Payroll Should Embrace New Digital Technologies, Not Fear Them

New digital technologies, including artificial intelligence, offer several benefits for payroll professionals that outweigh the potential workflow disruptions associated with them, two industry experts said May 7.

A 2023 study by KPMG LLP found that over 72% of company executives prioritize investment in artificial intelligence in their workplaces, said Jay Conforti, Managing Director for KPMG LLP. Many companies plan to use other new digital technologies as well, including cloud software.

Businesses expect these new technologies to improve work experiences, meet organizational goals, and increase profitability, Conforti said at PayrollOrg’s 42nd Payroll Congress.

Employees who are unwilling to embrace them will be left behind in the payroll industry, added Jenny Baskerville, Human Capital Advisory Director at KPMG LLP.

“There are people who have been sitting at their job for years and years that are just really used to their technology,” she said. “They know where to point, where to click, they know where to go find their answers. And now it’s a much different environment.”

Although many payroll professionals are wary of digital technologies, those technologies can benefit the work experience of employees across their organizations, Baskerville added. For example, artificial intelligence can streamline the onboarding process for new hires and reduce the amount of questions that are commonly sent to payroll and human resources departments.

Artificial intelligence also analyzes payroll data that companies can use to make informed decisions on staffing and pay, she said.

“Nobody has better information for our leaders, whether it’s for mergers or acquisitions or labor,” Baskerville said. “It’s also enhancing data security.”

Company leaders should communicate with employees beforehand about the reasons why they are adopting new technologies, Conforti said. Informing employees can ease the implementation process and reduce concerns.

Once employees are informed, payroll organizations can start gradually introducing new technologies for specific uses, Baskerville said. Companies should incrementally incorporate digital technologies instead of completely overhauling their legacy software and systems.

“It’s not going to start out with us just throwing caution to the wind,” she said. “We have to be very thoughtful about those incremental opportunities and what is there today.”

Automating time-consuming tasks like payroll data entry is a good way to start incorporating artificial intelligence, Baskerville suggested. Alternatively, companies might want to use digital technology to improve their data security or detect potential fraudulent activity that could compromise payroll processes.

As payroll professionals begin using these new technologies, however, they should contact any vendors or third-party contractors to ensure that they do not disrupt their workflow, Conforti warned.

Gradually use of new technologies allows payroll professionals to evaluate the results and make necessary modifications, Baskerville said. They can identify which employees need training for the new technology and what payroll processes will need to be updated, for example.

Over time, payroll professionals and employees throughout a company will become knowledgeable on how to use the new technology through practical experience and company-provided training, Baskerville said. During that process, payroll professionals will develop skills in information technology and human resources that will augment their existing payroll expertise.

“We have to make a transition to being more holistic professionals and not just a person who does payroll calculations,” Baskerville said.