Trends in HR and Payroll Technology: Automation in Payroll

Welcome to a series of blogs from Phase 3 discussing the latest trends in HR and Payroll technology. In the second part to this series I wanted to cover automation in payroll.

HR and payroll AI & automation will become commonplace

The first trend I’m going to discuss is Artificial Intelligence (AI) and automation in payroll. Payroll by its very nature is already in a system but it is an area of transactional processing in many organisations which does not engage with automated processes or AI – and don’t be fooled – just because something is in a system doesn’t make it automated. Many payroll teams still utilise vast amounts of paper and rely heavily on email and phone calls to receive transactional information.

If we look back over the past 30 years payroll automation has come a long way – from the days of green-screen applications, or even paper based P11’s. We now have payroll solutions which calculate pay quickly, allow advanced calculations and complex scenarios including pensions auto-enrolment and real time information.

Many payroll applications include some automation features, allow processes to be run in bulk/en masse and allow some automation in terms of scheduling activities to take place at a designated time in a prescribed order. Still, write out a list of the activities you have to complete manually each pay period and you will see the lack of automation in your processes.

The automation maturity journey is key to understanding where your business applications are:

Automation maturity journey diagram

ALSO IN THIS SERIES: Trends in HR and Payroll Technology – Performance Management is Being Replaced

Automation is the stage that many organisations are at. Automation is the technology by which a process or procedure is performed with minimal human assistance. For example, clicking the ‘calculate button’ on the payroll system is performing a task that a human would otherwise do manually. Automation in payroll is generally supported with workflows and with employee and manager self-service.

Robotics is largely focused on increasing the day-to-day efficiency and effectiveness of the payroll function, freeing up the workforce to analyse the increased level of data that becomes available as a consequence of automation. RPA means ‘Robotic Process Information’.

An example of robotics in action would be to complete missing data – for instance, if an employee entered their address but missed their postcode, the system could identify that the data is missing, search for the correction and apply it to the solution.

Artificial intelligence takes this a step further. The term artificial intelligence may sound scary and futuristic but we use it regularly in our day to day lives now. Artificial intelligence, sometimes called machine intelligence, is intelligence demonstrated by machines, unlike the natural intelligence displayed by humans and animals. A couple of real-life examples include the features in Gmail – where the system scans the email to give you some suggested responses, or when you start typing in google and suggestions are shown for what you may be searching for. The weakest form of AI means computers performing functions associated with human intelligence.

Examples that most of us have heard of are IBM’s “Deep Blue” chess player or your new desktop friend, Microsoft’s Cortana or Apple’s Siri. But in development now is AI that does not only what we do because we are intelligent, but in the way that we do it too and then more so. Applied generally, one type of machine could act like a human brain for more than one type of human functioning and it would not be limited to accepting the human brain’s conclusions.

Chatbots allow the HR and payroll team to provide instant, accurate responses to common queries. Automating the frequently asked queries frees up HR teams to personally handle the more complex queries. This enables them to respond and intervene quickly in sensitive situations. Examples of chatbots in action can be seen on many websites with virtual agents – simple queries like “do you have a table for four at 7pm tonight?” can trigger the bot to scan the application for the answer and present it to the chatter. In HR and payroll, questions such as “how much am I getting paid this month?” and “can I book annual leave for next Tuesday?” take the self-service applications one step further.

Implementing payroll automation in your business

Should you be worried if you don’t feel you have automation in your processes? In some ways I would say yes – as over-reliance on individuals to manage complex processes is never good, but if you have automation but not necessarily true AI at this stage, I wouldn’t be too concerned. Early adopters will pave the way for which types of AI employees like to interact with.

So, in the future, we may not be asking Alexa to run our payroll, but our payroll might know that a change has occurred to an employee and calculate itself.

If you are looking for assistance, as expert payroll consultants , we at Phase 3 are here to lend a hand. From HR training and payroll services to the implementation of HR systems and software, there are many ways we can help.

For more tips, news, and advice, make sure to visit our blog.

This blog series is written by James Proctor, Director of Consulting & Services at Phase 3.

Phase 3’s James Proctor

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