Is Technology Squeezing Out Payroll Professionals?


Leonard A. Haug’s seminal book, “The History of Payroll in the U.S.,” described how the dramatic changes in medium of exchange, accounting requirements and the advent of computers helped advance the payroll profession. These developments propelled the payroll function from a back-of-the-house, paper-pushing accounts-payable activity to ever-important roles within employer organizations and helped create the need for professional advocacy organizations such as the American Payroll Association.

But that book ended in the 1990s. (At least, my book does; I am unaware of any updated versions.)  

Automated processes was a key theme last week throughout the 2016 American Payroll Association’s fall forum in Las Vegas. Workshops discussed the latest payroll applications, cloud computing, effective use of self-service modules and metrics for payroll. A general session covered the technological changes payroll professionals can expect in the near future. 

Today’s more sophisticated applied processes for payroll functions has been a mixed blessing for some working in the payroll field. Many have successfully pivoted in their roles to keep up and stay relevant in organizations. Now that many of the pieces of payroll have been automated, they have transitioned to become effective data and process managers. These people appear to advance far in organizations, expanding their duties.

Others have not been able to make the transition to strategic users of the data payroll collects and oversees, a relatively new requirement for payroll professionals by many employers. Jobs relying on manual calculations and discrete data entry continue to dry up as each new, more efficient and accurate application is adopted.

And these jobs will all but be eliminated soon, Ernst & Young LLP’s Dimitris

Papageorgiou said. He sees the increasing use of robotics to perform ever-more sophisticated tasks as changing the payroll environment.

“Automation means people in large processing centers will lose their jobs to robotics,” he told the APA fall forum general session. And the change is going to be “brutal” on a large scale.

There is a spectrum of “maturities” across organizations, and some companies adopt technologies later than others, Papageorgiou said. But inevitably, lower level individuals will be replaced by virtual workers. Machines can now learn rules and exceptions to the rules, he said.

The exceptions, which payroll professionals manually monitor and correct, now are starting to be stored on machines with artificial intelligence. These developments are very near, Papageorgiou said. He expects pioneering organizations to start adopting this technology in the next three years, with a broader effect on the market the next five to 10 years, he said.

With this as a future landscape, payroll professionals need the ability to adapt to changing processes and would need to learn people skills more so than technical expertise, said Roger Smith, CPP, a consultant with PayrollProf in Michigan.

As outsourcing of payroll functions is becoming more common, vendor management is key, Papageorgiou said. 

Papageorgiou said he perceives payroll as a “center of excellence” in employer organizations.

But the roles, once again, are changing for payroll professionals.

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