How AI and Automation Are Transforming the Payroll Industry
Hannah Stewart from The Payroll Advisory is currently undertaking the Developing AI Strategy course delivered by RMIT Online. We have made this investment for our team to develop TPAC’s own AI strategy and to become knowledgeable in this rapidly growing field. We want to understand what the future of work may look like, and what innovations lie ahead in payroll.
We anticipate change will be coming, but it may be a double-edged sword of efficiency over accuracy - or it may deliver significant improvements in both fronts.
Traditionally, payroll processing involves manual data entry, complex calculations, and a user-based understanding of where to find answers and to transact payments correctly. These tasks are often time-consuming and prone to human error.
AI and automation have the potential to transform these processes by streamlining them, reducing errors, and saving time. In our limited knowledge of AI currently, we have initial hesitation, particularly around if it based off learnt behaviour, therefore replicating existing errors.
Enhanced Employee Experience
We see significantly enhancing the employee experience as one of the biggest benefits in AI and automation. We understand several of our clients, specifically in HRIS and employee interactions, are adopting AI tools and projects ahead of their time.
TPAC believes when utilised, chatbots are also an enhanced feature that can quickly solve base-level payroll enquiries, benefiting employee experience and reducing the time payroll staff spend answering repetitive questions. We see many benefits in exploring AI in this area but are also interested in understanding how data privacy interacts with AI legislation.
Payroll Technology Providers
We welcome Payroll Technology Providers to weigh in on the AI conversation, sharing their strategies and value gains planned for their payroll platforms. Is there benefit in payroll platforms being completely rebuilt with logic that AI can deliver? Is it a strategy that we see changing the game in the next 5 years?
DSP interactions with Government and Statutory Authorities
Not much has changed in the last 20 years with the lodgement of Superannuation (although from Cheques to EFT is probably one of them), to lodging Payroll Tax returns on multiple platforms in different UI experiences, to STP lodgements and MyGov.
This leaves us with some questions:
Is AI being a key driver for the way we communicate upstream and downstream on payroll related transactions?
To banks, to Services Australia, connecting data pathways and applying smarts on repetitive tasks?
Changing some of the smarts to routine tasks, checks and balances may be where true value in AI may sit?
How will auditors cross check your AI tool’s work?
We think a clear path of transparency will need to be evident for government and statutory authorities to mass-adopt AI – but will there be investment made for this?
Microsoft Tools of the Future?
A real benefit to payroll would be performing repetitive tasks in commonly used platforms such as Microsoft Excel, Word etc. Ideally, it would design and predict data requirements to reach reporting outcomes. Imagine that?!
Looking ahead
We think it will be a long time before a payroll professional will be replaced by an AI tool. We believe the success of this innovation will come when the focus of the role can be more analytical, taking us away from tedious routine and highly transactional activities.
As great as it is, AI lacks depth of perception, reasoning, and judgment. There will also be a steep learning curve in developing trust with AI with financially sensitive tasks, especially amongst those unfamiliar with the machine learning.
The role of the payroll professionals will indeed change, but as technologies advance, new opportunities will emerge. Does your company have an AI strategy in place? We would love to hear from you.
We look forward to providing further thought pieces as our own TPAC knowledge increases in this space.