Though automation is not a new topic in payroll circles, it remains as much a point of debate today as when it first began impacting our industry at the start of the millennium. It’s not going away, and more and more payroll professionals are now embracing automated solutions, although not without hesitation. Such a change begs important questions, including how will our roles evolve, how real are its promises, and—most importantly—will I keep my job?
This chief concern is completely understandable, but also unnecessary. The benefit of automated systems lies in their ability to enhance the work performed by people. In fact, becoming involved with and even leading the charge for automation within your organization is the clearest path to a solution that fully addresses your needs and supports your team.
The Added Value
Automated payroll systems are already revolutionizing our workdays with faster, easier data aggregation, basic calculations, payroll reviews and more. Beyond speed, some key benefits of these systems include reduced errors, easier regulatory compliance and greater data security.
However, the true value of automation is realized when a system is used to address shared needs throughout a company. A global payroll solution, integrated with an automated HCM system, can remove the need for monotonous data entry and sail through repeatable tasks that otherwise require hours of manual work by individuals. The result can benefit Finance, Accounting and other functions, just as their automation can benefit Payroll. And the key to unlocking this shared value is you, the payroll expert.
Your Part to Play
Skilled professionals are an integral part of the automated future of payroll. You possess the essential knowledge and understanding of your organization’s payroll process, needs and goals, and thereby play a crucial role in the successful design and implementation of any automated solution.
Fortunately, there are precedents to allay worries of redundancy due to automation. When banks introduced ATMs, they faced resistance by tellers who feared losing their jobs. However, because ATMs let branches run more efficiently, banks could open more locations and ended up with significantly more tellers and branch staff overall.
Automated kiosks have completely changed the check-in process at airports, at some locations eliminating the requirement for human interaction entirely. Far from eliminating the staff, however, airlines are focusing on developing their customer service and human experience by leveraging those employees who were previously occupied with repetitive tasks to purposefully engage with customers and provide better service.
As global organizations strategies the opportunities afforded by automation and robotic systems, they are realizing major benefits in leveraging employees’ uniquely human skills involving flexibility, judgement and common sense.
Automating Actions (Not Jobs)
Future success will depend largely on the approach companies take to automating global processes. Rather than automating entire occupations, we must examine work activities to understand which tasks lend themselves to automation across the workforce.
Predictable and repetitive activities such as those involved in data collection and tax calculations are ideal for automation, while work which involves critical thinking, reason or interpersonal skills, such as stakeholder management or interpreting regulatory changes, must remain the responsibility of a knowledgeable person.
As a global payroll service provider, we at CloudPay recently identified primary tasks involved in payroll, reviewed how much time teams spend on each task and used a McKinsey model to calculate the automation potential of each activity as a percentage of time. The tasks include the repetitive actions of predictable physical work, data collection and data processing, and the more variable and nuanced responsibilities of managing others, applying expertise, stakeholder interactions and unpredictable physical work.
Unsurprisingly, payroll teams spend a significant amount of their work time on the predictable activities prone to automation. In fact, the data shows that 40% of the time spent on payroll tasks has the potential to be automated.
The Potential of 40%
To date, automation initiatives have typically been driven by top-down corporate strategy, which may explain why perhaps the most important benefit of these systems is one of the least understood: the time savings afforded to existing payroll teams.
This 40% is both the cause for concern and the cure. Rather than fear a 40% reduction in staff, payroll leaders can consider this time savings an opportunity to increase the value and capability of their teams.
Payroll is one of the most essential interactions any organization can have with their employees. The time saved by automating repetitive tasks can free up payroll professionals for higher value activities, such as improving the payroll experience, analyzing payroll trends or interpreting regulatory changes. Additionally, replacing monotonous and repetitive activities with more creative or interactive work can boost employee engagement, job satisfaction and performance.
The Challenge to Change
It doesn’t happen overnight, of course. As with any significant process change, full implementation can take months, or longer. In that time, your team may undergo extensive training, design a new payroll process and spend hours inputting data, selecting calculations and more.
Making the switch to automated payroll does require change. Your team may not look the same by the end. But alongside any challenges, you can expect to see substantive improvements not only in your payroll performance but also in the work lives of your colleagues. Fortunately, the benefits are evident soon after the system goes live, as your team and your organization achieve greater accuracy, faster, with less monotony and more insightful results.
The double team of human and automation is called an augmented workforce, and it’s widely viewed as the new normal for functions like Payroll which balance interpersonal relations and a need for expertise with repetitive, programmable activity.
Be The Catalyst
While automated payroll systems are ready to improve the basic functions of the payroll process, the leadership of what those activities are and what the outcomes should be will rely on experts like you. When it comes to evaluating which tasks can be automated, what higher value work should be prioritized and how the changes may affect your payroll team, your insight will be instrumental in shaping the adoption of any automated solution—provided you become involved.
Being at the forefront of your organization’s automation is the best way to ensure a chosen solution works for the company, the payroll function and your team. It’s an important undertaking that requires insight, commitment and a bit of faith, which is why it’s helpful to remember that it’s natural to have concerns. We are human, after all.
A version of this article appeared in GPA's September 2017 magazine issue.