As we live in an era defined by technological advancement, artificial intelligence (AI) promises to potentially bring about the biggest changes of all. Its impact has already been seen in several major sectors, and other, more significant transformations are expected to follow in the years to come. But what role will AI play in a company’s payroll in the coming year and beyond, and what will it mean for global organizations in 2024?
The role of payroll
We can all understand that payroll services handle some of the most sensitive information held by businesses and therefore data security is a top priority. Businesses are almost always on the lookout for security threats and react to breaches after they occur. However, AI can help them anticipate problems by detecting and responding to them much faster than humans or existing technology. It can also provide additional security to organizational cyber defenses by strengthening potential entry routes ensuring only the right people can access relevant data – a relevant issue in a hybrid working world.
Roles within payroll functions often require data to be entered manually, which naturally leads to errors, as any task that relies heavily on human input can, even for those with a keen awareness of detail. However, AI can help solve this problem and provide higher levels of accuracy and efficiency. Some of the most repetitive tasks, such as data entry and basic calculations, can be essentially automated by these systems, reducing the risk of errors and saving valuable time. Teams can then focus on strategic aspects of work, such as greater collaboration with HR to support compliance management, data capture and employee engagement.
One of the major advantages of this automation is the speed with which it can process large amounts of data. With AI, payroll cycles can be shorter, allowing businesses to process payroll in real time. This not only improves operational efficiency but also ensures that employees receive accurate and timely payments.
New ways of working
The rise of new employment models like digital nomadism, alongside increasingly difficult legislative tasks and a complex compliance landscape mean that payroll must now take a more central approach to staff engagement. Internal functions and HR teams need to manage the complexity of these various models and AI can help by streamlining the movement of data and identifying areas for optimization and efficiency in a much faster manner than humans never could. Accurate and timely delivery of these solutions not only benefits organizations by potentially increasing their finances, it can also have a chain impact and improve recruitment and retention. On a broader level, several sectors are facing skills shortages and those that place a greater emphasis on the employee experience and can demonstrate a more modern approach to employee compensation could leapfrog their competitors when it comes to is about searching for the best talent.
Expand talent pools
Artificial intelligence also has the potential to help attract new talent to people-focused functions such as HR and payroll, which has historically been a difficult task for recruiting specialists. Perhaps it’s fair to say that payroll itself faces a somewhat outdated perception of what a role offers. However, HR teams can use the exciting and innovative nature of working with advanced technologies to attract more potential recruits into the field.
HR teams may also be able to harness the power of AI in payroll to predict workforce trends more immediately than in the past. By analyzing historical and real-time company data, AI can predict future staffing needs, helping employers better align their payroll strategies with business goals. This proactive approach allows for better allocation of resources, reduces financial waste and can improve workforce management.
However, it would not be accurate to say that a technological future is completely risk-free. For now, AI in payroll will need to be monitored. Yes, it’s more precise and efficient than ever, but at the end of the day it’s still about technology and, for now at least, there needs to be human involvement as well.
Human contribution
This means that one of AI’s most publicized risks, that it could steal people’s jobs, is far from being achieved. To leverage these technologies in HR and payroll systems, at least, still requires a combination of technology and human input to be used successfully at this time, especially in such a demanding field. precision.
Personally, I believe that payroll, HR and data specialists need to actively participate in AI-related policy development, particularly in the aforementioned key areas of data protection and legitimate use informations. These groups, along with all early adopter companies, will play a key role in developing policies that lead to responsible use of AI and mitigate potential risks.
AI will have a transformational impact in almost every area of life, but it has significant benefits particularly for the payroll function. However, employers and their HR teams will need to carefully balance its use and adoption with human input to ensure that the accuracy and standards so essential to the payroll function can still be met.
Matt Hillier is Executive Vice President, Products at CloudPay
