The Power Of Data In Payroll Function
7 Sep 2021
The future of many organisations today lies in artificial intelligence (AI) and machine learning (ML). What does that mean for the payroll department?
For the payroll department, AI and ML allows organisations to comb through all internal business systems and collect huge amounts of payroll data for various uses. With the advanced technology, in-depth analysis can be run to deliver insightful outputs for key decision-making and also automate administrative processes.
The gradual uptake of AI and ML also means that people’s roles will change. As these machines take on the heavy lifting and problem-solving tasks, payroll professionals simply need to review and approve the final reports and results. However, in today’s era of profound digital change, payroll seems to be lagging behind the trend. What exactly is the obstruction? And once these barriers are removed, what are the rewards?
In the face of the challenges posed by new ways of working, the need to expand geographic capabilities becomes more apparent. Although the COVID-19 pandemic has accelerated this trend. The future of “hotelization” of work and office space anywhere seems to be alive and well. That means there will be fewer opportunities for companies to divide large numbers of employees geographically to get the same treatment as their payrolls. Early payroll did not take a global approach, nor did they adapt to unique circumstances in a rapidly evolving pay environment. Instead, most vendors try to create engines that focus on a single or even a small number of similar regions or industries, and then add functionality that goes beyond payroll requirements. This is a huge disincentive for companies that are too diverse, too geographically dispersed, and have a large number of employees in a unique salary environment.
Fully Functional Payroll System
From the source of compensation to total compensation to net pay, there is a need to understand and consolidate all sorts of compensation information. Considering any pay cycle, a variety of data comes from different sources. Of course, different data sets are processed using different rules based on their role in the process from source to gross to net. To date, no system has been able to perform all the required data collection, processing and reporting without a major solution, which is largely manual.
A fully digital payroll process will help organisations achieve the high-value goals of a data model. That is, information is collected from its source once and only once. These. Information, also referred to as data points, is clearly defined and its source authenticated. Now, the data can be freely shared in any analysis the company wishes to perform, such as comparing labor or landing costs in different regions, providing important insights into relevant siting decisions.
A more stringent digital environment in the payroll also means that companies can achieve better compliance. Companies will be better able to identify and investigate outliers and will rely on sophisticated dashboards to make critical, up-to-date decisions.
Compared to the rest of the company’s experience, the payroll affects each employee in a unique and personal way. But with digital upgrades, companies can now greatly improve that experience. It starts with higher quality and confidence and the likelihood of mistakes or delays is much lower. In addition, companies can now easily add more features.
Companies can introduce artificial intelligence, ML, natural language processing, robotic process automation (RPA) and related technologies. Machines can be trained to sift through a shoebox for which element is which, identifying gaps or irregularities that require human attention, but eventually triangulate and perform appropriate processing.
It may be early days for many organisations, but the journey to achieve this shift in the way they work has already begun.
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