Innovation cycles are a key catalyst for growth and play a critical role in both entrepreneurship and economic development. The term ‘creative destruction’ was first coined in 1942 by economist Joseph Schumpeter. It refers to the dismantling of traditional business and economic models to pave the way for revolutionary technologies and innovative processes to improve the way things are done.
In essence, business cycles operate under long waves of innovation, and when markets are disrupted, innovation cycles are inherently a catalyst for growth and the birth of new ideas.
There are thousands of organisations that are created by innovation, which provides an opportunity to clear the slate, revisit something, and improve the way that it functions.
How AI impacts different industries
Artificial Intelligence (AI) has been a major disruptor in industries across the board. However, we have not seen AI being used extensively in payroll to date, although there are several grand ideas about the impact AI could have on the payroll and HR industry. We have yet to see it being implemented and working in the real world to a degree that is truly useful. Chatbots are pretty much the only AI that has been deployed, and these are not really AI. Conditional logic is programmed into chatbots that will respond to certain keywords, but there’s no real intelligence there.
Chatbots do not necessarily provide or cater for complex questions; they are pretty much designed around common questions or scenarios. For example, what are the total amount of leave days I have taken this year? That is true artificial intelligence if the bot can dynamically look at all of the leave transactions and add it up on the fly.
However, AI could be used to improve and benefit payroll by enhancing interactivity, connectivity, and query resolution through AI-powered conversational chatbots. It will also highlight payroll errors by picking out inaccuracies and anomalous behaviors or analysing payroll input to identify trends.
The effects of AI in the future
Automation has the ability to streamline data management by using application programming interfaces (APIs). Organisations can schedule automatic data transfers between their key administrative systems and payroll software. This will eliminate the time spent on manual uploads and downloads and ensure that there is no risk in terms of data security, considering that personal information is being shared between these systems.
In fact, payroll solutions need to have a mature API layer to be able to import and extract data for various other business reasons such as increase letters, active directory, or time and attendance solutions, to name a few. A lot of time would be saved if the technology could extract all new engagements for the month. It would also be useful for time and attendance solutions if an employee comes into the factory, puts their finger on the reader, and downstream system it gets all his information.
Wage Access is another application. Most employees get a monthly salary, but in principle if they’ve worked a week in the month, why shouldn’t they be able to access that week’s wage when they need it? Many employees have expenses throughout the month and want to access what they’ve worked for to date. With Wage Access, they can do exactly that. Now employees can ask to receive what they’ve earned to date. All documents can be stored centrally through the API layer and managed through that later.
How payroll benefits from AI
There’s the question of how payroll providers can incorporate AI into their future plans. Having a cloud strategy is absolutely imperative to position for any sort of future state on these topics. AI and robots need access to the underlying data to be able to perform their duties. On-premises solutions with no mature API layer not only make this almost impossible but will require costly internal projects to derive any sort of value. Customers who don’t adopt the cloud will have to figure out how this technology can gain access to the data on the database. This is an arduous task.
Similarly, remaining on solutions that are not cloud-native will have data security and compliance implications in terms of POPIA. As a provider, we have to do a significant amount of homework to understand the implications and the flow of data, to find out about consent, and other issues. Organisations need a provider who does this groundwork for them, as it makes it easier to remain compliant and secure.
PaySpace’s watershed moment between the 5th and the 6th wave of innovation, being a native, cloud-native solution, put the company in the ideal position to benefit from the power of AI.
We could easily create a conversational channel for employees whereby they can perform typical employee self-service tasks via WhatsApp. For decades, a massive pain point for employers was servicing their blue-collar workforce when it comes to payslip distribution and leave management, and any sort of self-service was simply not an option. Our solution helped both blue- and white-collar workers benefit through our convenient channel.
The solution that helps us meet the expectations of the 6th wave of innovation is called Pacey, a bot that brings employee self-service through WhatsApp. We believe that it will be the future of self-service and will improve employee connectivity and interactivity.
Pacey’s first benefit is its ease of use. We only need one channel, irrespective of where you are in the world. It is a number that any employee can engage with. All customers and employees can eliminate printing costs as well as the distribution costs associated with that. And of course, it’s the same for manual forms for leave applications and suchlike. Even leave, and other paper-based forms, are no longer necessary, and the costs involved with capturing and storing this information are removed.
We believe Pacey will greatly improve these processes. Moreover, it will empower employees, increase employee satisfaction, and will benefit employees in the disconnected world. We also aim to see QR codes included on payslips. In the initial stages when Pacey is being rolled out to employees, they can scan a QR code on their devices, automatically connecting to WhatsApp, and they can begin engaging immediately.
Most importantly, the employee is authenticating with a cell phone and an ID number, so there’s no need to remember long and hard passwords, making the engagement seamless.