15 August 2024
AI in payroll
AI is shaping up to have a huge influence on how the modern business works, and payroll is no exception. How will AI change this critical business function? Let’s take a look.
Understanding AI in payroll
Payroll is one of the most important functions in any organisation. People come to work to get paid, and without a robust payroll department, that understanding can break down. Mistakes creep in, people get paid late, and resentment builds. Did you know that 35% of UK employees would quit if they were paid incorrectly just once?
As a result, despite often being dismissed as a purely administrative function, company payroll has had to keep evolving over the years. From shifting paper-based functions to digital, to engines such as real-time pay, new tech helps keep the function thinking strategically.
Artificial intelligence is where we use machines to mimic human thought processes. The scope of this technology is broad, but we’ve seen it used in process automation, machine learning and natural language processing.
AI in payroll will focus on predictive analysis, automated payroll processing (including data entry) and fraud prevention.
There are many benefits to bringing AI into your payroll function, including:
- Improved automation and efficiency due to the elimination of repetitive tasks like data entry
- Increased focus on strategic tasks
- Maximum compliance and accuracy due to reduced errors
- Better data analytics as AI finds it easier to notice patterns in big data
- Happier employees due to accurate payroll processing and ensuring they get a better understanding of their pay
How will this impact your payroll team?
A lot of people fear AI will take over their jobs, which can lead to a lot of anxiety. However, it’s important to emphasise that AI is not a replacement for human talent. Instead, it should be use as an assistant, smoothing over the parts of payroll and letting them focus on the big picture.
AI is capable of making mistakes, so having a team of experts to keep an eye on it and question its results is very important. You’ll also need to make sure it is compatible with your existing systems.
In the long term, AI will become a natural and integrated part of your team. AI will help reduce talent gaps in your team and improve the employee experience.
Expanding talent pipelines
Hiring people into people-based functions (like HR and payroll) has often been a big challenge for hiring professionals. Payroll in particular has something of an image problem, there’s a huge misconception that it is only an administrative role with no particular scope to build a career out of.
However, in reality, payroll can be incredibly complex, requiring a great deal of knowledge to master. Payroll professionals are passionate about what they do, especially when they're given the opportunity to excel and focus on the people they help and the analysis they generate. AI helps payroll professionals shine.
As the function continues to develop, the innovative nature of working with advanced technologies (including AI) can add some more appeal. The idea of working with the latest tech is a compelling one and shows how payroll can keep evolving.
As AI will remove a lot of the drudgery of payroll, professionals will be able to focus on interpreting data, actioning insights and having a real impact on the day-to-day functioning of the business and the employee experience. There’s a lot more scope for more engaging work.
Future trends in AI and payroll
AI is still evolving, so we haven’t come close to seeing the entirety of what it’s capable of. Keep an eye on technologies like natural language processing and advanced machine learning and how they integrate, as these will help grow the technology beyond its current limits.
We’ll likely see a greater focus on predictive analytics, which is where business try to predict what might happen next in the market. We’ll also see prescriptive analytics which makes specific actionable recommendations on these insights. AIs can be very good at processing huge swathes of data, making it easier for trends to be identified.
We’ll also need to see a smarter approach to protecting your payroll data. Payroll deals with some of the most sensitive data in any organisation, so it needs to be protected. AI is great at spotting unusual or unexpected activity, meaning it can shut concerns down very quickly.
Streamlining, automation and security. These are just some of the things that a payroll AI can support with. The world of global payroll could be on the cusp of the biggest change since the move to computers!
Want to see more about how payroll is changing? Don’t miss out on our national payroll week festival, where we’re covering everything from real-time pay to outsourcing. Check it out here!
