What is a Unified API? Everything You Need to Know

May 30, 2024
0 min read
What is a unified API? Here's everything you need to know.
Table of Contents

Learn what Unified APIs are, how they work, and how they make it easy for employment applications to access employee data from systems of record like HRIS and payroll.

Is the tech stack about to topple over? 

In the employment tech market, switching between multiple applications has become the norm, with 49% of HR professionals juggling seven or more different employment systems within their tech stack. 

But this way of working isn’t just tiring and frustrating—it’s sending productivity into a nosedive. Research shows that after switching between apps, it takes an average of nine and a half minutes to get back into a focused and productive workflow. What’s more, 56% of HR pros report finding incorrect or outdated information in employee data at least weekly—often a result of having to manually enter and move data between systems of record.

Consequently, it's unsurprising that 97% of HR professionals emphasize the importance of integration among their employment systems. But how is this possible in the expansive and fragmented employment technology landscape, where there are nearly 6,000 payroll systems alone?

The answer lies in unified APIs. 

Also known as universal APIs, this rapidly emerging market addresses the pressing demand for platform connectivity. As the employment tech market encompasses many systems of record and point solutions, connecting the employment ecosystem can bring immense benefits. In this article, we’ll delve into the world of unified employment APIs, exploring their benefits and how to get started with them.

What is a unified API? 

In the employment technology space, point solutions—the applications that employers use to manage human resources, employee benefits, and finances—must integrate with systems of record like HRIS and payroll to pull in pertinent employee data. 

A unified API acts as an abstraction layer or an API aggregator, pulling information from all these applications and systems and presenting them in a secure, standardized way. Companies only need to build one integration—to the API provider—to connect to dozens or hundreds of outside systems. The provider handles the complexity of varying backend data models and the ongoing maintenance of the connections. 

To use an analogy, think of a unified API as a power strip, with the systems of record as the appliances and the electricity as employee data. When using a unified API, applications need only to plug the strip into their own outlet to send data flowing between their own software and every system of record their customers use.

Unified APIs offer seamless connectivity between systems that vastly improves the user experience. In turn, that allows the applications and systems of record to grow their market share and free up internal teams to focus on building a better product. 

Types of unified APIs

The unified APIs available today can be broken down into two types: generalized and niche. Each type serves distinct purposes and offers unique advantages:

  • Generalized or horizontal unified APIs: These connect and integrate software systems across various verticals and use cases. For example, they could provide API integrations to systems that range from marketing automation platforms to accounting tools. While generalized APIs are great for accessing surface-level data, they lack the deep data coverage and granularity that's found in a niche unified API.
  • Niche or vertical-specific unified APIs: These are hyper-focused on a specific sector, like employment tech. They’re best for nuanced use cases that need deeper data granularity than what’s available with a generalized API, like administering retirement benefits. For example, a niche payroll API is able to go down to an individual pay statement level—something a generalized API can’t offer. Finch’s Unified Employment API is specifically focused on the employment ecosystem at the intersection of HR tech, benefits, and fintech.

Benefits of unified APIs

From offering a great return on your investment to making things easier for users, there’s a lot to like about unified APIs. Here’s a rundown of the most common benefits. 

Drive cost efficiencies

Building custom integrations doesn’t just take a long time—it’s expensive too. Our research shows that creating just one in-house integration can easily cost $187,000 (or more). And that’s before you consider any ongoing maintenance costs.

On the other hand, choose the right unified API and you can unlock access to hundreds of employment systems in just a few moments. No matter how many integrations you need, the cost is far less than creating custom integrations from scratch.  

The ROI of Unified APIs

How much could a unified API save you? Use Finch's ROI Calculator to find out.

Improve the developer experience 

Burnout is rife among software developers and IT professionals, with work exhaustion being one of the main reasons developers leave their jobs. When developers can’t easily connect to new systems and need to repeat tedious manual integration work, it’s no wonder they feel frustrated and exhausted.

But demand for developers is high across all industries, so keeping hold of your team is critical. One way to boost retention is to focus on improving the employee experience for your dev team. A unified API frees up developers' time to focus on value-added tasks—instead of fighting fires all day.

“The best developers are the laziest. They focus on tasks that add value to the product and avoid work that doesn’t. Reproducing what other people have already done and reinventing the wheel is just useless for them.” — Nimrod Hoofien, former Head of Engineering at Gusto

Enhance the end-user experience 

HR and benefits professionals who use employment technologies are expected to do more with less—but the systems they rely on are often slow, clunky, and frustrating. 

In The 2023 State of Employment Technology Report, we surveyed HR professionals and uncovered:

  • 68% switch between different employment systems throughout the day
  • 49% leverage seven or more employment systems in their tech stack
  • 26% spend 10 or more hours per week in their employment systems 

The kind of seamless integration that a unified API offers makes for a better user experience. For the employers that use your application, it also allows them to achieve faster time to value—streamlining the onboarding process, eliminating manual work, and creating a better product experience that ultimately drives adoption.

Easily scale product integrations 

Building custom integrations is a costly, time-consuming exercise. Add up all the integrations you’d need to create to connect to the number of HRIS and payroll systems available today, and you’re looking at a serious amount of time and money.

Instead, a unified API allows you to build and maintain product integrations at scale. But despite the name, not all universal APIs are truly universal—because they don’t always integrate with all employment systems. Before choosing a unified API provider, it’s essential to ensure it offers extensive coverage of employment systems. 

Increase total addressable market (TAM)

For HR teams, whether or not your application can easily integrate with their existing tech stack is one of the most critical buying considerations. They don't want yet another disconnected, siloed solution cluttering their tech stack—they crave integration and efficiency.

Choosing a unified API that connects with many systems of record ensures you’re reaching as much of the market as possible. Take Finch, for example, which integrates with over 200 different HRIS and payroll systems—the same ones nearly 90% of all U.S. employers use—including top employment providers like Gusto, ADP, Paychex, and Quickbooks. 

Unified APIs vs. other integration methods

Unified APIs aren’t the only option when it comes to integration. Here's a closer look at some popular alternatives and how they compare:

  • Custom 1:1 API integrations: A custom integration between two specific systems offers the same benefits as a unified API, but only for one provider. Since each integration requires additional development efforts, they’re time-consuming and expensive to implement and maintain.
  • Workflow tools: These streamline data analysis and automate time-consuming manual tasks within a specific system, which can reduce the amount of effort required to manually move data between systems. But because these aren’t true integrations, they cannot facilitate the flow of information between two systems; that part still requires manual intervention.
  • iPaaS (Integration Platform as a Service): iPaaS platforms are tools that help internal dev teams build custom 1:1 integrations faster. They provide the basic rails for integrating with various systems and manage the governance and security of these connections. iPaaS platforms are useful for businesses that need a high degree of customization for every integration, but compared to unified APIs, they require much more work of the internal development team.
  • iMaaS (Integration Management as a Service): iMaaS is a managed service that helps SaaS companies distribute integrations to their customers by providing access to other applications’ APIs through a marketplace within their app. Similar to iPaas, this service can help expedite the time it takes to build an integration, but the integrations still need to be built one at a time and require development work. 

When to opt for a unified API

Unified APIs offer distinct advantages over other integration methods, but determining when to opt for a unified API depends on various factors. Here are a few scenarios where choosing a unified API is ideal:

  • Limited development resources: If your organization operates with a small or underresourced development team, it makes sense to use a unified API. This removes the expense and time involved in creating custom-built APIs—not to mention the effort required by your team.
  • Need for wide integration coverage: Suppose you're an employment application aiming to integrate with as many payroll providers as possible. If you can build just one integration (to the unified API) to connect with multiple providers, you can quickly increase your market potential. In this case, a unified API makes the most business sense.
  • Desire to reduce ongoing costs: Operating and maintaining custom-built integrations is expensive and time-consuming. By outsourcing the burden of ongoing maintenance to the unified API provider, teams can spend their time on tasks that add value to the business rather than routine maintenance activities.

Real-world success: How companies use unified employment APIs

Learn how businesses like Human Interest, TempoPay, and Rillet use Finch’s unified employment API to drive their business forward.

How to choose the best unified API tool 

Ready to start exploring unified employment APIs but unsure what to look for? Our comprehensive buyer’s guide gets into the nitty gritty of key features to consider, such as broad coverage, dataset granularity, and a frequent data sync cadence. With these insights, you can confidently evaluate your options and make an informed decision. 

Scale your integrations with Finch

If you’re looking for a unified employment API that checks all the boxes (and then some), look no further than Finch.

Finch allows employment applications to access data and make changes across hundreds of HRIS and payroll systems—covering 88% of US employers—through a single API. See why Finch is the #1 Unified Employment API. Try it for free today.

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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