The CEO's View: Toby Williams on AI and What's Next for HCM

[00:00:01] You're listening to the HR Mixtape, a podcast for leaders who want to understand people, strengthen culture and navigate change with clarity. Today's conversation starts now. Welcome back to the HR Mixtape. Today's episode is one of a kind. For those of you who have been listening for a while, you probably already know this, but if this is your first episode of the HR Mixtape, it's powered by Paylocity.

[00:00:29] Paylocity offers a unified platform for HR, finance and IT. And what makes today's episode unique is that I'm sitting down with Toby Williams, president and CEO of Paylocity to get his take on AI and innovation. Toby joined Paylocity as CFO in 2017 and has been CEO since 2024. Before Paylocity, he worked in global software companies across a range of functions from product and strategy to finance.

[00:00:58] His wide ranging background and leadership of Paylocity give him a unique perspective on the challenges and opportunities our HR profession faces. So I'm happy to have him on the podcast with us today for this very important discussion. Toby, thank you so much for jumping on the podcast today. Toby Williams I'm happy to do it, Shari. It's great to see you.

[00:01:24] So you have served as a leader across a bunch of different functions and culminating in being the CEO of Paylocity now. How have those experiences really shaped your perspective?

[00:01:35] Well, I mean, a big part of my background was in product historically. And, you know, I think what that brings with it is a huge focus on the usability of software. So, you know, the whole point is to be able to create a great user experience and help give people, you know, time back in their day, automating things that are manual or giving them help and workflows.

[00:02:00] And so that's a huge part of the focus of how I think about what we need to deliver to our clients and their users, whether that's admins or employees. And then I think from the finance background, I was the CFO here before becoming the CEO, you get to see all of the internal systems that exist across a company and you gain an appreciation for how important it is that you have all of them integrated and data flow across all platforms, all the systems.

[00:02:29] And that's another thing I think is a huge point of focus for us. And I know we'll get it to, but just being able to give people visibility into the data across their systems and surface that in their workflows when it's most helpful to give them better insights and the ability to take action when they need to. And then to try and automate that to create a fantastic user experience. So that's a lot of what I think I bring from prior experience.

[00:02:55] But I love that you mentioned kind of the usability of all the systems and all the data that HR has. I feel that I have been in that space throughout my career. So I love that that's your perspective and that you bring that to Paylocity and to the product. You know, in your role of CEO, you get an opportunity to have a lot of conversations with other leaders right now around AI. What is the biggest issue everybody's trying to solve in that space?

[00:03:22] Well, I think in this new era of AI, I think everyone is trying to figure out how to use it most productively. So they're just, you know, like any other software solution or anything else that they're using in their jobs day and day. They're trying to figure out how to make it more meaningful and add more value.

[00:03:39] And I think a lot of what we have been focused on, a lot of what I've been focused on has been finding the right ways to use a new technology to deliver value to clients, deliver value to their teams.

[00:03:52] And a lot of that goes into, you know, how do you embed AI in the flows of data or in the workflows that users are going through in their jobs day to day and trying to find ways to automate things that may have been manual or try and hear their experiences, hear what they're trying to do and what their use cases are. And then finding ways to make that easier, which at the end of the day is what any software business has always been about.

[00:04:20] We just have a new technology set to use. And I think there's some real advances that we've been able to make as we've embedded AI across our whole platform, whether it's in, you know, HCM, finance or IT, and then the flows of data and then the flows of work across the entire platform. And yeah, I think we're really starting to do some innovative and exciting things with a new technology set. So I think there's a lot of value that can be gained. There's a lot of value yet to come. And I think overall, it'll accrue to the benefit of all of our clients and all of our users.

[00:04:51] Yeah. And, you know, Paylocity had the biggest launch this year a few months ago with Ignite AI. And, you know, that momentum has really picked up with our clients as they've gotten their hands on it. And I'd love to hear, you know, tell me more about that launch. What was, you know, kind of the most exciting thing about it? Because everybody's talking about AI right now. Yeah.

[00:05:13] Well, overall, I mean, I think this has been one of the busiest nine month periods of launch for us in the last nine years that I've been here, at least that I can remember. So, you know, I'll get into everything we're doing with Ignite. But beyond Ignite, I mean, we've launched our Elevate solutions, which goes to, you know, just providing a broader service capability to our clients. We've launched retirement. So that's another big step forward for us.

[00:05:39] And then bleeding into the AI conversation, recruiting is another area where we've had a recent launch with an AI-driven product. And then leave of absence management is another one, which would have been a hugely manual compliance-focused task that I think was unpopular with HR teams and employees because the user experience falls a crane. So I think those are all the launches in addition to everything we're doing with Ignite that have come out over the last six to nine months.

[00:06:06] So it's been a huge time of launch, really, really busy for our product teams. And I think the cornerstone of all of this is Ignite and what we're able to do, leveraging AI across the platform. And that really starts with giving teams, our HR teams and our administrative users, a place to have visibility into what is happening across the platform from an AI perspective and actually control what is happening and what AI agents are being used across the platform with our Ignite hub.

[00:06:36] And I think that is the unique strategy, unique offering that we've brought to market. And I think that's going to add a ton of value and create a lot of visibility and I think comfort at ease with our users because they'll actually be able to see what agents are doing. They'll be able to see what agents are active. And that's a level of control and visibility that I haven't seen anyone else bring to market. And I think that leads into then the agents themselves and each category of the platform, whether that's in HCM or finance or IT.

[00:07:06] And again, the whole goal has been to create visibility and give people back time in their days by embedding an AI across the platform to automate things that may have taken multiple steps or may have had some manual process to it before. And I think that is going to, as that rollout continues, I think that's just going to add a ton of value to people as we see the utilization increase.

[00:07:31] And we're seeing utilization increase on a 100% basis quarter to quarter right now. So it's really encouraging to see that because I think that what that shows you is people are finding value as they utilize the platform and the new solutions and Ignite itself. So really encouraging and really excited too.

[00:07:49] You know, it sounds like the way Paylocity took its approach to Ignite AI was practical and really kind of focused on how do we create value for our clients and their teams and the people using the product. How were you able to determine, you know, what's going to have the greatest impact for users in advance of the launch? There's nothing like spending time with clients and talking to them about how they use any product or how they use our platform.

[00:08:19] And, you know, hearing what works, hearing what they're trying to do, but doesn't work as well as they would like it to based on their use case or based on their workflows. And, you know, that's what we did. I mean, we do that with every product that we launch and our existing product set too. We spend an awful lot of time with clients, engaging with them to understand how things are working, getting their feedback. And some of our, I think some of the best ideas that we brought to market for products or solutions have come from conversations with our clients.

[00:08:48] Co-creation has been, you know, how we describe that in terms of our engagement with clients and getting ideas from them and having this continued flow of dialogue and idea generation. And then us incorporating that feedback into our product roadmaps and bringing those things back to clients in the platform. And that's exactly what we did with Ignite. We saw in different areas, some of the things that teams would continue to struggle with. And recruiting is a great example.

[00:09:16] So we worked with all of our clients that are getting feedback on recruiting and what we're thinking through, what we might be able to leverage AI for. And when we bought the Grayscale application and brought that into our product set, that was really about addressing client need for being able to bring and engage with candidates on a much broader and a much faster basis. And taking a lot of manual effort off of the plates of recruiting teams that were doing high volume recruiting.

[00:09:44] That's the interesting thing about that is that will certainly benefit high volume recruiting teams. But when you actually get a look at what the application does and what you're able to do as a recruiter, I can't imagine there's a recruiter out there that will not want and benefit from that functionality. So, yeah, I think the core of the answer to your question is we spend an awful lot of time with clients and getting a sense of, you know, what they're trying to do and what they need. And then incorporating that back into the roadmaps, which is certainly what we did with with a nice.

[00:10:14] Yeah. And for those that have been listening for a while, they'll know that I was a Paylocity client before I was a Paylocity employee. And I am very proud that I was one of the first beta testers of Recruit before it came out. So I can attest to that approach and just how helpful it is knowing you have a company behind you when you're doing the work and trying to figure out how to help you do that. So I want to stay kind of on the AI data topic for a second.

[00:10:40] You know, HCM software itself holds really some of the most sensitive confidential data that an organization has. So one thing that comes up when we talk about AI with HR leaders is being able to trust how it's being handled. What's Paylocity's position on this? Well, I think you I think you have a number of concerns. The first is just does a does a partner is a provider have confidential information?

[00:11:06] And as as a given what we do, the core of of what we what we do for clients and how we partner with that is around payroll and HR data. And that is really sensitive data, as everyone knows. And I think the first question that the people ask is, you know, does a provider does a partner have governments around the protection of data, which we have had for, you know, for decades? That that is a core foundation of who we are and how we operate.

[00:11:35] Then I think in the world of AI, a few other questions, I think, present themselves. One is, is the data being shared with the model, the LLNs themselves? And is it being used to train the models? And in our instance, the answer is absolutely not. The data is kept within the four walls of our application set and our data sets.

[00:11:56] And that's I think the biggest concern that people have is, is what is that data being used for that is outside of their intended purpose and outside of the service to them and their employees? And for us, the answer is it's only being used for for our clients and for the purpose of serving them and their employees. I think that's the the biggest point of differentiation that we've that we've taken in our approach. So, well, and I'm sure that gives a lot of our clients a lot of safety and knowing that that their data is safe.

[00:12:25] You know, as we wrap up our conversation, I'd love to hear from you, you know, advice to those listening who might be in the midst of like evaluating their HCM partner. What specifically should they consider or maybe questions they should ask their vendors around AI and innovation? Well, I mean, I think I would give you a broader answer and then go into the AI capabilities. I mean, I think this is this area, given the importance of payroll and the importance of HR to a company.

[00:12:54] I mean, employees are everything within a business. And that's true regardless of what industry you're in or what size of a business you are. And being able to serve your employees well is is just critical. And I think that that requires more than just great software. I mean, I believe that we bring great software to the partnership that we have with all of our clients. But but the service element, whether that's through implementation and ongoing service is is where you you see the true value of partnership present itself.

[00:13:22] And that's one of the things that I'm most proud of in terms of how we engage with and how we serve our clients is not just through, you know, great software, great products, but through the partnership that we bring in service that lasts through, you know, lasts a lifetime with our clients. That's I think that's a huge point of differentiation for us. And that's one of the things that I'm most proud of as it relates to the platform itself. I mean, I think you've got to look at the breadth and depth of any platform.

[00:13:50] And I think that is just enhanced by what we're doing with with AI brings to life with with Ignite. I think it's a it's a unique offering. It's differentiated in terms of giving people, giving our clients, giving our users the ability to see what agents are doing and have control of what agents are doing through the hub.

[00:14:09] And then the depth and breadth of of the genetic capabilities that we're bringing to both, I think, automate workflows and actually give time back to our users, which is the most critical point. If we could actually make someone's day easier, that's a huge victory. And that's really what we're focused on. Toby, this has been such a great conversation, a great peek behind the current about what Paylocity is doing and their perspective on AI and innovation.

[00:14:36] So I really appreciate you taking some time to sit down and chat with me today. Happy to do it, Sherry. There's a ton of exciting things going on, so I couldn't be happier to spend some time with you and talk through it all. So thanks for having me. Thanks for tuning in to the HR Mixtape. Like, share, review and subscribe to support the show and help more people discover these conversations.

[00:15:04] Until next time, keep the conversation going.