AI and HR & payroll software; from the inside


 

All of us will have read articles and maybe listened to webinars about how Artificial Intelligence and wider use of chatbots in HR & payroll software is going to be a game-changer.

Most of this information is coming from providers whose markets typically include large corporations and institutions, as well as international employers who are household names.

Right now, many HR & payroll practitioners in small- to medium-sized organisations  must be wondering how and when this is going to affect the software they use.

We asked top HRIS consultant Denis Barnard  to talk through some of these  concerns with some of the HR & payroll vendors operating in the SME space.

First up was CezanneHR, a cloud-based HR system with easy configuration and global capacity. Denis talked with Sue Lingard, Marketing  Director, and John Hixon, Director of Research & Development.

 

DB: Is there really a need for features like chatbots and AI  in SME HR & payroll departments, and if so why?

SL: Thanks to the falling costs of HR software, and a recognition the relying on Excel spreadsheets for HR is no way to run a business, there is a lot of appetite for technologies that help cut admin overheads and improve business efficiency.

Chatbots and voice assistants fall into this category. They can relieve a lot of the admin pressure on HR by helping with information gathering, perhaps during the onboarding process; or by answering the typical every-day questions that come from employees about policies or holiday entitlements – or even allowing employees to “ask” their mobile to check their holiday entitlement or latest payslip, request time off, or complete a timesheet.

JH: The application of the more “intelligent” side of AI to HR in SMEs won’t happen at the individual company level. It is too expensive and complex to set up, and SME’s don’t process enough information for an AI tool to get its teeth into. However, the suppliers that work with SMEs, like benefit providers, online training suppliers or recruitment portals, are in a different position. They have access to huge amounts of data so are ideally positioned to mine this information to provide a service to smaller companies – either to help them cut costs or provide a better service to employees.

DB: How soon do you predict that they will be more widely available?

SL:  Sooner than we think.

Technology adoption is accelerating faster than ever before, as is our appetite to make use of it.

I saw an interesting interview with Jeff Bezos where he talked about the factors that drove the success of Amazon – and how he’s hoping to create a similar environment for the space industry. The point he made was that the infrastructure was already in place. Amazon didn’t have to build the internet, set up a delivery service, manufacture the goods, or even create the demand. They just needed to figure out a way to exploit it.

The same is true for chatbots and to a lesser extent, some other flavours of AI. The tools exist, the data is available, the delivery mechanism is there and so is the audience. The smart bit will be matching the technology to the needs of the business, and delivering it at a cost and with a simple enough interface that allows HR, payroll professionals and other employees in SMEs to just use it.

 

DB: It is true to say that software in general has been coming down in price in real terms, as have implementation time and costs. Could the advent of this new technology signal an uptick in acquisition costs both in purchase terms and longer implementation?

SL: We are already seeing an explosion of free tools to build chatbots, and toolkits that enable interfacing with voice activated technologies, like Amazon’s Alexa.

HR and payroll teams are unlikely to have the bandwidth or expertise to build solutions based on these tools from scratch, but there’s no shortage of companies looking to take advantage of the next wave of technologies. Since the cost to entry is relatively low – and VC money seems unlimited – we can expect to see a lot of free or nearly free solutions targeted at HR coming on to the market in the next few years.

At the more “intelligent” end of the AI market, cost and complexity is an issue that’s not going to go away. Instead, we’ll see the large service providers embed AI as part of their overall offerings, and offer that as a service to the smaller companies – they’ll consume the results, rather than having to worry about the technicalities.

 

DB: Apart from the direct cost aspect, will these developments demand a higher or additional level of expertise from the client population in terms of initial understanding of configuration and future system development?

JH:  At the upper end of the AI spectrum where we find the systems that really learn and predict, there is a much higher degree of complexity, and a lot of challenges still to overcome, as Microsoft found out when it launched its “conversational” Twitter bot, Tay, that was intended to learn how to interact with other Twitter users by following their example. It took less than 24 hours for Twitter users to turn Tay into a ranting, misogynist racist.

There are plenty of other examples of situations where AI has shown that it’s not to be “trusted”.

https://www.technologyreview.com/s/608248/biased-algorithms-are-everywhere-and-no-one-seems-to-care/

It’s a concern that’s reflected in the upcoming General Data Protection Regulations, which specifically addresses the risk of automated decisions being taken about individuals that could be damaging.

https://ico.org.uk/for-organisations/guide-to-data-protection/principle-6-rights/automated-decision-taking/

 

DB: Without giving away any trade secrets, what’s your view of the HR & payroll software landscape for SMEs over the next 5 years?

SL: The challenge is that HR in SMEs are already so swamped that they often don’t time to figure out how to make the most of their current HR solutions – let alone start to experiment with some of the newer technologies coming to market, unless much of the ground work has been done for them.

However, it is safe to predict that over the next five years:

  • As with technology shifts in the past, we’re going to see a lot of new entrants in to the market, a fair number of failures, and a lot of acquisitions.
  • Older HR systems will be “retired” in favour of newer more cost-effective and agile Cloud-native solutions – not least because they offer employees a much better user experience, which in turn translates more accurate information for the business and less overheads for HR.
  • Companies with more than a handful of employees using Excel to manage HR will become the exception, not the norm.
  • Mobile usage will continue to accelerate – with employees expecting to “consume” HR-related information via increasingly interactive and “intelligent” interfaces – including voice.

DB: Thank you both. It will be fascinating to watch as these events unfold.