46% Indian Firms Link Pay To Financial Wellness

65% say managing compliance risk is very challenging, reveals ‘The Future of Pay Report 2025’ by ADP

Managing Director of ADP India and Southeast Asia, Rahul Goyal

FinTech BizNews Service

Mumbai, February 28, 2025: As India's businesses maintain steady economic growth, prioritising employee financial well-being has become a key focus for HR and payroll departments in 2025. According to the "Future of Pay in India 2025" report by ADP, a leading global technology company specialising in human capital management (HCM) solutions, 46% of organisations in India have identified the expansion of financial well-being programs to better support their workforce as their top priority this year. 

The report highlights that growing economic pressures and evolving employee expectations are prompting organisations to rethink their approach to payroll. Financial stress is increasingly recognised as a major factor impacting employee productivity, engagement and retention. More than half of surveyed business leaders (55%) acknowledged financial stress reduction as a key area where payroll systems can positively influence employee experience. 

Managing Director of ADP India and Southeast Asia, Rahul Goyal, said, “Financial well-being is not merely about increasing pay; it is about empowering employees with the right knowledge and tools. Ensuring employees understand financial, tax and payroll processes when joining the company fosters long-term financial security. Regular coaching and education sessions can further build confidence and enable employees to make informed financial decisions.”

Other key findings from the report:

• Financial well-being as a strategic imperative: Companies are adopting flexible pay models, salary-linked financial support and personalised benefits aligned with employees’ life stages. Nearly one-third (30%) of organisations are introducing flexible pay models as the workforce demands more financial flexibility, such as performance-based compensation and access to loans.
• Compliance complexity: 65% of payroll leaders say avoiding compliance risk is very challenging. Payroll teams are under mounting pressure to navigate evolving tax structures, multi-state or cross-border regulations, and the upcoming wage code reforms, prompting a shift towards automated governance frameworks and payroll technology solutions.
• Payroll modernisation: Organisations are investing in modern payroll technologies to enhance efficiency, enhance data integration and ensure data security and privacy, recognising that payroll holds critical employee data. Employees now expect a user experience comparable to consumer-grade standards, complete with advanced features and functionalities to help them navigate the ever-changing compliance landscape.  

However, 30% of organisations cite scalability and customisation challenges, while 28% identify high costs as barriers to widespread adoption. Consequently, only 12% of organisations report having a payroll function fully equipped to support future workforce demands. 

Goyal continued, “The conversation around payroll has shifted—today, it’s no longer just about getting salaries out on time but a key touchpoint of employee well-being, business agility and trust. As organisations navigate increasing regulatory complexities and workforce shifts, leaders must rethink traditional processes to stay ahead. 

The findings from this report underscore an urgent need for businesses to modernise payroll systems, not just for efficiency, but to enhance compliance readiness and meet rising employee expectations. At ADP, we aim to equip organisations with actionable insights and technology to transform payroll into a strategic advantage in this fast-changing landscape.”

The annual survey, conducted in collaboration with People Matters this year, gathers insights from over 300 HR, payroll and finance leaders on how Indian businesses are evolving their payroll strategies to meet workforce demands. To download the full report, please visit here.