If you tuned in for the launch of Zellis HCM AIR, you’ll know that renowned HR technology analyst Anita Lettink delivered a fantastic keynote on the intersection of AI in payroll, HR, and the future of work.
We were honoured to have Anita join us in London and we made sure to sit down with her afterwards to discuss the potential of AI in payroll, as well as the key things that people teams need to consider.
Here’s what Anita had to say…
How pivotal will AI become in the future-of-work? Have we even scratched the surface yet?
As an industry, we’re still trying to understand what AI means for the future-of-work and so we don’t yet fully comprehend everything that lies ahead. This is because with every new technology and innovation we expect it to make major changes to the way we live and work in the short term. What we need now is more creativity and imagination with regards to its long-term implications and benefits.
Where do you see AI making the biggest impact in payroll and HR over the next five years?
Many of my industry colleagues would say Gen-AI chatbots, and I don’t disagree. Bu,t given the sensitive nature of payroll and HR, I’d emphasise that we need to leverage this technology in the right way.
When you think about the importance of accuracy in payroll, for example, every query must be answered correctly to avoid the employee making a decision that harms their financial health – either now or in the future.”
Gen-AI is still very new and so it needs careful management, not least because a Gen-AI chatbot will always try to come up with an answer rather than saying “I don’t know”. Ensuring that any specific or complex payroll queries are directed to a human who has the expertise and knowledge to answer them correctly, is therefore vital.
That said, I believe the biggest potential for AI right now is in the back office where it can automate administrative tasks, creating more time for payroll teams to spend on strategic HR initiatives that provide business leaders with the critical insights they need to make the best people and compensation decisions.
What should people teams be doing to prepare themselves for the integration of AI?
Now is the time for payroll and HR teams to develop their position on AI, deciding how and where they’re going to apply it, and giving space for ethical considerations.
It’s important to align this with the organisation’s broader AI strategy in terms of what technologies to use, and how much experience needs to be gained before anything is put into practice.”
This is how organisations can ensure they have the necessary guard rails in place. Because payroll and HR decisions have a direct impact on people’s lives, leaders need to be especially cognisant of how and where they’re using AI, not least because the business could be held to account for any decisions made by the technologies it uses.
Similarly, when choosing a payroll or HR software solution, I always advise organisations to ask prospective vendors how they use AI and what guard rails they have in place. By asking this question, buyers can make a clear assessment on whether the vendor’s principles align with their own organisation’s.
Sticking with AI in payroll and HR…where do you see the biggest gains for employees?
There are certain circumstances in which an employee may find it easier to talk to a bot rather than a person. You can’t offend a chatbot by asking a tough question, for instance. And you can ask the same question multiple times without causing frustration so there’s definite advantages in that regard.
At the same time, though, the quality of chatbots is not yet where it needs to be when it comes to answering complex queries or questions that are specific to the individual. This will require more data and training, as well as an ability to identify fabrications. It’s something that goes back to my earlier point. We need to train AI to say, “I don’t know” and not come up with an answer at all costs.
As AI is used more and more for standard employee queries, the role of the payroll admin will shift towards managing the complex queries that bots cannot resolve. That relies on placing people at the centre.
Turning our attention to realtime payroll now, how quickly do you think this will become the norm?
If you were looking for a new payroll solution today, I’d absolutely recommend realtime payroll because it offers improved efficiencies and a better experience for payroll admins. It’s the new norm.
When we think about adoption rates, however, there are a couple of things that could slow this down. The fact that some companies still run on-premise is a barrier because switching to realtime payroll requires a modern, cloud-based infrastructure and therefore a migration. Secondly, payroll contracts typically run for five years. Unless there’s significant dissatisfaction, organisations will usually extend for another five years after that, irrespective of whether their provider supports realtime payroll or not. That scenario might also slow the speed of adoption.
Thanks so much for talking to us, Anita. Any final key thoughts?
Think of AI as an agent that can be assigned to data-intensive and time-consuming tasks. But view them as a junior colleague who needs to be watched closely, and who will require ongoing training and feedback.”
In other words, leave the complex, legislative components to the humans who have the requisite knowledge and communication skills to ensure the right course of action.
These competencies will only become more important as the adoption of AI gathers pace.
Our thanks to Anita for sharing her valuable insights on this topical issue.
Want to know how AI could raise your payroll and HR game?
Find out more about new Zellis HCM AIR here. Or contact our team to book a demo here.