Artificial Intelligence

Artificial intelligence in HR and Payroll: Embracing disruption

09th Feb `18, 10:58 AM in Artificial Intelligence

Artificial intelligence applications are developing rapidly – and businesses are waking up to the potential of the technology…

Sandra Sommerville
Sandra Sommerville Contributor
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Artificial intelligence applications are developing rapidly – and businesses are waking up to the potential of the technology in HR and payroll.

In the first half of 2016, around £1 billion was invested in AI firms in the UK – with the expectation that the industry will boost the country’s economy by over £230 billion in the next 12 years. Similarly, in the US, 2016 saw over 550 startups raise around $5 billion in funding to incorporate AI as a core component of their services. The capabilities and usability of AI has developed dramatically over the past few years: today it helps us plan our schedules, calculate bills, compile shopping lists, heat our homes, and more. The technology is also becoming ubiquitous – with Amazon estimated to have its ‘Echo’ device in over 10 million homes, and Google’s ‘Assistant’ app now installed on over 2 billion devices.

HR & Payroll Applications

With such innovation and potential at our fingertips, it’s easy to see why business across the world are starting to take note of the commercial capabilities of AI. From delivering products to customers and clients, to enhancing essential internal processes, the ways in which AI might be useful to business operations are numerous. HR and payroll processing are two of the processes which might benefit most from the automated, algorithmic possibilities of AI tech – since both involve the coordination and handling of large amounts of data, and the need to navigate a spectrum of complicated compliance issues.

The proximity and interconnectivity of payroll and HR means that the role AI plays within both involves significant crossover. With that in mind, let’s explore ways in which AI tech is already playing a part in payroll and HR infrastructures – and how it is promising to dramatically change the way these processes are carried out…

  • Employee assessment: AI can be used to identify and assess characteristics and trends across an entire employee population, or narrow that focus to individual employees. From an HR perspective, this has obvious benefits: AI screening can quickly identify productivity issues or skill shortages, without the uncertainty and bias of human subjectivity. In payroll contexts, AI can be used to classify employees quickly and efficiently, and ensure the correct tax bands are assigned.
  • Interactivity: Client queries are a frequent occurrence in payroll and HR departments. To deal with these queries more efficiently online AI ‘chatbots’ are being used as a first port of call for anyone with an issue. With a standard of inbuilt conversational interactivity, chatbots can engage with more trivial employee issues using pre-programmed knowledge and resources, while sending more complicated cases on to human administrators.
  • Compliance focus: Both HR and payroll involve a heavy focus on compliance across a complicated, and constantly shifting, regulatory landscape. AI technology offers a way of managing the vast amounts of procedural data involved in HR and payroll in accordance with the similarly expansive list of compliance regulations applicable to both. The automated accuracy of AI reduces the inevitable ‘human error’ factor – dramatically increasing a business’ level of compliance performance.
  • Analytic potential: Beyond improving a business’ compliance performance, AI can also be used to structure and process its collected HR and payroll data – and identify systemic issues. AI analytics tools come with the capacity to explore a greater quantity of collected data than a human administrator ever could – and with greater accuracy. In both HR and payroll contexts, systemic AI analysis can be used to quickly generate strategies and solutions – and allow administrators to fine-tune both processes for efficiency.
  • Decision-making: HR and payroll processes involves numerous strict deadlines, and tasks which must be carried out across a complicated timetable. The presence of these deadlines means administrators work under constant pressure – and must often make important decisions quickly, with limited amounts of information. AI tools assist and speed-up this kind of decision making – offering payroll and HR teams insight into possible outcomes, and giving them a greater level of confidence as they approach challenges.
  • Recruitment & induction: AI algorithms streamline the recruitment process by identifying potential external candidates for vacant positions, conducting outreach, and processing applications with a much greater scope and efficiency than a human HR team. While it has a more immediate HR application, this aspect of the technology may also be used to streamline the similar process of inducting new employees into an organisation’s payroll system, or de-registering them when they leave.
  • Deep learning: Beyond the short-term collection and interpretation of HR and payroll data, AI brings a deeper level of analysis to both processes over the long term. ‘Deep learning’ is the identification of trends and inconsistencies within large amounts of data over long periods of time – which may be difficult or too subtle to spot from a restricted, real-time, human perspective. Through deep-level analysis of HR and payroll data, AI can be used predict future trends – and positively transform those systems in ways which might seem initially surprising to human administrators.

AI & Human Experience

AI technology is advancing at pace – and with it, come associated concerns over the elimination of human expertise in payroll and HR. Although experts don’t see the end of the need for human administrators just yet, it’s time for businesses to start thinking more carefully about the role they want AI to play in the workplace.

It goes without saying, HR and payroll are one of the most personal aspects of business – which means humans must remain at the heart of the infrastructure your organisation builds to facilitate those processes. Taking the time to understand AI, and the role you want it to play within your business going forward, is the best way to unlock its benefits – while maintaining the trust, expertise and experience that connects your payroll and HR departments to your employees.

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