ADP: Automation gains can cut HR service costs

ADP has upgraded its HR service capabilities, shifting more work to employee self-service. It is part of a broad industry effort to automate as much HR work as possible.

ADP has improved its platform to automate HR services to reduce staff time spent answering questions employees may have about benefits, pay, vacation and other work-related issues.

It uses AI technologies, including machine learning, to predict what employees may need and then sends them a "proactive nudge" or notification that may appear on their smartphone to make it easier to take action.

For instance, if an employee welcomes a new child to the family, the platform may advise the employee to review his or her tax withholdings. This nudge or "action card" helps guide the employee through the steps needed to complete the process. 

The upgrade, broadly called Intelligent Self-Service by ADP, has shown the ability "to immediately address roughly 16% of an [HR] practitioner's volume, and we're fully expecting that to scale in the coming months," said Joe Kleinwaechter, vice president of UX at ADP. 

The intent is to ensure that HR service requests are for "tasks that are harder and more meaningful for [HR] to solve," Kleinwaechter said.

The HR service improvements, which utilize AI technologies such as machine learning, are being rolled out to customers. They include improvements to ADP's chat system as well as streamlining processes used by employees to address HR service requests.  

ADP posted $16.5 billion in revenue for its fiscal year 2022 that ended June 30, a 10% gain over 2021. The company is competing with other prominent HR vendors to automate as much as possible

"This kind of thing definitely works," said Josh Bersin, an industry analyst, of HR service automation. "When an employee submits a ticket, for example, and asks for a time card or vacation balance, the AI reads the request and automatically fulfills it." 

The AI is trained by service center reps "who look at the incoming requests and categorize them," Bersin said. "It's a very powerful solution, and this type of tech is available in ServiceNow, Workday and Oracle also."

It only works when there is a strong adoption of self-service.
Trevor WhiteAnalyst, Nucleus Research

The Hackett Group, a management consulting firm, said in April that it expects HR budgets and headcounts to decline this year but workloads to increase. HR departments have increased technology spending in response, it said. 

However, although HR self-service can lead to significant time savings, "it only works when there is a strong adoption," said Trevor White, an analyst at Nucleus Research.

HR service automation can face obstacles with employees who don't have a computer at work and have little experience using software, White said. The lack of adoption of HR self-service tools "is the biggest problem we see."

Patrick Thibodeau covers HCM and ERP technologies for TechTarget Editorial. He's worked for more than two decades as an enterprise IT reporter.

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