Here is a payroll philosophy to follow: If a process is manual and repeatable, then it should be automated. When we look at the three parts of the global payroll process, which include collecting the data, calculating the payroll, and executing pay-outs, the first part—data collection—is clearly the one that is ripe for automation potential.
If we get granular about data collection, we can see that half of the task is the data input itself. The other half is ensuring that the data is accurate and checking it over for errors. This is a task that is incredibly manual in most organizations today and one which holds a lot of pressure for global payroll managers.
For example, when you’re onboarding 10 employees, you can manually complete this task without any problems. What happens, however, when you’re onboarding hundreds or even thousands of staff? You’re sending out forms for the workers to fill in, such as pension or tax forms, and then you need to collect them all, correctly tag them, and upload and organize them onto a payroll platform so that you’re compliant and you can find them when you need quick answers.
It is a manual process which makes it prone to error, and yet it doesn’t need to be this way. This task doesn’t require a great level of expertise. In fact, it can be improved and made more accurate and efficient through automation.
Enter Robotic Process Automation
This is where robotic process automation (RPA) changes the game for today’s HR teams and payroll managers, and it’s already happening across many other areas of business. You would never expect a finance manager to send out, collect, or file forms. Nor would they expect to manually enter data into payments systems of record. They may have a whole team of administrators or perhaps they already have automated processes making this happen behind the scenes. It seems, however, that payroll managers have been left two steps behind when it comes to automation. RPA steps into this gap and takes the repetitive and manual stages of collecting data for payroll processes and automates them.
While data collection is the most common place to automate the payroll process, there are opportunities for RPA elsewhere in global payroll, too. For example, RPA processes can confirm that payments have been made correctly or check payments against benefits breakdowns.
I speak to so many payroll managers who say that they are still validating data manually, checking data input line-by-line to make sure that it has all been accurately entered into the system. But all they need to do is answer yes or a no to the following question: Has this information been entered correctly?
RPA can verify data and alert payroll to any perceived data errors, instead of having someone sift through all of this data manually. For instance, some perceived errors could be anything from a query on the correct payment for a specific sick day or the policy for something unexpected like unapproved overtime or compassionate leave.
To augment RPA, today’s payroll platforms also need to include a strong artificial intelligence (AI) component. If RPA takes over the tasks you don’t need the human brain for, then AI takes over the other end of the scale to handle the calculations that can’t be completed by the human brain alone. Think about ensuring that all benefits provisions are correct, such as the percentage of salary that should be going to the pension—not just in a single location but in every location globally—which are paid simultaneously when you hit that big green button on payday. Are you compliant with the details in each location, not just for pension, but for health insurance, PTO, sick days, parental leave, and more? AI can provide a yes that sounds much more confident than the voice of the payroll manager.
What Can Payroll Managers Then Do With Their Free Time?
Ask any global payroll manager whether they would like more hours in the day, and they will probably say yes. They spend most of their day performing manual tasks which need to be completed but don’t use their expertise or intelligence. You can say that it’s the employees’ responsibility to provide tax information or fill out the right forms, but if the payroll department doesn't have this data they can’t run payroll, and ultimately, that is their responsibility.
As the number of employees and regions grows, payroll teams can’t keep up with the manual and error-prone tasks that make up 80% of their role. Something must happen to reduce the pressure to clear these tasks from their desk, freeing them up to add value elsewhere.
With hours saved—thanks to smart automation—payroll managers can focus on what really needs attention and expertise. They can focus on their people. They can focus on things, such as meeting with brokers to improve benefit provisions and research which insurance or pension plans would support more employees with greater perks. They can manage leavers better by adding offboarding processes or termination processes to improve feedback and data security. They can study PTO usage, and boost morale and satisfaction by pinging an employee to let them know they have 20 days unused time according to the “use it or lose it” policy.
By adding automation to the toolkit of the global payroll manager, you’re empowering them to do so much more with their time. This can’t help but have a positive impact on the rest of the business. When the payroll cycle is working for itself behind the scenes, and everything is in place to just go at the end of each month, global payroll managers can spend less time on data validation and collection, and more time on adding value to the organization as a colleague and subject matter expert who deserves a seat at the table.