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The transformation of payroll


The transformation of payroll 

Payroll and the technology surrounding it is changing in a massive way. Environmental factors, such as an increase in gig work, workforce expectations around flexible payment options and the development of AI and machine learning have all created a need for companies to modernise their payroll systems to accommodate demand. Wilson Silva, payroll expert and SVP of Outsourcing for Alight, recently sat down with Workday to discuss how this transformation will affect the way organisations approach their payroll transactions today, and into the future. 


Competition for top talent  

Top employees set a high bar for organisations to meet when considering where they will put their skills to work. Employers will have to differentiate themselves to attract these top workers and it won’t be enough to compete on the traditional salary and benefits package. In addition to this, the current rate of baby boomers eligible to retire is approximately 10,000 every day for the next 19 years. Even organisations that can attract top talent need to find the means to keep them, as younger demographics between the ages of 25-34-years-old have an average tenure at their place of work for 2.8 years (US Bureau of Labour Statstics, 2018). All this has challenged employers to compete harder to ensure that they can acquire and maintain top talent for their organisation with not only strong compensation and benefits, but also flexible pace, hours and location. Imperative to the success of these adjustments is a payroll system that can handle flexible pay options.  

AI and automation in payroll 

Going forward, machine learning will allow us to start looking at every earning and tax deduction for an employee in a payroll run, and use their historical pay to identify anomalies. This changes the way humans interact with a payroll cycle by placing less of the transactional burden on a payroll analyst and more emphasis on payroll analysts’ understanding of the end-to-end payroll process to solve the issues that machine learning uncovers. This shift from a partitioned system of running a payroll cycle allows payroll departments to become a strategic partner to the business with their knowledge of an organisation’s payroll cycle from start to finish and the ability to communicate this knowledge to company leadership.   


AI’s ability to make inferences off historical payroll data will lead to providing better guidance around important employee compensation actions, such as benefit elections. AI’s analytical capabilities will also allow the quality reviews that happen during a payroll run to occur in the pre-payroll stages. With the ability to detect mistakes to time-submission based on historical employee time data for example, payroll AI can alert the employee of the mistake and allow them to resolve it in real time and before the inaccurate data is carried over into the payroll cycle. 

The future of the payroll analyst  

Organisations that embrace these transformations around payroll will open payroll analyst job duties to a variety of problem-solving opportunities. Organisational leadership is always looking for their analysts to provide insights around payroll data, so as payroll colleagues free up their time by moving away from transactional and toward analytical functions they can focus more on process improvement and insights. These payroll colleagues also hold the important role of being the payroll AI and automation experts, as the machines running the transactional processes of payroll are only as good as the people who maintain their learning and integrity.   


For more insights around the transformation of payroll, you can watch the full video of Wilson's conversation with Workday below.