analyze historical payroll data to forecast future payroll costs, helping businesses budget more effectively.

AI has evolved, progressing from reactive task-based AI to interactive limited-memory AI, and now to generative AI, which mimics human interaction to generate content, Molinaro continued. The future of AI is focused on developing “theory of mind AI,” which incorporates emotional intelligence to achieve desired outcomes, he continued. Payroll professionals need to embrace these transformative technologies rather than see them as a threat, he emphasized.

While there are growing concerns about AI adoption relating to data safety, incorporating AI into payroll processing might not significantly change the way data is protected within an organization if it is deployed in a compliant way and is limited in its access to data and the ability to make decisions, he said

Key Takeaways

Automation, APIs, and AI complement one another and can be leveraged to enhance payroll productivity, Molinaro said. “Don’t be skeptical and hold on to outdated processes,” he continued. Rather, adapt, learn, and be ready, he added.

Payroll professionals should invest in learning more about how emerging technologies can be leveraged to enhance payroll processing, Molinaro continued. AI trends and automation should be investigated and analyzed to determine their value to the payroll process, he said.

By investing in these modern solutions, organizations can ensure that their payroll systems are not only efficient but also strategically aligned with their overall business goals, he said.

“Don’t be left behind,” Molinaro concluded.