Red light, green light: Understanding AI and automation at the intersection of payroll, human resources and finance

For those organizations trying to understand how they can better integrate and align work across payroll, human resources and finance departments, here are some areas that might be worthwhile to explore (“green lights”), with a few words of caution to consider along the way (“red lights”).

Compliance and reporting

Organizational compliance monitoring and reporting are critical, time-intensive tasks that can be aided by automating a few key areas:

• Policy and regulatory compliance: AI can assist with monitoring and flagging any compliance issues, whether related to internal policies or external regulations, such as updated employment/labour laws (e.g., minimum wage adjustments, legislated vacations) or mandatory statutory withholdings (e.g., CPP, CPP2 deductions).
• Risk management: AI tools will continue to evolve to support organizational risk management with their ability to analyze data to identify patterns and irregularities that are potential threats (e.g., early fraud detection, timesheet manipulation, undocumented absences, misaligned compensation). These tools will also come in handy to run simulations, such as financial or policy compliance, to identify areas for improvement prior to formal audit processes.
• Reporting: Shared access to data and reporting dashboards across departments allow HCM professionals to create automated reports in a variety of formats without over-relying on time-intensive manual analysis and development by employees.

Red light: Exercise caution by ensuring that all data analysis receives a quality control check by an employee or employees with additional insight. For example, some AI-flagged compliance issues may be exceptions to a particular rule, and all generated reports should be reviewed to ensure errors are caught before they are widely shared.

Employee self-service portals

HCM professionals can easily become the go-to source for employee questions, information requests and training needs. Adopting AI-driven approaches to customize employee portals can allow instant access to key information without the need for HCM professionals to respond to countless emails and messages. Even better, storing and updating all this information in one place ensures that payroll, human resources and finance departments are aligned in sharing information consistently with the workforce.

This includes:

• Human resource, benefits and financial administration: Employees can access information about human resources policies and procedures and benefits packages, while managing their own administrative requests, such as processing benefit expenses, requesting vacation or simply updating personal information (e.g., emergency contact, address). Employees can use the same portal to access financial forms (e.g., expense policies) and payroll related information (e.g., time sheets, pay stubs, tax forms).
• Employee onboarding: Streamlining information to create consistent onboarding programs allows for an employee to have a positive, consistent experience when they join an organization. AI allows for the automation of repetitive information (e.g., standardizing self-directed training) and, by requiring each department to document this information, avoids reliance on individual employees to hold and share this content.
• Automated support: Ranging from built-in search features to cross-departmental AI chatbots, employees can learn to navigate these portals without the need to shop for answers across departments if a departmental “owner” of a certain process isn’t clear. These features can allow employees to find what they need at any time, including after hours, and lessen the administrative demands across all departments.

Red light: While automated employee portals can reduce administrative workload, there are always going to be employee questions or needs that require a one-on-one interaction. Whether for clarifying a policy or investigating an exception to an established process, HCM professionals still need to be accessible and open to these interactions to build relationships and better understand the unique needs of the workforce.

Content creation and standardization

HCM professionals are typically responsible for communicating policies, processes and other key information to employees across the organization. AI can allow for multiple departments to collaborate so that important communications and documentation is clear, consistent and easy to understand.

This includes:

• Staff communications: HCM professionals can use generative AI to draft employee communications using simplified, accessible language. For example, a new policy impacting multiple departments can be quickly summarized into a short message, with each department assigning a lead for quality control review.
• Systems documentation: Payroll, human resources and finance departments often lead process documentation to ensure that key areas of work (e.g., payroll processing, performance reviews, accounts payable disbursements) are occurring in a consistent, repeatable way. However, sometimes this documentation varies greatly across departments, ranging from one-page summaries to in-depth manuals. By using AI to format systems documentation consistently, HCM professionals can ensure that the work of each department is kept in a clear, standardized format.

Red light: While using AI to support content creation can be an effective way to draft and format content, it still needs to be reflective of the shared voice and approaches of these departments. For example, if all communications from the payroll, human resources and finance departments are light and casual, employees within these departments need to match that tone by being open and responsive when they interact with their colleagues. If not, this disconnect can hurt organizational culture and negatively impact working relationships.

We’re living in an exciting time where traditionally administrative and time-consuming tasks can be assisted by AI and automation. Exploring these uses across payroll, human resources and finance departments can increase collaboration, support consistency in approaches and allow newly found time to be redistributed to other tasks. However, at the end of the day, HCM roles will always require a human touch. Remember, just like humans, AI isn’t perfect and doesn’t claim to be. The options for automation are endless, but striking the right balance is key to success.

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