Disclaimer: The benefits products discussed in this video are offered by our partners SimplyInsured, NEXT Insurance, Inc., and Clair. Gusto and Gusto Embedded are not directly offering these products or acting as a broker.
We sat down with three members of the Gusto Embedded team: Matt Hamilton, Head of Customer Experience, Savannah Du, Solutions Engineer, and Brandon Reich, Head of Partner Growth, to discuss how embedded payroll and benefits work together.
Watch the video here, or read the transcript below.
So what exactly is embedded payroll?
Brandon
If I had to describe embedded payroll to someone who I kinda just met off of the street, I would really position it as a way to serve more small businesses where they already are, in the vertical solutions they’re in, in the accounting platforms they’re in, in the point of sale devices that they’re using day to day, really meeting the consumer where they already are.
How do benefits and embedded payroll work together?
Savannah
Benefits beyond payroll is referring to products that relate to employees’ full financial relationships with their employer. These are the things that impact their take home pay and correct withholdings and the options that give them access to their paychecks on their own terms.
We offer workers’ compensation insurance in partnership with Next Insurance, because in many states workers’ comp is a requirement for businesses with employees.
We also offer health insurance in partnership with SimplyInsured because many SMBs want to offer a comparable compensation to larger companies and in many states it’s cheaper for employers to purchase health insurance than it is for employees as individuals to purchase similar coverage.
We also offer on-demand pay with Clair because many employers, especially those with hourly workers want to give employees faster access to wages and tips that they’ve earned without impacting their cash flow routine related to bi-weekly payroll.
Matthew
Benefits are hard. They’re complex and the offering of benefits and compliance with regulations can be blockers for payroll adoption as well.
They’re highly regulated, just like payroll, and there’s tons of legislation. States and localities with their own rules and the expertise necessary to do all that stuff smoothly and properly takes a long time to build up institutionally.
Gusto’s done that, 10 plus years of payroll, nearly that much as a benefits broker as well, which we’ve been licensed for years and so our track record and expertise in both payroll and benefits compliance is pretty well proven which also gives us the ability to have a really deep understanding of what works and what doesn’t work on the go-to-market side on for both of those things.
Disclaimer: The benefits products discussed in this video are offered by our partners SimplyInsured, NEXT Insurance, Inc., and Clair. Gusto and Gusto Embedded are not directly offering these products or acting as a broker.
Brandon
Just like we don’t recommend building an MVP payroll product, and instead look at the patterns and trends from Gusto’s 300,000+ customers to determine what a sellable payroll product looks like, partners actually segment out their base and research their customer needs regarding benefits. It’ll differ based on the size they’re serving, the industry they’re serving and a multitude of other factors.
Matthew
The first one that comes to mind is Affordable Care Act and the taxes that certain customers have to report in somewhat of a connection to their payroll taxes. If we didn’t offer a benefits solution we would be asking small businesses in states that have ACA reporting requirements, that we’ll handle all your payroll, tax filing, and payment and information. But you’re going to have to go your own way and become a temporary compliance expert. And figure out all this complicated Affordable Care Act, tax regulation and reporting information for yourself, don’t get it wrong otherwise… that’s a pretty bad customer experience. It’s choppy and it’s not very inclusive. That’s one kind of operational example of why our benefits other than payroll has really been helped by our history of expertise in the payroll space.
Brandon
There’s a whole thread of different directions in how these challenges differ across segments, in size and vertical. When we look at a workers’ compensation market, like New York, a business owner can face a misdemeanor for not having that workers’ compensation insurance. Whereas in Washington you have to purchase from a state fund of workers compensation. So all of these regulatory requirements are things that Gusto and our partners have been thinking about and building products for, for many years.
Just like there are lots of regulations around payroll, there are also a lot of regulations around insurance benefits. Gusto knows this, we’ve been a licensed benefit broker for years. This is a very complicated part of the payroll experience. But we know the regulatory side and we’ve also partnered with experts in the field who have built these products with purpose behind it.
Benefits are a really strong component of our post sales partner growth organization. It’s another arrow in the quiver that we have with our partners to get their value ad across. When going out to the payroll customers who might be weighing a standalone legacy solution or looking at another vertical SaaS software that is adjacent to a payroll provider.
Savannah
The Embedded model is unique because it gives you both the support of Gusto.com –- which has been running payroll and offering benefits for years — as well as the flexibility in terms of actually implementing and picking and choosing what benefits and what payroll features you want to implement. It’s super easy to implement any of these add-on services onto your payroll solutions. For most of these, it’ll be implementation of one of our prebuilt UIs through a single API call. Total development time typically takes less than a week.
So what’s next with embedded payroll and benefits?
Matthew
Embedded payroll is honestly just kind of like the natural evolution of some of these other technologies that we’re starting to bring into our own personal lives to consolidate a lot of that stuff and make it easier to manage, which ultimately makes living life a little bit easier.
Savannah
In terms of the potential for embedded payroll, I think we’re really only at the start. We have partners who are implementing, who are seeing a lot of growth. Our engineering team is constantly putting out new features that are our partners are excited about and there’s a lot to go from here.
Brandon
When someone asks about Gusto’s commitment to Embedded, I point to all of the great announcements we’ve had over the past 2 years. I point to the size of the team we’re working with and the sheer excitement and commitment from the team all throughout Gusto. From the partnership growth side of the house, we’re exceptionally excited about helping our partners build out an entirely new business unit and grow it. And make it a cornerstone of their own business plan.
