I'm exploring SF and it seems to all run off legal name. We know this is a particularly difficult experience for a number of our employees for a wide range of reasons.
Can you exchange the legal name field for preferred name and can our connected payroll still make use of a separate legal name field?
So what you describe here does not have to be the case, its just the downside of how your system is configured.
By default the system commonly takes first name (+ middle name) + last name to generate a name. If your organisation has chosen to leverage first name as legal name, then commonly it will show a highly formal version of your first name. The preferred name field already offers some extra benefits, as you could leverage that in name formatting and you could use that in standard workflow notifications for instance. Name formatting further also provided you the offer to get a different setup of the name displayed in the search option (just not in all places in the system).
Recently, SAP had introduced general display name as a feature, which allows you to set the name in any given preferred format (such as preferred name + last name). Despite it having some limitations, you may wish to explore this: https://help.sap.com/docs/SAP_SUCCESSFACTORS_PLATFORM/534356acc0ab4b0e8977ebfb2eb432f7/ac31628b0f804...
Alternatively, you could also explore building an integration center integration, that syncs the preferred name to the first name field in the user data file. That will also resolve the naming in a lot of places in SuccessFactors. A full migration to the first name field is technically possible of course, but you may wonder if the downsides outweigh the benefits there.