Leveraging embedded finance to maximize employee experience

How leading HR software companies are developing finance features to improve product experience for workers

Max Cutler
April 14, 2023

Today, it is essentially unheard of for a company, big or small, to operate without human resources software behind the scenes. While these tools are often administrative or organizational in nature, the best-in-class solutions are centered on improving employee experience.

There are many ways to improve employee experience. Here at Swan, we have seen how transformative it is for HR software when they add finance features to their offering. From cards for employee benefits to salary advance payouts, bringing financial features into your offering is perhaps the best way to improve the product experience for your end users - both employees and HR teams. 

Let’s dive into how you can upgrade HR products with embedded finance!  

Benefits cards allow for flexible spending of pre-tax wages 

Companies building software to improve employee experience are increasingly adding benefit card issuing capabilities into their products. Two companies that did just this, by partnering with Swan, include Payflow, from sunny Barcelona, and Milan-based Tundr.

Tundr and Payflow couldn’t have launched banking features on their own without going through a lengthy and onerous process of acquiring regulatory approval. This is where partnering with a BaaS provider like Swan comes into play. 

Let’s look at Tundr. They enable customers to offer employees benefits cards that can be used for approved purchases. As a regulated financial institution, Swan partners with Tundr on card issuing, compliance/KYC, and payment control, so that the company can focus on delivering an ideal user experience. 

Here’s how it works: Tundr clients send a certain share of an employee’s gross paycheck to an (Swan) account linked to the employee’s benefit card. This money can then be spent on pre-approved goods or services. Using Swan’s payment control feature, leaders can approve certain types of purchases, so that, for example, only transactions related to mobility are processed. 

For companies, issuing benefits cards to workers improves employee experience. In much of Europe, taxes are quite high. Giving your employees flexible remuneration as a benefit does wonders for retention, hiring, and overall branding at relatively little cost to your company. 

Payflow, a leading Spanish software company, offers a quite similar product they call ‘Flexflow’. A main difference, however, is that local regulations in Spain limit how much money can be disbursed tax-free. Employees who want to buy additional stuff, beyond legal limits, can do so by topping up their cards. Payflow has built nice-looking software that communicates these varied flows well. 

But Payflow launched not just to offer benefits cards. Payflow is primarily providing a way for employees to get access to their salaries on demand.

We love when the products and infrastructure we build are put to use to make folks’ lives easier and give them access to money they have earned. Salary advance schemes put this affinity front and center, endowing workers’ with more control over their finances. 

Salary advance protects your workers from unforeseen circumstances

Even though much about how we work in the 21st century has changed, many workers still receive one paycheck at the end of the month. With all the complexities and surprises of modern life, people need flexibility accessing funds that they have earned. 

Our world is complicated. Whether due to an unexpected accident or a loan request from your cousin with two kids, sometimes we need access to our salaries in an emergency. No one should have to worry about whether they'll be able to retrieve their money during tough times.

That's where salary advance comes into play. Salary advances embedded in the company HR tool gives employees the possibility to access wages ahead of time. So, in the event of an emergency, instead of heading to an unscrupulous payday loan provider (who will offer them punitive financing terms), you can simply give employees access to wages they've already earned, within a tight and delightful UI. 

They will be more productive and want to stay around, with the knowledge that they can make it through troubling times via a salary advance, supported by you.   

When it comes to the nuts and bolts of orchestrating these early salary payouts, Swan has the perfect infrastructure to get you well on your way towards launching an excellent product. 

Using Swan’s payment orchestration APIs, salary in advance payouts can be carried out. By setting up one account for your company, you can automate SEPA payments to the IBANs of those who have requested salary advances. While obviously there are integrations necessary and fine details to understand, it really is that easy to collaborate with us to launch an embedded finance feature. 

Expense cards give workers autonomy to own their budget

Every professional has ownership of their own projects, their own scopes, their own KPIs. They should, then, also own their budget. Decentralizing finance brings this to each team member. An empowered employee feels trusted to do his best work with the autonomy to spend when they need to.  

Our partnership with Lucca, a leading HR management platform, illustrates how nicely cards for paying expenses integrate with other tooling for human resource professionals. 

Customers of Lucca no longer have to pay company expenses out of their pocket. Instead, they have a debit card they can use to book trains, pick up the tab at important client lunches, or to make small purchases to support the office holiday party. 

For admin & finance teams, this represents a significant improvement for their UX. Rather than having to chase down employees for receipts and missing out on VAT refunds, all relevant purchase data is routed directly to the finance cockpit. Reconciliation is basically automatic. 

CFOs and managers can make use of payment control to ensure their colleagues are spending money appropriately and have right-sized budgets depending on their role and responsibilities. 

Lucca started by adding payment accounts, before integrating single-use virtual cards into their offering to enable employees to make one-off purchases. However, the partnership with Swan truly flourished when Lucca started offering debit cards. 

Lucca's customers have the flexibility and power to give their employees control of their own spending. Meanwhile, Lucca benefits by broadening their already impressive product scope while unlocking a novel revenue stream, via shared interchange. Truly, everyone wins!  

You can add banking features and enhance employee experience too! 

The raison d’etre of human resource software is to improve the employee experience, for everyone. 

Benefit cards, enabled with Swan’s issuing capabilities, give employees access to pre-tax money for sustainable commuting, working on self-improvement, and covering incidental costs. Salary advance can be even more impactful, offering a lifeline to an employee who needs access to funds quickly and discreetly. Finally, expense cards put the employee in the driver’s seat when it comes to making purchases on behalf of the company. This empowers and entrusts workers to get what needs to get done well and efficiently. 

As a SaaS for HR, you can do even more to improve employee experience for your end users by building finance features your users will love. Come talk to us! 

Max Cutler
April 14, 2023
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