Hiring W-2 employees comes with its share of compliance challenges that vary by location. Payroll taxes healthcare benefits and paid sick leave just to name a few issues. The winner of SIA’s “Shark Tank” competition — Ascen — aims to handle these difficulties on behalf of staffing firms with its employer-of-record platform.
The company won the annual pitch competition at this year’s Collaboration in the Gig Economy conference in September. The competition is styled after the television show “Shark Tank.” Executives from five firms in the workforce solutions ecosystem pitch their product or services; judges then evaluate them on quality of presentation, level of innovation and market potential.
Ascen’s employer-of-record platform serves staffing firms and talent platforms, enabling them to employ provide W-2 workers. It also offers agent-of-record services, allowing firms to engage independent contractors, and it handles funding.
“I think Ascen is operating in such a massive space,” judge Robert Biederman, managing partner of Asymmetric Capital Partners and co-founder of Catalant Technologies, said in an interview after the competition. Fellow judge Shashank Saxena, general manager of Vndly, said the idea behind Ascen looks like something that can gain traction; he noted, it doesn’t make sense for staffing firms with less than $5 million in payroll to have their own back-office team.
Employer of Record
Employer-of-record firms, especially those with global operations that enable clients to hire workers in nearly any country, were making news earlier this year with large funding rounds. However, Ascen is primarily focused on staffing firms and talent platform firms serving the US. It also focuses on roles that are typically in-person, including healthcare, which comprises a little more than half of Ascen’s business.
“We do invoicing, payroll, onboarding, funding, background checks, time sheet management, time sheet approvals — everything that you would need to do in the context of staffing contingent workers, our platform does,” CEO Francis Larson says.
The company is working to be a one-stop shop. It enables small firms to rely on its platform without also using numerous other applications. As a technology company, it develops its own software, and that can ease the way for integrations with existing tech stacks at larger staffing firms. Ascen also offers its platform on a white-label basis. “Their logo is on the web, on the onboarding. It’s on the emails, it’s on the invoices,” Larson said. “We focus on the customer’s brand, we’re really in the background.”
Ascen didn’t initially start as an employer-of-record firm. It was accepted into startup accelerator Y Combinator in 2019 with the idea of becoming an online labor marketplace. However, part of that effort involved being able to employ workers as W-2s. It sought an employer-of-record to assist, but because there were no good options, the company developed its own system.
Filling the Gap
“We quickly realize that, OK, we’re doing it ourselves,” Larson explains. “But a lot of other companies just like us have this problem … So, we productized it, and we immediately got traction with folks.”
In the future, Larson sees fewer firms that handle all aspects from sourcing to curating talent to back-office operations. Instead, there will be firms focused on sourcing, firms focused on curating talent and employer-of-record firms that are great at the “plumbing” needed to handle back-office operations.
Staffing firms traditionally have paid less attention to onboarding including making the payroll funding a seamless experience for workers and the companies that pay them. Firms like Ascen are doing what it takes to fill the gap.