AI Powered Payroll Processing Is Here to Stay

By 2030, Artificial Intelligence will power over 60% of payroll systems, a payroll expert said on May 7.

To fully take advantage of the major changes underway, payroll professionals must have a real understanding of what’s coming down the pipeline, said Michael Francis, director of global payroll for SBA Communications.

Demystifying AI

Within the next six years, most payroll systems will be powered by AI, but to what extent? “We’re not sure,” said Francis, speaking at the 42nd Payroll Congress in Nashville. The most important step in embracing AI is to first demystify many of the inaccuracies we associate with it, he said. “The very dystopian and apocalyptic representations of AI put us in a position where there’s no trust. We must go beyond the science fiction narratives.”

The desire to correlate AI with a near dystopian future leads many to overlook many of AI’s most practical applications.

While many professionals fear AI will replace human jobs, “the reality is that [AI] will help ease payroll processing,” said Francis, automating repetitive tasks and allowing payroll professionals to focus on strategic and value-added activities. “When payroll departments aren’t heavily inundated with menial tasks, it affords them the time to strategize, while adding a personal human touch,” he said.

Employees are often hesitant to embrace AI out of fear that it compromises much of the accuracy and reliability required in payroll processing. However, AI can greatly help enhance accuracy by reducing human errors in data entry and calculations, Francis emphasized. He encourages payroll professionals to instead see artificial intelligence as augmented intelligence.

Artificial or Augmented Intelligence?

Artificial Intelligence is often thought of as a replacement for our own capabilities, mimicking human intelligence and eventually leading to displacement. On the other hand, augmented intelligence helps support human capabilities, a partnership model that emphasizes collaboration and support over replacement.

Payroll processing relies on large amounts of data, requiring professionals to handle daily decision making while ensuring compliance with the latest payroll regulations, many of which are littered with nuance. AI can enhance decision making by swiftly analyzing data and streamlining processes, enabling payroll to make decisions grounded in accurate information, said Francis. “Real time processing can facilitate quick responses to payroll challenges and opportunities.”

It can also enhance employee and customer experience within payroll by aiding in the delivery of tailored recommendations. Francis highlighted many of the use cases for AI in payroll, such as streamlining employee onboarding or payroll inquiry management. AI can act as a first contact for employee payroll inquiries, offering instant responses to common questions, he said. It can also be used to clarify payroll policies and regulation within the payroll department, ensuring all employees are up to date with current practices.

The payroll profession is going to continue to grow, Francis said, and “for now, without human interaction, AI is useless.” Payroll processionals are still needed, he said, “it’s just a matter of whether or not we take advantage of understanding AI’s impact on our work.”

The payroll professional is undergoing a pivotal shift toward greater efficiency and precision, all made possible through the synergy between artificial intelligence and human expertise, said Francis. And we must all embrace the change, he said, because “AI isn’t going away.”