It’s 2025. Why are employers still wasting billions on manual administrative tasks?
U.S. employers waste billions on manual administrative tasks. Discover how Finch is driving change with an end-to-end connectivity solution for HR and payroll.
Jeremy Zhang is the co-founder and CEO of Finch. In 2020, Jeremy and co-founder Ansel Parikh recognized that fragmented systems and outdated processes were hindering innovation in HR technology. Jeremy has applied his technical background and API expertise to build Finch, the #1 end-to-end connectivity solution for HR and payroll.
A quarter of the way through the 21st century, we have self-driving cars, can print in three dimensions, and AI has gone mainstream. All this technological innovation, and yet U.S. employers are still spending billions each year on manual administrative tasks.
There are more than 150,000 payroll and benefits operations professionals in the U.S. making a combined annual salary of more than $8 billion, but a significant portion of their time is spent on tasks that could be automated instead. On average, employers report spending 5.5 hours per week — or $1.2B per year — just on manual data entry alone.
One of the biggest gaps is a lack of connectivity between core HR systems like payroll and third-party applications. Without connectivity, the burden falls on HR teams to keep company and employee data updated across the business’ tech stack. So it should be no surprise that the demand for connected employment technology is at an all-time high. In fact, a recent survey conducted by Finch found that integration capabilities are the top-most influential factor in employers’ HR software purchasing decisions; but nearly 40% of employers still aren’t using payroll integrations. Why are we still operating this way when it’s so clearly inefficient?
The answer is complicated, but it can be attributed to three root causes. First, the industry lacks a universal data standard. Second, employment data is highly regulated — and no one wants to rock the boat. Combined, these two factors have made it incredibly difficult to develop a universal framework for sharing sensitive company and employee data between different software systems, which leads us to the third root cause: to date, no one has offered the industry a viable, holistic solution.
Solving this problem will require overcoming each of these hurdles; but doing so could save the employment sector billions of dollars each year and introduce opportunities for tech innovation, major efficiency gains, and deep business insights.
Problem 1: The industry lacks a universal data standard
Companies hold their data — about the organization, employee pay, and employee benefits — in systems of record, like HR and payroll platforms. These systems act as the business’s central data hub. All downstream software relies on the data within these hubs to some degree.
There are thousands of systems of record on the market today, each with its own data standard. These standards differ in their field naming conventions and the way they display data (for example: displaying the date in a DD/MM/YYYY format versus MM/DD/YYYY.
These differences might seem small, but they add up to create a language that is unique to each platform. So when one of those downstream applications attempts to integrate with any of these systems of record to access employer data, it must learn how to “speak” a new data language. Once or twice, that might be manageable, but the approach doesn't scale. The cost of a single payroll integration can cost third-party applications upwards of $187,000, not to mention the time and effort of forging a partnership with each individual HRIS or payroll provider.
To create a technology ecosystem that is truly interoperable and accessible, the employment industry needs a company- and software-agnostic data standard.
Problem 2: No one wants to rock the boat
The existing infrastructure that makes up the employment ecosystem is incredibly fragmented. In addition to their individual data standards, all systems of record have their own security protocols and regulatory requirements. They’re also subject to frequent changes to policy, tax laws, and labor regulations and evolving workforce dynamics.
All of this is to say that building an integration between a third-party application and a system of record is a massive technical lift that requires heavy investment of time, resources, and money. If we assume the average engineer’s fully-loaded compensation package is $250,000 per year, and it takes an average of 1,560 engineering hours (9 months) to build one integration, that puts the initial buildout in the ballpark of $187,500.
Since building integrations isn’t the core competency of either company, both are forced to choose between investing in the means of sharing critical data and investing in their primary product offering — a zero-sum game.
Plus, employment data is highly sensitive, and therefore highly regulated. Running afoul of data privacy regulations can sink even a well-established company, so unless it’s absolutely necessary, most simply aren’t willing to take a risk on straying from the status quo — even if it could make them twice as efficient or make their product more competitive.
Problem 3: There hasn’t been an existing solution — until now
Other industries that were once as fragmented and siloed as the employment sector have overcome this problem with unified APIs — just look at what Plaid did for the banking industry.
Unified APIs act as aggregators that allow individual software applications to connect their technology to dozens or hundreds of others through a single technical bridge. The unified API market has taken off in recent years, but very few providers have focused on the employment sector, despite the enormous need for a connectivity solution in this space.
Finch is filling this gap, delivering the connectivity solution that has been sorely lacking in the employment industry. To date, we’ve connected more than 50,000 employers and synced nearly 14 million unique employee records through the Finch platform. By building bidirectional API integrations with hundreds of systems of record and offering that access to third-party applications, Finch is creating a standardized, accessible infrastructure to underpin the technology that makes up the employment ecosystem. This interconnected network of HR tech, benefits, and fintech providers will go far beyond eliminating manual data entry — it will fundamentally change the way we work.
The future of employment technology
Several industries have already experienced a transformation by connecting the various systems that hold critical information. Take the travel industry, for example. The Global Distribution System, or GDS, aggregates real-time inventory and pricing information from hundreds of travel providers into a centralized database that powers online travel agencies from Expedia to Priceline. Planning a trip used to take several hours and many phone calls; today it takes a few minutes and a handful of clicks.
Now apply that concept to the employment industry. In much the same way that airlines share their seat availability with online travel sites, employers can share their own data across internal systems and with outside providers. In practice, that might look like an employer sending relevant employee pay statements to their 401(k) administrator, or syncing the employee directory with their learning and development platform.
What the banking sector experienced with Plaid and what the travel industry achieved with GDS wasn't just about eliminating inefficiencies — it was about unlocking entirely new possibilities. The employment sector stands at a similar inflection point. By creating an open, connected employment ecosystem, we're not just saving billions in administrative costs — we're laying the foundation for the next generation of workforce innovation. The question isn't whether this transformation will happen, but whether your organization will be ready when it does.
Ready to join the revolution? Schedule a call with our Sales team to learn what Finch can do for your business.
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
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