Payroll, HR Tech, Benefits, and Fintech: The Open Employment Ecosystem Market Map

May 21, 2024
0 min read
A preview image of Finch's Open Employment Ecosystem Market Map.
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Explore Finch's Open Employment Ecosystem Market Map to understand how software tools across HR tech, benefits, and fintech fit together to power modern employment.

Download the Open Employment Ecosystem Market Map

The employment ecosystem—the collection of B2B software applications that employers use to manage their workforce—is deeply fragmented and complex. 

To date, this has been broadly accepted as the unavoidable reality of a highly regulated, disconnected industry. But at Finch, we have a vision for an open, standardized, interconnected future of employment technology. We call it the Open Employment Ecosystem

To illustrate this vision, we created the Open Employment Ecosystem Market Map: a visual representation of the technologies that sit at the intersection of payroll, HR tech, benefits, and fintech. Alex Tran, Managing Director at General Catalyst, put it this way:

"Companies today use many applications to manage their workforce, leaving critical employee data scattered across systems of record and point solutions. While companies continue to choose best-of-breed tools for their specific needs, the lack of connectivity between these systems is a huge challenge—especially to and from payroll systems.

"The vision of an Open Employment Ecosystem where data flows seamlessly is the primary reason we backed the Finch team, and we’re thrilled to see the first version of their market map feature other General Catalyst portfolio companies such as Awardco, Factorial, Gusto and Thatch."

Understanding the Open Employment Ecosystem Market Map

The employment ecosystem consists of two types of technology: systems of record and point solutions, or applications. 

Systems of record are tools like HRIS and payroll that act as the source of truth for employers. These systems hold all of the information about a company’s workforce: census details, earnings statements, employment history, tax data, and much more. Applications are the standalone human resource, benefits, and financial tools that rely on that employee data to function. 

Given this relationship, all of the tools within this ecosystem are interlinked and must rely on each other in some way. At the center of the map are HRIS and payroll systems: where all employee data originates. From here, the data must be shared with applications that fall under one of three main categories: HR tech, benefits, and fintech. Data may ultimately move from application to application, but only after being routed through the systems of record at the foundation of the ecosystem.

In our vision for the Open Employment Ecosystem, all of these applications and systems of record will benefit from bidirectional integrations with one another. Any time an employer makes a change in one application, that information will be seamlessly and automatically relayed back to the system of record, which will in turn push that change out across the rest of the applications in the employer’s tech stack.

The promise of the Open Employment Ecosystem

More than 150 million employment records are exchanged via CSV upload, SFTP, and manual operations every year. While the world has advanced technologically, the employment sector is still reliant on antiquated, cumbersome, error-prone processes, because until now, there’s been no alternative. 

What the ecosystem lacks is a shared infrastructure: a means for quickly, securely, and automatically sharing data across disparate systems. As a result, innovation is stifled, and HR departments are bogged down with unavoidable administrative work: 64% of HR leaders report wasting up to nine hours on manual data entry each week, where the average cost of a single point of data entry is $4.78.

At Finch, we’re building the foundational infrastructure that has evaded the employment industry for decades. Our unified API bridges the gap between systems of record and applications on behalf of employers. We’ve built integrations with hundreds of HRIS and payroll systems that use data standardization and clear rules of engagement for seamless syncing, so employee data is securely delivered to applications in a standardized format, regardless of its origin system.

Similar to the way Plaid introduced the era of Open Finance through its financial API, Finch aims to create the Open Employment Ecosystem through our Unified Employment API. Our mission is to empower innovators with democratized access to global employment systems. With security and compliance as the backbone of our infrastructure, Finch will ultimately build the connection between all of these platforms and empower a new wave of innovators to create a better future of work—one that benefits systems of record, applications, and employers in equal measure. 

Download the market map, or learn more about Finch’s vision for the Open Employment Ecosystem.

97% of HR professionals say it’s important for your app to integrate with their employment systems

Learn more in our State of Employment Technology report ->

97% of HR professionals say it’s important for your app to integrate with their employment systems

Download the report to learn more

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