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How APIs will revolutionize workforce ecosystems
I’ve been spending time looking at startups that build APIs for workforce systems, like HCM and payroll solutions. Not the easiest topic, but while I was researching a recent presentation about the future of payroll, I was inspired by a couple of articles about the potential of APIs to offer an improved employee experience.
The focus of young fintech companies has been on disrupting the financial services industry. We all benefit from that approach, especially now that we can use our phones to pay for groceries instead of handling cash. But the source of our spending is payroll, and fintechs are eager to move up the value chain and unlock the valuable data hidden in there.
There is no doubt that seamless connections to payroll data can bring great value to employees, or consumers, as they are called by fintechs. But when it comes to privacy and data security there is also a potential for great risk. I’ve been surprised by how few of these young companies really understand what goes on in payroll engines. They are also unaware of how many deviations most company payrolls have, even when they use an external payroll provider.
So this week, you can read how APIs will change HCM and payroll including benefits and risks. I have included the links to the articles that provided inspiration, plus a couple of others that are just good primers if you aren’t technical and need a bit of background.
And the newsletter wouldn’t be complete without an overview of young companies creating new APIs to interact with HCM and payroll solutions.
Let me know if you find it useful and helps you think about what it possible for your future workforce,
When I first started exploring APIs this article provided food for thought. It has a fintech focus, and doesn’t pay any attention to data privacy and security issues, but it articulates the problem, the vision and the potential for APIs in an approachable way.
The author has drawn a great waterfall chart to visualize the relationship between financial and payroll data, and argues that while we’ve been focused on financial data downstream, we should actually move upstream to payroll as the source.
As payroll providers expand to become all-inclusive benefits platforms, combining with banking to offer employers and employees is the next opportunity. Take a closer look at the payroll vendors in the space, divided by early stage, late stage and public companies.
Especially small and midsize companies could benefit from the use of APIs, to expose their data and functionality and increase their reach. By focusing on ‘value exchanges’ while removing friction at the same time, they can uncover opportunities that benefit all members in their ecosystem, including employees.
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What does buying a new car have in common with selecting your next workforce system? There are more similarities than you think:
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