The Drop in Payroll Talent & Why Outsourced Payroll Is the Future

Is the end looming for in-house payroll?

A worrying drop in payroll talent prompts this question, together with accelerating technology cycles and ever-complex compliance requirements. Will in-house payroll be sustainable as time goes by, or will companies need to turn to technology-enabled managed payroll services?

In this article, we share insights from global payroll expert Pete Tiliakos, gleaned from our podcast conversation.

The payroll talent crisis

One of the most pressing issues facing payroll today is a significant drop in experienced talent. According to global payroll expert Pete Tiliakos, who recently published the 2025 Payroll Profession Confidence Index, 70% of payroll leaders globally have over 11 years of experience, with nearly half having over 20 years of experience under their belts.

What does this mean, concretely?

It means that a large portion of the global payroll workforce is approaching retirement. According to the findings from this report, there might simply not be enough new professionals entering the field to replace them.

Pete Tiliakos notes that the rate at which new talent is entering payroll has “already [been] anaemic” and shows no signs of speeding up. This shortage is pushing organisations to reconsider whether maintaining in-house payroll teams is sustainable in the long run.

Compliance is getting more complex

Payroll has never been a simple affair, but it’s now more complex than ever.

2024 saw one of the largest global election cycles in history, with around 50% of the world’s GDP going to the polls. As Pete Tiliakos points out, the aftermath of these elections will usher in waves of new legislation and regulation.

New governments bring new rules, and with that comes a surge in compliance demands.

The result?

• Greater risk of error
• Rising administrative costs
• Greater strain on already overstretched payroll departments

For many companies, the solution is to seek help from providers that specialise in navigating this level of complexity.

Outsourcing isn’t what it used to be

It’s important to redefine what payroll outsourcing means today.

As Pete Tiliakos puts it, the traditional view of outsourcing as a way to “do your mess for less” is outdated. Instead, modern payroll outsourcing is about technology-enabled managed services, delivered by experts who live and breathe payroll, and who have made significant investments in innovation to stay ahead of the curve.

This shift allows companies to step into a “turnkey model” where the people, processes and technology are already in place. Rather than trying to build and maintain world-class payroll infrastructure in-house, a near-impossible task for most organisations (due to high costs, training, and time implications), businesses can now rely on partners that offer scale, coverage and agility.

Even the most advanced shared services models often lack global reach or the right technology stack. As Pete Tiliakos observes, many companies are still lagging in payroll and HR transformation, and they won’t be able to close the gap alone. Managed services not only fill those gaps but often fund themselves through the efficiencies and cost savings they deliver.

The rise of predictive payroll analytics

Another driving force behind the move to managed services is the explosion of payroll data and the ability to harness it for predictive insights. Kevina Takoordyal, Head of Operations at Africa HR Solutions highlights the importance of clean, and structured data gathered over several years. This enabled the Africa HR Solutions team to pre-emptively identify anomalies and even potential unethical spending patterns.

This wasn’t the primary goal of the service, but a by-product of the robust analytics capabilities built into the managed model.

“We’ve shifted 100% to predicting,” explains Kevina Takoordyal, noting the transition from basic behavioural analytics to proactive, data-driven forecasting.

This evolution:

• Enables better budgeting
• Detects payroll leakage
• Supports compliance

Pete Tiliakos echoed this sentiment, mentioning a conversation with a payroll leader in a massive organisation who was tackling “time leakage and errors” amounting to tens of millions in losses.

With AI and payroll analytics, these savings can often be enough to pay for the technology investment, making such improvements effectively self-funding.

A future built on people, process & technology

As innovation continues with its brisk pace, companies will face increasing pressure to find resilient, scalable solutions. The old approach of quick fixes or struggling with internal resources won’t hold. Instead, more businesses will opt for a holistic managed payroll model.

With the global payroll outsourcing market already expanding, all signs point to further growth as talent drains, compliance risks rise and the need for agile, predictive capabilities becomes unavoidable.

In the words of Pete Tiliakos, companies stepping into this new model “don’t have to worry about payroll anymore”, because it’s:

• Handled by experts
• Fortified by cutting-edge technology
• Delivering strategic value far beyond payslips

Outsourced payroll in lieu of in-house payroll isn’t a dream from the distant future. It is already a mainstay and will likely further expand its monopoly as the main way to access payroll services.

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Africa HR Solutions is a people-first, tech-powered payroll provider. We offer award-winning payroll solutions to businesses across 46+ African countries, with a focus on data protection through certifications such as ISO 27001.

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