The days of calculating figures with pencil and paper and stuffing file cabinets with piles of paperwork are long gone. And good riddance (don’t fight me on this). Payroll is perhaps the most omnipresent business function in organizations because everyone wants to get paid. There’s no room for human error. It is also one of the largest business expenses, with wages equating to an average of more than 60 percent of total business costs. In theory, the function of a payroll system is simple: You pay your people and distribute their contributions accurately and on time. The reality, of course, is much more difficult.
Payroll is subject to a variety of ever-evolving changes, from tax codes and distributions to bonuses and personnel changes. Fortunately, payroll was one of the first HR functions to fully embrace automation. Thanks in large part to technologically advanced payroll systems, most payroll departments are operating more efficiently, accurately and economically than ever before with help from artificial intelligence. So where does AI-supported payroll come into play?
Don’t call it a comeback! Artificial intelligence (AI) is set to disrupt the future of payroll once again. While automation relies upon cause-and-effect, true AI systems can interpret data and leverage it to make decisions, learn from previous mistakes and strategically solve problems. Recent reports from the Bureau of Labor Statistics indicate that demand in this space is booming. In 2018, the global cloud-based payroll software market was valued at approximately $7.8 million and is expected to generate around $13.3 million by 2026, at a CAGR of around 6.8 percent between 2019 and 2026.
Considering payroll’s significant impact on the bottom line, it’s no surprise that business leaders are increasingly looking to invest in sophisticated AI-supported payroll systems.
With new technology comes new opportunities. Let’s look at three ways AI and machine learning are primed to reinvent the future of payroll… again.
3 Ways AI and Machine Learning Reinvent the Future of Payroll
1. Reducing Human Error
Payroll processing relies on coordinating and managing massive data sets, all of which are subject to complicated and constantly shifting compliance rules. Fortunately, this is exactly where AI and machine learning tools shine. By managing procedural data and automatically applying compliance regulations, AI significantly reduces both the likelihood and severity of human errors while improving compliance performance.
AI-supported payroll also equips you with tools that can flag systematic issues by monitoring how data is collected and processed and offer strategies to improve efficiency.
2. Payroll Upskilling
As AI continues to improve payroll system functionalities, payroll professionals can seek valuable upskilling opportunities. Considering their data protection and compliance skills, your payroll staff may be prime candidates to assist with other data and compliance challenges. Less time spent manually inputting figures could lead to strategic sessions with other business functions:
- Employment law
- Human resources
- Diversity and Inclusion
By proactively seeking growth opportunities and stretch assignments, payroll professionals can reimagine how they interact with (and influence) other departments within the organization.
3. Predictive and Prescriptive Analytics
Despite payroll’s significant financial impact on an organization, it was often seen in the past as more of an administrative function than as a source of strategic insights. But most successful organizations now realize that analyzing payroll data is crucial to making meaningful, forward-thinking decisions.Predictive and prescriptive analytics are prime examples of how AI technology can help organizations maximize efficiency and growth.
- Predictive analytics forecast what might happen in the future based on current and historical data. Predictive models are often used to assist with finances, such as helping to shape budgets, generate inventory and cut down on unnecessary expenses. These tools could predict a manufacturing chain going over its payroll budget during the holiday season, for example, causing manufacturers to reevaluate production and seek creative solutions ahead of time.
- Prescriptive analytics can take this example one step further and actually suggest various ways to solve the problem — and show the potential implications of each option. Payroll professionals can manipulate their data to model countless payroll scenarios in a macro-, enterprise-level scenario modeling engine that produces different outcomes, learns from them, re-runs them and ultimately helps guide informed decision-making.
With AI-supported payroll, organizations can feel confident that data is protected, preventative measures are in place to avoid human error and the opportunity for growth will be maximized.
Ready for AI-supported Payroll?
At Quanta, our deep knowledge of important payroll concepts allows you to breathe easier knowing the future of your business is in qualified hands. Contact us today and let our certified payroll specialists assist you in preparing statements, processing payroll, distributing pay, ensuring compliance and reinventing the way you run your business.