Samantha O’Sullivan, the CIPP's policy and advisory lead, told HR magazine that as more payroll professionals use AI, they should be aware of risks to data security.
She said: “We are seeing much more talk now on the ethical and responsible use of AI. What organisations need to remember with regards to payroll data is that we are dealing with personal and identifying information, and it is essential that it is protected.
“Ensuring that this data is not provided to generative AI models, such as ChatGPT, Gemini and CoPilot, is essential, as this data could then be used for further AI training and present a security risk.”
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The CIPP questioned 400 payroll professionals on their approaches to the growing presence of AI within the industry, finding that 6% said they used some form of AI within their organisation in relation to payroll processes. The majority (84%) don’t, and 10% are unsure.
O’Sullivan added that AI could help alleviate payroll professionals' workload, particularly with data entry.
She said: “Many payroll software companies are exploring the roles of AI in payroll as it has a wide scope to assist with data entry and manual tasks. However, it is always best for payroll teams to assess where they can best implement AI into their own workflow, and do so responsibly within the systems they already have in place.”
Among those who do use AI, 3% said that AI or automation had replaced payroll roles within their organisation. The vast majority (84%) said it hadn’t, and 13% reported that although it hadn’t, payroll professionals had taken on amended duties since they had been in use.
More than a third (35%) of the people surveyed were worried about AI's impact on their role.
Fostering AI skills in a payroll team is crucial, according to Sylvain Grande, chief product officer at payroll software, PayFit.
Speaking to HR magazine, he said: “The human factor remains the most important one, ensuring you have trained personnel who understand both AI and payroll systems at different levels.”
Payroll professionals looking to implement AI responsibly should begin by ensuring legal compliance and bolstering training, he added: “Before leveraging AI in payroll, organisations must clarify the use cases where AI is relevant, and ensure robust data governance policies.
“Organisations should also ensure compliance with local labour laws and data protection regulations (eg GDPR). Infrastructure-readiness is also crucial.”
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One in ten (9%) organisations surveyed had been victim to an attack which impacted payroll.
Grande said: “AI can both reduce and increase the risk of cyber attacks or data breaches, due to the vast amount of sensitive information they process, the lack of ability to audit along with other factors.
“Organisations should implement robust cybersecurity measures, including multi-factor authentication, access controls and regular security audits. AI systems should be designed with built-in security features that can detect and respond to unusual activities in real-time.”
He emphasised the importance of employee awareness of cybersecurity: “Employee training on cybersecurity best practices is essential, as human error often leads to breaches.
“Organisations should also establish a comprehensive incident response plan to quickly mitigate any breaches that occur.”
The CIPP's survey of 468 payroll professionals was conducted between May and 10th June 2024.
