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Artificial Intelligence Can Drive Payroll Process, Expert Says

June 4, 2020, 2:07 PM

This may sound like a payroll professional’s dream: a system that automatically flags anomalies in time tracking, finds patterns in employee absences, generates smart audits that can spot potential problems, and recommend steps for better compliance.

But give it a few years, and those functions could be reality, said Rahul Lakhanpal, product marketing manager at Workday, a provider of computer cloud applications for finance, human resources, and planning.


Smart payroll, powered by technology, is going to let companies make smart choices that will make them more agile and more productive, Lakhanpal said June 3 at the annual American Payroll Association Congress, which was held online because of the coronavirus outbreak.

The power behind smart payroll--artificial intelligence (AI), machine learning, and deep learning--has become familiar to consumers in products such as Alexa, Siri, chat bots, and smart cars, and is not cause for intimidation, Lakhanpal said.

Embrace the change, Lakhanpal said, adding that regardless of how these applications function, employers will always be in charge of making the decisions. The technology enables companies to make smarter decisions and move payroll teams to the driver’s seat from the back seat.

“It’s going to help you gain that control, that flexibility, and that insight you truly need and deserve in payroll processing,” Lakhanpal said.

As payroll evolves with available technology, enterprise AI will change businesses in ways companies cannot even imagine, he said. Digitization--a digital transformation in which all facets of a business are centered on intelligence--or what Lakhanpal called a fourth and future wave of payroll change, is where employers will want to be in two to five years, he said.

“We’ve only begun to scratch the surface of machine learning and critical intelligence,” Lakhanpal said.

But soon these changes would at least help unify systems, something that would relieve the burden on payroll, he said. For instance, over the next several years, employees could leverage that technology through what he called “conversational experiences” with their company’s payroll systems right in the digital spaces where they work the most, such as Microsoft Teams or Slack, Lakhanpal said.

But businesses need to be smart in planning for and implementing that technology, Lakhanpal said, adding that you cannot use a 30- or 40-year-old payroll system to truly leverage these changes.

To prepare what company systems would look like in the future, look at what your employer could gain or lose, said Tran Andrada, a presales manager, at Workday.

And as employers look down the road, they should know that AI machine learning is going to bring payroll to a strategic function from an administrative function, Andrada said.

“It’s so exciting to think about all the ways this technology can help us not only automate repetitive processes in payroll, but all process massive amounts of incoming data, increase your level of accuracy, and engage better with your workers,” Andrada said.

Once a company has a good understanding of the issues that its payroll teams face, it can look at which capabilities could provide solutions, Andrada said, adding that it is often helpful to perform an impact and feasibility exercise in building a business case.

Andrada also recommended that payroll professionals pull together from various groups that have a stake in payroll to form a team to investigate what a transformation could bring.

For instance: The payroll department is sitting on a mountain of data, how can the company better use it? How can technology help encourage better engagement with employees? What decisions could payroll adopt in the future?

And while technology and implementation costs are key, the cost of change management is important to consider as well, Andrada said.

And when finally making a case, tell a story, a solid summary that encompasses the facts and sensible estimates so employers can see what the future could hold with a smart payroll system, Andrada said.

To contact the reporter on this story: Georganne Coco in Washington at gcoco@bloombergindustry.com