The rise of workplace robots

The Institute of Fiscal Studies (IFS) recently published a new report into the impact of the rising minimum wage on lower paid jobs being automated. The analysis showed that, with the minimum wage net increasing and the introduction of the living wage, the occupations of the growing number of those who lie within these categories are ‘more likely to be jobs readily doable by machines or computers’ (1). Examples outlined include ‘hospitality workers, retail cashiers and receptionists’ whose roles include routine work which is ‘easier to automate’ (1).

But what would it mean if robots were cost competitive and did enter the workplace to replace these roles? And for us, what would be the impact on running the payroll?

In the short term, it’s likely to be collaborative

Robots, or more specifically Robotic Process Automation (RPA) has been revolutionising our profession for a number of years, automating a variety of repetitive activities that form part of HR and payroll processing; collecting and analysing data particularly from self-service applications and uploads, running reports and sending payslips to name but a few (2).

Technology moves at such a pace that we’ve perhaps already forgotten how our profession processed payrolls when most of us began our careers in the last ten to fifteen years: tax codes arrived on paper, cash wage packets were made up weekly by hand and data was finessed over weeks then sent on huge magnetic tapes and couriered to HMRC once a year. Equally huge mainframes would then farm out the data to 12 regional databases that after several months reconciled out tax and NI records – yes I know the last bit hasn’t really moved on but we can hope!

Now our focus is on APIs extracting data from external data sources such as HMRC or our pension provider and importing it into our payroll and then sending it on the same way once exceptions have been automatically ironed out or at least highlighted.

As such, robots and humans are likely to continue processing and managing payroll together in the short term – robots completing the repetitive tasks, boosting productivity for humans and allowing them to focus on more complex activities such as data interpretation and decision making (2) – well, at least until robots become so advanced that they can handle such activities. Then what?

In it for the long haul: training the next generation

Does the digital revolution see robots learning complex tasks alongside humans? Do they download the same training and legislation, experimenting with resolving complex situations with their human counterparts until they reach a similar outcome or challenge the status quo? And would robots ever be able to take on decision making which involves ethical matters related to payroll dilemmas?

Investing in robotics now could potentially pay back dividends later with robots perhaps removing the need for so much, albeit certain types of, payroll training as they could simply be programmed or download information accordingly.

But what if the robots were the workers?

Whilst robot workers would be unlikely to be on the payroll and it is more probably they will either be physically owned or paid for under Software as a Service (SaaS) packages, it is interesting to consider how this might impact payroll in terms of employment law. Do we need to, should we and how do we include robots in employment law?

And the alternative?

Any business that hasn’t embraced technology to reduce labour costs will not survive the next five years, as it’s certain their competitors will have done so. Automation, and the rise of the robots, is not something to be feared. As we’ve seen in manufacturing the jobs that remain are specialist and highly skilled because until robots can make those ethical and commercial decisions there is still a role for the highly skilled professional who can really add value to the business’ bottom line. Fortunately, our profession has rising stars who can embrace technology and the human added value. Those of us at the end of our careers can hand the baton on to that generation – now where’s the robot who can explain Optional Remuneration to me so I can fill in this year’s P11D!

Sources

  • Will the rising minimum wage lead to more low-paid jobs being automated?, Institute of Fiscal Studies (available here)
  • Robotic Process Automation for HR & Payroll, EY (available here)