{"id":214,"date":"2022-11-16T09:43:25","date_gmt":"2022-11-16T17:43:25","guid":{"rendered":"https:\/\/embedded.gusto.com\/blog\/?p=214"},"modified":"2025-09-03T11:08:01","modified_gmt":"2025-09-03T18:08:01","slug":"the-case-for-embedded-payroll","status":"publish","type":"post","link":"https:\/\/embedded.gusto.com\/blog\/the-case-for-embedded-payroll\/","title":{"rendered":"The Case for Embedded Payroll"},"content":{"rendered":"

After two-plus years of economic uncertainty, businesses continue to look for new ways to do more with their foundational operating systems, and the case for embedded payroll grows stronger.<\/span><\/p>\n

Solution providers are listening by adding more services to their platforms. Bolstered by the success of embedded fintech, experts believe embedded payroll is the next big embedded offering, presenting a golden opportunity for solution providers to increase deal size, provide more valuable package tiers, and dramatically reduce customer churn. Read on or watch\u00a0<\/span>The Case for Embedded Payroll Webinar OnDemand<\/span><\/a>\u00a0to learn more.<\/span><\/p>\n

Why Embedded Payroll? Why Now?<\/span><\/h2>\n

The world has changed over the past two years. We\u2019re still feeling the effects of the Covid-19 Pandemic. Economic uncertainty is high, and we\u2019re technically in a recession. And what do businesses do in times of recession? They start looking at their expenses, at their tech stacks, are start asking whether the solutions their utilizing are need to haves or nice to haves. Money doesn\u2019t go as far as it used to so they look for ways to cut costs, reduce expenses, and the focus turns or at least should turn, to cross-selling and retaining the customers we have versus going out and trying to acquire new ones. It\u2019s simply a matter of economics and opportunity cost. The fact is it\u2019s more cost-effective to try and retain existing customers versus going after new ones.\u00a0<\/span><\/p>\n

SMBs Want More services in their operations systems<\/span><\/h2>\n

These additional services are exactly what we’re seeing and hearing from the market. SMBs are reducing their tech stacks and looking to accomplish more from their foundational operations platforms. Likewise, solution providers are adding more services to their platforms by acquiring adjacent solutions, partnering with solution providers, and even building additional capabilities in-house because they know the benefits. Not only does it increase their solutions’ stickiness, but it also increases deal size and annual contract value at a relatively low customer acquisition cost.<\/p>\n

SMBs are adopting these additional capabilities at rapidly increasing rates. Of the more than 6 million small businesses in the United States, more than 2.5 million are using a vertical SaaS solution across virtually every industry. On top of that, VC companies are pouring money into these platforms to help solutions providers build more and more quickly. Are calculations estimate VC companies invested more than a billion dollars into vertical SaaS solution providers in 2021 alone.\u00a0<\/span><\/p>\n

Furthermore, these additional offerings are core to operating a business. Things like embedded payments, benefits, employee management, and, more recently, embedded payroll. Why? Because these things are core to business operations. They’re foundational and a natural extension of what many of these solutions provide to their customers, like time tracking, employee scheduling, and tracking vital personal information about their employees.<\/p>\n

Embedded Fintech Success is Paving the Way\u00a0<\/span><\/h2>\n

Bain Capital released a recent embedded finance report titled “Embedded Finance: What it Takes to Prosper in The New Value Chain.” In it, they highlighted a number of growing trends in the embedded finance space:<\/p>\n