Could payroll protect your platform during a recession?
Head of Payroll Operations
The recent release of Chat GPT-4 has furthered my long-held belief that technology seems to be advancing faster than ever before! And while technological progress is happening at an incredible clip, the economy doesn’t seem to be keeping up. If you’re like me, you might be wondering what the expected economic downturns will mean for the tech industry. It’s not uncommon to have some concerns in a time where many industries are struggling to keep up with the changing economic climate.
Thankfully, payroll technology is proving to be an exception. Unlike other industries in tech, payroll is a necessity that is less likely to be affected by an economic downturn.
When times get tough, businesses are forced to cut costs by eliminating services that they deem non-essential. However, payroll is not one of those services. As businesses tighten their budgets, they are less likely to cancel their payroll service because it’s critical for any business to offer timely and accurate payments to their workers. Said differently, everyone loves (and needs) payday!
This resilience of the payroll industry is not surprising given that first, payroll is a fundamental aspect of any business and second, maintaining payroll compliance is not easy to do alone. The rules around taxes can be convoluted and tricky. That is why a good payroll provider is so valuable. Abstracting the complexity of payroll and enabling platforms to pay people simply is exactly what we do at Check.
Check provides a complete solution for businesses that are looking to add payroll to their time tracking, vertical SaaS, or HR products. On their own, any of these platforms could be seen as less valuable than a product that has added payroll because, with payroll, the overall offering becomes so much more valuable to the businesses they serve. The addition of offering payroll adds value to the product itself. Not only is the platform adding substance by expanding the services it offers, but it is adding a service that might help it withstand an economic downturn. Any benefit or compliance software will deeply increase its value with payroll as an offering and adding payroll functionality to these platforms can make them stickier during a recession.
For example, take a workforce SaaS platform that has decided to add a payroll offering. That platform has become a more comprehensive, even more indispensable solution that offers more significance to customers just with that addition. Conversely, any payroll-only company may lose out to a workforce SaaS solution that is offering more than just payroll. Workforce SaaS solutions are laser-focused on their customers’ needs and this expertise allows them to tailor a payroll solution specifically for their customers.
All of this is to say that adding payroll could help platforms fare better during a recession. Payroll is an essential service that is likely to survive economic fluctuations. In fact, the payroll industry is actively growing. According to a recent study, the global payroll industry is projected to grow from $25.3 billion in 2022 to $37.3 billion by 2030.
Adding payroll to an existing product can help any workforce management or vertical SaaS company provide a complete solution for businesses. And it might just protect the platform from the otherwise inevitable ebbs and flows of the economy.
- Small Business Credit Survey - United States Federal Reserve Banks
- Payroll Outsourcing Services - Global Strategic Business Report - Research and Markets
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