How standardized payroll models reduce operational risks in pharma

Payroll risks in pharma can be controlled with standardized models, and real case studies show how it’s done.

In brief:

• Complex and inconsistent payroll systems in pharma create significant operational and compliance challenges.
• Building a standardized, scalable payroll model enhances control, transparency and risk management.
• Practical case studies illustrate successful payroll transformations into driving efficiency and regulatory compliance.

For many organizations, payroll has quietly become one of the most complex and fragile parts of the business. There are multiple initiatives driving digital transformation with a focus on Human Resource Information System (HRIS) but somehow, payroll gets pushed under the rug. Especially in global companies, payroll is often a patchwork of outdated systems, local vendors and manual fixes. HR and finance leaders know the pain well. Too many inputs, too many exceptions and too much time spent firefighting. And due to its complexity, the general perspective on payroll remains: “don’t fix it if it isn’t totally broken.”

Manual interventions in payroll increase the risk of non-compliance and reporting standards. Leaders are stuck managing inconsistent reporting, fragmented systems and are highly dependent on individuals resulting in growing operational risk. These factors may delay decision-making and create vulnerabilities when personnel changes occur, or new markets are introduced.

In a sector like pharmaceuticals, where precision and compliance are non-negotiable, these gaps are not just inconvenient, they are risky. And as companies scale across markets, the cracks in payroll only get wider. Replacing systems alone may not address these issues; it is also necessary to establish structures that make payroll more reliable and scalable.

For CHROs and CFOs, the objective extends beyond just improving payroll execution. They need control, standardization and the ability to make decisions with trusted data. This article highlights where the real issues sit, how they show up across HR and finance, and what a practical path forward looks like.

Identifying payroll gaps that increase risk for pharma employers

Payroll has grown into something far more complicated than just paying people on time. It's linked to compliance, data accuracy, risk exposure and how well your company scales across borders. However, most payroll setups haven’t kept up, and here are some issues that need to be addressed:

Disconnected systems and inconsistent inputs: Payroll depends on accurate inputs, but in most organizations, those inputs come from too many sources: timesheets, local HR tools, manual files and legacy platforms, and none of them are in sync. Hours in spreadsheets, updates in emails, and variations by region lead to errors, delays and a constant need for fixes.

Excessive dependence on key personnel: Essential payroll functions are frequently managed by a limited number of individuals, typically without comprehensive documentation or designated backups. Most of these payroll professionals are nearing retirement and prefer traditional working models. When these people leave, teams scramble to figure out what’s missing. This makes it nearly impossible to scale or transition smoothly.

No standardized reporting and limited automation: Each country, vendor or team generates reports in different formats. There’s no unified view of headcount, costs or compliance. Additionally, approval chains, data validation and calculations continue to be handled manually, which introduces operational risk and diminishes consistency. That’s a problem for CHROs and CFOs who are trying to plan, monitor risk or justify spend.

Ambiguous vendor responsibilities: Many teams lack clarity regarding the specific roles and obligations of their payroll vendors. This absence of defined accountability can result in overlooked service or compliance issues. As organizations expand organically or undergo acquisitions, existing models may not adapt effectively, and approaches that succeed in one region may not be suitable for another.

Compliance risks across regions: In regulated industries, keeping up with local tax laws and labor regulations requires continuous attention. The absence of in-country vendor support and a structured compliance model can increase the likelihood of unintentional errors. Payroll data contains sensitive information and lacking suitable procedures and tools may lead to data breaches or issues with regulatory compliance.

Absence of a scalable model for M&A: Payroll functions have developed independently in different regions rather than being designed as a unified global process. As a result, there is variation in operations across regions and no standard structure for improvement. When companies expand into new markets or integrate acquired teams, they inherit new systems, vendors and processes. Without a global operating model, each addition can increase fragmentation and risk.

Fixing payroll challenges through process and structure