New Research Warns of Possible Payroll Talent Shortage Amid Rapid Industry Change

New research from the National Payroll Institute and Deloitte Canada highlights succession risks, rising skill demands and the need to modernize payroll talent pipelines in Canada.

TORONTO--(BUSINESS WIRE)--Canada’s payroll profession is facing a tightening talent pipeline at a time when the role is becoming more complex, strategic, and technology-driven, according to new research from the National Payroll Institute, developed in collaboration with Deloitte Canada.

The Beyond Paydays: The Evolution of Payroll in Canada report found that Canadian organizations are under increasing pressure to attract and retain professionals who can combine technical knowledge with analytical and interpersonal skills to manage payroll. This creates growing succession and capacity challenges for organizations as Canadian employees depend on payroll professionals for the accurate and timely delivery of their pay – making payroll a critical function for trust and stability.

The findings point to a need for Canadian organizations to strengthen both talent and technology investment, including upskilling in areas such as cybersecurity, AI oversight, data storytelling and change management. As payroll takes on a more strategic role, employers that fail to modernize may find it harder to manage compliance, respond to disruption and support business decision-making.

“Payroll is no longer just a back-office function — it is becoming a strategic business capability, and the talent needed to support that shift is becoming harder to find,” said Peter Tzanetakis, President and CEO of the National Payroll Institute. “Organizations need to act now to build future-ready payroll teams with the skills to navigate AI, cybersecurity, compliance and change.”

The state of payroll in Canada and beyond

To understand this need for talent and technology as the payroll industry continues to evolve, it’s important to reflect on how far the industry has come. Payroll, previously seen as a back-office function, has shifted to become a data-driven contributor to strategic organizational decision making. From compliance oversight to workforce data and reporting, payroll now plays a key role in helping businesses make informed decisions and adapt to changing workplace demands.

However, there is still work to be done. While Canada’s payroll environment is regarded as one of the most complex among single-country markets, the report revealed that not all organizations are maturing at the same pace when it comes to integrating technology. Where many have moved towards cloud-based payroll solutions, HR-finance integration and automation, others continue to rely on legacy systems or manual processes.

Canada sits mid-pack in payroll maturity, with strong compliance rigour but lagging in digitalization, cloud adoption, employee experience-focused pay practices, and AI-enabled payroll. This signals that Canada has an opportunity to learn from leading markets and prepare for what might be next – including earned wage access, expanding pay transparency mandates, introducing real-time payroll reporting, accelerating cloud adoptions and further integration of AI.

The talent and technology gap: meeting the industry where it is

To support the Canadian payroll industry’s growth and competitiveness, there are two key areas organizations need to invest in: talent - including upskilling - and technology.

The report revealed that the Canadian payroll workforce is aging, with survey results and membership data from the Institute showing that the majority of respondents are over 45 years old. As this generational shift continues, organizations may face difficulties finding new talent with sufficient payroll expertise, leaving teams understaffed or under skilled and limiting their ability to create succession plans.

The findings also highlight payroll as a dynamic and rewarding career path for the next generation of professionals. As the role expands beyond transaction processing, payroll is creating new opportunities to develop expertise in technology, compliance, analytics and strategic decision-making.

Organizations and payroll professionals are also preparing for the continued impact of technology, with the report identifying the adoption of new payroll technologies and automation as the factor most likely to impact the role of a payroll professional (73.5%). This is followed by changes in government regulations and compliance requirements (61.4%) and greater emphasis on data security and payroll privacy (37.9%).

According to the report, key areas for payroll talent upskilling include cybersecurity, AI oversight, data storytelling and change management.

Where talent constraints persist, organizations have a greater opportunity to leverage automation and AI to enhance efficiency and enable payroll teams to focus on more strategic priorities.

“From our research findings, it’s clear that as payroll continues to evolve, organizations will have to invest in both modern technology and talent development to keep pace with changing business needs and support long-term success,” says Keegan Castrillo, Partner, Technology and Transformation, Deloitte Canada. “The future of payroll will require a combination of technology, adaptability and skilled professionals. Organizations that recognize payroll as a strategic, data-driven function will be better equipped to navigate change and respond to evolving workforce needs.”

The report emphasises that the path ahead will require effort, innovation, and continuous learning—modernizing systems and governance while investing in the skills payroll teams need to thrive in a more digital, data-driven future.

To access the full report and latest findings, please visit https://payroll.ca/beyond-paydays-the-evolution-of-payroll-in-canada.

About Beyond Paydays: The Evolution of Payroll in Canada

Beyond Paydays: The Evolution of Payroll in Canada provides an overview of the current state of payroll in Canada and its future direction. It combines literature reviews, interviews with payroll leaders, and a national survey of payroll professionals to identify best practices and emerging opportunities.

The aim of the report is to equip employers, payroll professionals, technology vendors, and policymakers with actionable insights to enhance compliance, efficiency, resilience, and employee experience, while highlighting the shift toward a more data-driven role for payroll in strategic decision-making.

The full report is available here.

For a limited time, the Payroll Benchmarking Tool is available to the public. Visit https://payroll.ca/beyond-paydays-the-evolution-of-payroll-in-canada to benchmark your payroll’s function, maturity, and future readiness against Canadian results and leading practices—then filter by size, industry and geography to compare against peers to help identify opportunities to improve. Available publicly until July 7, 2026 and then to National Payroll Institute members only.

About the National Payroll Institute

The National Payroll Institute champions payroll in Canada as being vital to the health of businesses across Canada by setting the professional standard of excellence plus sharing critical expertise. We provide the knowledge and resources that more than 45,000 payroll professionals need to realize their potential, 1.4 million employers depend on for the annual payment of $1.35 trillion in wages and taxable benefits, and that governments rely on to receive $469 billion in statutory remittances to fund critical programs each year. The Institute's designations are recognized as the gold standard for expertise and professionalism, and the only such designations for payroll in Canada.

Disclaimer

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.