Payroll might have an out-dated reputation as a quiet back-office function, but in reality, it’s a prime target for cybercriminals. With access to sensitive employee data and financial flows, payroll systems are a goldmine for hackers, and the stakes have never been higher.

Recent incidents show just how exposed payroll teams are: from global HR service providers losing passports and national insurance numbers to Ministry of Defence contractors compromising hundreds of thousands of military personnel. These attacks disrupt payroll, cause operational chaos, and can cost millions.

Will Jackson, CEO C2 Risk, opened the Reward & Payroll Insight session Cybersecurity in Pay & Reward by highlighting these recent high-profile cyber incidents.

As payroll teams, with extensive access to personal and financial information, are prime targets for phishing and social engineering attacks, Will emphasised the importance of Micro-training and interactive simulations (like cyber “escape rooms”) to build awareness, as well as regular refresher training, rather than annual tick-box exercises and enforcing multi-factor authentication (MFA) and proper password hygiene across all systems.

A live attendee poll in the session revealed that while most teams had received cybersecurity training in the last six months, some respondents were unsure of the last formal training, highlighting gaps in awareness.

Even with robust systems, weaknesses often come from third-party integrations or unpatched software. Will stressed the importance of distinguishing between providers that genuinely prioritise cybersecurity versus those merely “checking compliance boxes.”

Will advised conducting scenario-based fire drills for payroll teams, including worst-case timing (e.g., during payday), testing business continuity and disaster recovery plans regularly. He also emphasised having clearly define roles, escalation paths, and pre-prepared communications for employees and stakeholders.

The message was clear about bridging payroll with IT and cybersecurity teams to make security a shared responsibility. Cyber incidents don’t follow a payroll calendar. They can hit at the most critical moments, requiring rapid, well-coordinated responses. Preparation saves time, stress, and money when the worst happens. The session also highlighted that cyber preparedness is not just about avoiding risk but ensuring payroll continuity and maintaining employee trust.

Will encouraged organisations to assume worst-case scenarios, trust no single system, and embed cybersecurity awareness as a fundamental part of payroll culture.

Payroll security is no longer optional. It’s a strategic imperative that protects both people and business continuity. Organisations that embrace it proactively will reduce risk, safeguard trust, and build resilience in an increasingly hostile cyber landscape.

The cost of downtime, manual payroll fixes, and reputational damage is immense. Payroll leaders must advocate for budget and investment in cybersecurity, not just for compliance but to protect the organisation and its people.