Last week we introduced the first of a two-part series looking at just how well AI might be suited to a particular HR task.
To kick-off, we first looked at the suitability of AI in workplace investigations.
This week, we apply the same questioning mindset to looking at how well suited AI is to payroll.
Does it have the power to really transform mundane tasks (this premise sounds good), or does it lack the human eye to spot when things might be going wrong?
To help us, we spoke to George Dunnett, chief product officer at Zellis.
Here’s what he had to say:
Q: What is the potential for AI when it comes to payroll?
A: “Accurate payroll is – and always has been – a critical function for employers. Get it right and no one notices. Get it wrong though, and employees may miss payments and not be able to fund their family expenses. Cue loss of both productivity at work and loyalty to the employer. This is all the more important as employees are in the midst of high cost-of-living. Employees now expect their employers to not only pay competitively but also to take more care of their financial wellbeing. There’s no shortage of research showing how important this has become. The integration of AI into payroll opens new doors on this debate and presents multiple benefits for employees and payroll professionals alike. Perhaps the greatest of these is the ability for AI to assure people on all sides; a helping hand that supports human expertise for the benefit of people and business.”
Q: Has AI really got what it takes to quell fears that mistakes might still happen?
A: : “AI has the potential to act as a powerful virtual assistant, reducing administration, improving accuracy, and providing greater peace of mind with regards to compliance. When it comes to accuracy, it’s true payroll mistakes are rare, but for accuracy-obsessed payroll managers, even one error in a workforce of 10,000 is still one too many. Errors are literally the stuff that payroll nightmares are made of, and it’s a genuine source of stress for those who carry the responsibility of getting it right. This is where tech-enabled anomaly detection can help payroll teams to reduce the potential for human error and catch mistakes much earlier in the payroll cycle. Underpinned by AI, anomaly detection will go even further this year: comparing an employee’s payslips over time and flagging, for example, when it ‘thinks’ a duplicate payment has been scheduled or an erroneous zero added. Alongside this, AI will work behind the scenes to cross-reference information with known data points such as date of birth, creating an even stronger line of defence against errors or fraud. This is the level of visibility that busy payroll teams could once only dream of, except it’s now a reality, and it marks the dawn of a new era for payslip consistency and confidence.”
Q: Are there assurance issues too?
A: “We already know that adding to the pressures on payroll teams is the complexity that comes with legislative change and the need to remain 100% compliant. This is no mean feat given the pace of legislative change has nearly matched that of technology lately, but AI is expected to play an increasing role in these terms too. Throughout the course of any one year, payroll teams typically encounter changes relating to the minimum wage or pension contributions. It’s an ongoing part of the job but it adds workload and creates complexity, not to mention the risk of hefty fines for non-compliance. By leveraging technology (including, but not limited to, AI), to automate these changes in line with all necessary rules and regulations, payroll managers can ensure compliance without the need for manual effort. More than just reducing workload, however, this automation will also enable payroll professionals to rest easy, safe in the knowledge that they are completely compliant – and that’s invaluable.
Q: Apart from fewer errors (in theory), will employees see any benefits?
A: “Looking at this topic through the employee lens, and against the backdrop of a tough economic climate, AI-integrated payroll offers tangible and timely benefits. AI can support the financial literacy and thus confidence of employees by helping them to better understand their pay and benefits, and herein lies the real game-changer. Interactive payslips and chat interface technology will enable employees to access an explanation for every element of their payslip, whether it’s net versus gross pay, student loan repayments, tax codes, or pension contributions. In the near future, it will be easier than ever for employees to track exactly when and how much they will be paid, and all while accessing instant support, in their preferred language, from a virtual payroll assistant.”
Q: Given all this, how soon are companies likely to implement AI into their payroll?
A: “We are now past the initial excitement kicked off by the late-2022 launch of ChatGPT and are into the hard work of turning the promise of AI into reality. AI-assisted payroll is already beginning to enhance self-service, speed up payroll processing, drive greater accuracy, and improve compliance. Research suggests that financial wellbeing tools can reduce employee payroll queries by up to 40%, creating significant time and cost savings for the payroll team. AI will provide further assistance by automating the inescapable data entry required to onboard and manage a workforce, and reducing the administrative burden that prevents payroll teams from spending more time on strategic initiatives. The upshot? Better experiences across the board, and more efficient operations that feed directly into the business bottom line.”
Q: So it’s a case of watch this space?
A: “Yes. It’s worth remembering that when we don’t understand something, there can be a natural (albeit counterintuitive) tendency to ignore the issue rather than ask for help. The fact is though, that most employees don’t understand their payslips, and by extension, they are often are unwilling to ask HR for clarification. AI has the potential to drastically reduce this figure and increase financial literacy across the board. This is where new technologies are making a genuine and positive difference in payroll. Remember, while employers cannot often control external sources of financial stress, they can support their employees by leveraging the right tools to improve financial literacy, encourage good behaviours, and cater to the all-important need for clarity.