In today’s fast-paced business environment, leading human capital management (HCM) providers are harnessing generative AI to efficiently manage a large workforce. This technology helps automate routine tasks and deliver actionable insights for better decision-making.
ADP, an HCM and payroll giant, is at the forefront of this AI-driven revolution. The company operates in 140 countries, providing payroll, HCM, and networking solutions.
“In the US, we pay one in five private sector employees, processing payroll for approximately 32 million employees. So, it’s huge,” said Srinivas Konidena, CTO and VP of APAC products at ADP, in an exclusive interview with AIM.
The company is leveraging generative AI to automate repetitive HR tasks and payroll, predict attrition, and provide personalised employee experiences.
AI in HCM
“We have something called ADP Data Cloud. It is more like a concept of a lake where all the systems, whether it is down market, mid market, or up market, they all flow the data into this data cloud. And, on top of which, we would like to use AI to generate some interesting analytics, interesting things,” he explained.
Among the different products, ADP’s attrition prediction model, not only predicts attrition rates but also suggests where to find replacement candidates and the expected salary range.
“When you have attrition in an organisation, the general expectation immediately after, is to predict attrition. So, we had some models to predict attrition based on the industry, based on how things are going in the company and things like that,” Konidena shared.
Wary of ChatGPT and Copilot
“We are very paranoid about data. Because of the business we are in, clients trust our data,” Konidena stated.
To ensure data security, ADP has banned the use of public AI tools such as ChatGPT within the company. Instead, they utilise LLMs that are captive inside ADP’s systems, with no external connections.
The use of copilots, such as GitHub Copilot and Amazon Code Whisperer, requires approval from their central office called GAIN (Generative AI Now) office.
“One thing clear is, we do not allow the data to go out, even when we use copilots,” Konidena explained. “What we’re doing is we’re restricting the copilot to focus only on the IDE and not go back to the repo.”
Currently, ADP is not developing new AI models but rather reusing existing models from providers such as AWS, Azure, and Facebook.
Konidena also revealed that ADP is working with Microsoft to create a separate ChatGPT instance for the company, allowing them to use the technology more actively while maintaining data security.
Unlike Zoho and Others
Besides ADP, platforms like Rezolve AI and Zoho are also leveraging AI to transform HR workflows.
AI-powered service desks handle repetitive tasks, such as password resets and software installations, allowing human agents to focus on complex issues requiring empathy and critical thinking.
Zoho has also implemented AI models on its platforms, including AI chatbots for query resolution related to organisational policies and an AI-based document processing technology called ‘IDP’ for extracting information from documents.
However, ADP differentiates itself by primarily focusing on specialised HCM and payroll solutions, whereas companies like Zoho offer a single system for accounting and other business functions.
“Their focus is on entering into a single system for accounting and work and things like that. On the other hand, we are mostly on the specialised part of it, which is HCM payroll,” said Konidena.
Promising Indian Market
In India, ADP is experimenting with AI to detect payroll anomalies and streamline the year-end tax submission process.
“The ability to accept change and the rate of innovation in India, unbelievable. And I see the same in China. So accepting of change. Then what happens is our ability to rapidly develop the product is good,” Konidena remarked.
The company is also expanding by allocating dedicated funds for emerging technologies at the corporate level.
“We are co-investing using ADP ventures. So I think that will give us some leverage more than anything, I think it will give an insight into what’s going on,” said Konidena.
ADP sees significant potential in tier-two and tier-three cities in India, where the standard of living is improving, and companies are establishing operations.
“Those are the engines of growth. We’re also seeing all the manufacturing, right? Earlier used to be centred around these places, they’re shifting out. And when they shift out, they’re not getting regular manual labour. I mean, it’s all fully automated supervisors,” Konidena pointed out.
ADP’s growth has been driven by both organic expansion and acquisitions. In India, ADP acquired Ma Foi Randstad’s payroll business, which had around 100 clients at the time. Over the past 12 years, ADP India has grown to serve close to 2,000 clients.
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