Payroll is an integral part of any business, but making sure that staff, clients and suppliers are paid promptly and correctly can be taxing.
Which is why HR, payroll and recruitment solution specialists Employment Hero asked Cint to conduct a survey in February 2024 of 1,000 payroll professionals across Australia and New Zealand.
The report – The Power of Automated Payroll – examined how increased usage of AI-assisted automation in payroll services has the potential to empower payroll professionals.
Payroll is a multifaceted, complex set of interlinked systems that plays a vital role for organizations and this comes with headaches. Is an increased uptake in automation and AI assistance the solution? Thanks to the data gathered by Cint, Employment Hero was able to produce a report exploring how potential changes to payroll services could impact on enterprises in Australasia and beyond.
Current complexities
Finalizing even a single pay run isn’t as simple as it might seem to employees outside of the department might assume. In fact, 73% of Australian pay runs take longer than one day to finalize while in New Zealand the number rises to 84%.
A variety of factors are in play here. The biggest challenges facing Australian payroll professionals are troubleshooting payroll errors (33%), chasing clients for payroll data (31%) and complex legislation (29%).
For staff in New Zealand, collecting company software requirements is seen as the primary pain point (32% of respondents selected it as their top challenge) with chasing clients for payroll data (32%) and training on payroll systems (32%) providing notable difficulties within current systems and workflows.
Looking at the data Cint procured on behalf of Employment Hero, there’s evident desire for change in the sector and the majority of those questioned (81% in Australia, 73% in New Zealand) are firmly of the belief that the use of AI as a tool for automation will increase in their organization over the next 12 months.
What do we talk about when we talk about automation and AI?
Ramping up investment in AI-assisted automation seems to be an attractive proposition for payroll professionals: the thought of implementing automated systems was found to be an appealing one for 89% of those surveyed in Australia and 79% in New Zealand.
That’s all well and good, but what would actually happen as a result?
The idea is that using AI will cut back on hundreds of manual hours of work a year, theoretically leading to better optimized workflows for those payroll teams with the ability to invest in the necessary tools to bring about an increasingly automated near-future.
Employment Hero’s report indicates that AI could be of real use by assisting with:
- Automation of routine payroll tasks
- Providing enhanced accuracy and compliance
- Offering greater data analysis and predictive insights
- Improved time and attendance processes
- Contributing to improved employee experience and self-service
- Helping with streamlined communications
Implementing AI will allow organizations to algorithmically anticipate payroll trends, with the knock on effect being better resource management and a mitigation of the myriad issues that can cause professionals around the world pay run-related headaches.
Drilling down a little, the study found that if payroll workers could automate anything in their day-to-day, reporting and calculating pay would be the first ports of call for both surveyed demographics. Cint’s data found that delegating the creation of payslips was also a boon.
We have all the time in the world…
According to the Australian Payroll Association, payroll professionals spend on average 11.9 hours per week on manual tasks. Given that time back in a more automated workplace, what would staff do?
For both sets of respondents, improving data analysis skills was of huge importance, with 62% of the NZ and 51% of the AUS audiences surveyed by Cint identifying it as the primary means of evolving their role and adding value to their employer. This could take the form of increased amounts of time being allocated as available for interpreting results to shape data-led decision making in payroll departments – and beyond.
Staff in the sector are also keen to use that (potentially) reappropriated time to build on their payroll expertise (51% NZ, 45% AUS) and increase their opportunities for professional development (46% NZ, 41% AUS).
In what will make for happy reading for anyone involved in payroll who wants to worry about their job a little less in their leisure time, around 35% of those surveyed by Cint are of the belief that advancements in automation and AI will lead to a more evenly distributed work-life balance.
Caution is crucial
As with every employment sector looking to integrate AI, it will be vital for payroll departments everywhere to adapt to new systems, processes and workflows by adopting best practices to ensure that the transition period doesn’t leave anyone in the lurch come pay day.
Cint’s data showed that 32% of respondents in Australia and 27% in New Zealand expressed interest in adopting new technologies as soon as they emerge.
Not all of those questioned are ready to make that leap just yet: 36% of respondents in New Zealand and 27% indicated that they’d like to wait a little while before any wholesale change to their in-place systems.
Constance Mallon, Implementations Experience Manager at Employment Hero, notes in the report that having dedicated resources and time allocated to any new implementation is of the utmost importance.
“This involves having a project team with representatives from HR, IT, Payroll, Finance, and other relevant departments who can help streamline communication and the decision-making process during your implementation,” Mallon says.
Conclusion
For payroll professionals, there’s a lot to look forward to when it comes to the future of work. While there’s still good reason to remain cautious about rewriting the entire rule book, now could be the time to start thinking seriously about making AI more than just a buzzword bandied about on the internal Slack.
