The Strategic Data Your HR Function Is Sitting On
There is a function in most organisations that touches every employee, every month, without exception. It holds more accurate workforce cost data than any other team in the building, it sees absence trends, overtime patterns, and pay equity gaps in real time, and it is almost never invited into the strategic conversations where that information would actually change something.
That function is payroll. In 24 years of placing payroll and HR professionals, I have watched this play out repeatedly. The relationship between payroll and HR has never really been built, and it is not because payroll cannot contribute at a strategic level. It is because nobody has been asking. I want to make that case directly to HR leaders, because it is your invitation to extend.
The Data Gap Worth Closing
When HR leaders talk about workforce analytics, the conversation usually lands on engagement surveys, performance data, and talent pipeline metrics. All of it is useful, but most of it is self-reported. Employees tell you what they think you want to hear, or what they are willing to say, and by the time a resignation is in the pipeline, the signal that could have prevented it has usually been visible somewhere else for months.
Payroll data does not behave like that. It is verified, it is immediate, and it is generated every pay cycle without anyone having to ask. When overtime in a department climbs for three consecutive months, payroll sees it before anyone else does. When absence shifts in a particular region or team, payroll captures it as it happens. And when benefits utilisation quietly drops or compensation drift begins opening pay equity gaps, payroll holds the evidence long before anyone files a complaint or a resignation letter.
Engagement surveys capture something payroll never will, which is how people feel about their work, their managers, and their future. What payroll adds is a layer underneath the sentiment, and when engagement scores drop in a team while overtime has been climbing in that same team for two quarters, those two data sets together tell a story that neither tells alone. That’s the combination HR leaders are missing. Not payroll instead of HR analytics, but payroll alongside them, verifying what the surveys suggest or revealing what the surveys do not reach.
Deloitte research has found that 69% of high-performing companies actively link payroll with business strategy,¹ which tells me the companies winning on workforce intelligence have already figured out that payroll is an intelligence function rather than a compliance one. The 2025 Payroll Profession Confidence Index shows that 57% of payroll operations now advise their organisations on strategic initiatives,² which means nearly half aren’t there yet, and in most of those cases the missing ingredient is not on the payroll side.
I recently interviewed Cole Napper, VP of Research, and Insights at Lightcast and one of the leading voices in people analytics, on my show The HR L&D Podcast. Cole told me that it was the organisations most willing to assess their workforce risks proactively that were the ones taking market share from competitors who do not, and that framing reshapes this entire conversation. Workforce intelligence is not HR hygiene, it is competitive positioning, and the richest, most verified, most timely workforce data in the business is already being generated every pay cycle by a team that is rarely in the room when the risk conversations happen.
The Question Worth Asking
Let me be fair to HR here, because I also appreciate that payroll has not always made this easy. For decades, the profession has been trained to report in operational language, the sort that deals in variance against forecast and compliance issues rather than strategic insight. So, when HR does not think to include payroll in planning, it is partly because the way payroll has historically communicated hasn’t given them a reason to, and the responsibility for closing that gap sits on both sides.
What tends to happen is this. HR does not include payroll in strategic discussions, so payroll does not raise strategic observations, and because payroll doesn’t raise strategic observations, HR assumes they don’t have any. It is a quiet loop that nobody designed and yet everyone maintains.
The shift does not require a restructure or a new platform. It starts with a different question, because rather than asking payroll whether the numbers are right, the more valuable conversation is to ask what the numbers are telling you. Those two conversations look similar on a meeting agenda, but the second is worth considerably more.
Bringing payroll into strategic HR conversations does not take much either. Invite the payroll lead into workforce planning discussions, ask for a payroll read on the retention data, and request a regular briefing on anything moving outside normal parameters, treating those observations as intelligence rather than reporting. Over time, that briefing becomes one of the most useful inputs HR has, because it is measuring what people are actually doing rather than what they say they might do.
Language matters too. A payroll professional who frames a workforce cost anomaly as a P&L risk rather than a payroll variance gets a different response in the boardroom, and HR leaders can help by asking questions that connect payroll insight to business outcomes. When a payroll team understands that their analysis of overtime patterns is informing a hiring decision worth hundreds of thousands, what they bring to the table shifts from reporting into advising.
The Opportunity Is Already There
HR leaders are under real pressure to make the business case for people decisions and to bring evidence to the boardroom that workforce investment is actually working. The most current, most granular evidence of workforce health is not sitting in your engagement platform. It is in payroll.
Closing that gap costs nothing, because it requires no new system, no restructure, and no budget request. What it requires is an invitation, a different kind of question, and the willingness to treat payroll as a source of intelligence rather than an expensive service function that reports upward. You don’t need to outsource judgment to close this gap. Include the right people in the conversation.
Start with payroll.
Nick Day is Founder and CEO of JGA Recruitment Group (www.jgarecruitment.com), host of The HR L&D Podcastand The Payroll Podcast, winner of the 2024 PayrollOrg Global Vision Award, and ranked #1 Global Thought Leader in Payroll and #10 Thought Leader in HR by Thinkers360 for 2024, 2025 and 2026. His book The Payroll Pivot: From Invisibility to Influence is available now on Amazon or at www.thepayrollpivot.com. Both podcast shows are available on major streaming audio and visual platforms including YouTube, Apple, and Spotify.
References
- Deloitte Consulting LLP (2020). Deloitte Global Payroll Benchmarking Survey. Sponsored by the American Payroll Association (APA)
- Tiliakos, P.A. (2025) Payroll Profession Confidence Index (PPCI) Report. Payroll Influences.
- Napper, C. The HR L&D Podcast (JGA Recruitment Group), episode 154, Published 20th May 2025.
