Matt Hillier, EVP, Product at CloudPay
Like almost every other major business sector, payroll is undergoing a significant transformation, driven by the changing nature of employment models, alternative attraction and retention methods, and, perhaps most notably, the rapid rise of artificial intelligence (AI). But what does the potential of these advanced technologies mean for the sector and what other factors could impact payroll in the coming months?
Accuracy and efficiency
When it comes to payroll specifically, it would be fair to say that AI is still finding its role. There have been significant strides made in reducing friction in data movement and providing predictive insights, however as we all know, the sector – and the nature of payroll roles – places a premium on accuracy. Existing AI platforms are yet to reach the level of detail required for processes where precision is paramount. However, we anticipate that AI platforms will evolve to meet the high standards of accuracy demanded by payroll professionals and the sector as a whole.
One area where there is an unprecedented opportunity is to enhance efficiency. By automating routine, day-to-day tasks and managing the more complex areas of roles that have accompanied the evolution of payroll delivery, organisations can empower treasury and payroll teams to focus on their core skills and more strategic, human-led tasks. This shift will enable professionals to contribute more strategically to the organisation, providing value across the business. Equally, AI also has the potential to reinforce traditional payroll skills that may have taken a backseat. As technology takes over more routine processes, professionals can redirect their focus more toward expertise in country legislation, analysis, diagnostics, and pre-empting worker concerns. This shift may enhance the overall skill set of payroll professionals, making them valuable partners in organisational success.
In the short-term future, we anticipate more firms adopting AI initiatives such as data mapping, predictive modelling for payment funding, conversational AI for query responses, and innovative approaches to payroll validation and variance identification. These initiatives will simplify processes, enhance customer autonomy, and provide strategic insights for navigating challenges like forex movements.
New ways of working
Outside of traditional payroll activity, we have seen a major shift in recent years with the rise of new employment models such as employer-of-record services and digital nomad movements. These changes pose challenges for businesses and industries and require payroll to take a more central approach to workforce engagement. As a result, professionals are now faced with the task of expanding their services beyond the traditional scope and must adapt to diverse employment models. AI can assist in this transition by streamlining data movement, identifying patterns, and providing predictive insights, ensuring payroll teams can navigate the complexities of the evolving employment landscape. It can also aid firms with recruiting and retaining new payroll professionals to organisations. We anticipate more employers putting a greater focus on the importance of the ‘employee experience’.
AI can play a key part in the development of more robust talent pipelines; as the demand for skilled payrollers continues to rise, advanced technologies can help attract new talent by showcasing the exciting and evolving nature of payroll careers, which now includes cutting-edge technology, strategic decision-making and supporting hiring teams to identify more potential new recruits.
In addition, the integration of payroll with other areas of business, particularly HR, is growing in prominence. Businesses are increasingly recognising the value that the function can provide as a core part of a broader organisational solutions, and a growing number are looking to streamline processes and enhance collaboration between departments. AI plays a crucial role in this integration by providing insights and analytics that contribute to informed decision-making across firms and can aid improved synergies between departments and functions.
Upcoming risks
However, that’s not to say that the future of the sector is entirely problem-free. To avoid bumps in the road and as the use and power of AI continues to evolve, the payroll sector must actively participate in policy development, particularly in areas of data protection and appropriate use of information. Given the sensitivity of payroll data, establishing guidelines for the safe and ethical leveraging of AI technology is imperative. Payroll teams need to take a proactive interest in shaping policies that ensure the responsible use of AI in the sector if they are to gain from the best opportunities it can provide.
The year ahead is likely to bring both challenges and exciting opportunities for the global payroll sector and AI will play a pivotal role. Rather than stealing jobs and making swathes of the workforce redundant, firms are instead looking to gain from benefits including enhanced efficiency and an ability to improve integration between different business functions, enabling payroll specialists to act more strategically and focus on tasks better suited to human input. As businesses continue to recognise the strategic value of payroll and the vital role that AI plays in its evolution, the stage is set for a dynamic future where payroll professionals are empowered to contribute to organisational success in new and innovative ways.
