How Thatch is scaling up with Gusto Employer of Record Services, powered by Remote

Navigating the US healthcare system can be a tricky task. Which is why Thatch — a US-based health benefits platform — is aiming to create a more positive experience for both businesses and their employees.

But with employees in more than one country, this fast-growing startup needed a way to streamline their HR and payroll processes across borders.

Here’s how Gusto EOR, powered by Remote, enables Thatch to easily hire, pay, and manage the best talent — regardless of where they are based.

Thatch at a glance

• Headquarters: California, USA

• Founded: 2021

• Industry: Health tech, fintech

As a result of recent law changes in the US, companies now have more flexibility when it comes to offering health insurance. Through Thatch, businesses can give their employees a tax-free budget, which they can use to choose a health insurance plan that works for them.

For instance, an employee in California may opt for a Kaiser plan, while another in Texas might enroll in a Blue Cross plan. Any leftover budget can then be used to pay for the health expenses that matter to the individual employee. 

“With out-of-pocket costs being so high in the US, we want to make the experience amazing for the employee, but also painless and more streamlined for the business owner,” says Thatch co-founder and CEO, Chris Ellis.

“Instead of dealing with the hassle of managing benefits and open enrollment, employers can now give their teams a tax-free budget that they can use how they want.”

Managing a remote team with Gusto

Although headquartered in San Francisco, Thatch’s team of around 20 software engineers, product managers, compliance specialists, and customer success agents are distributed across the US. As a result, Thatch uses Gusto to keep track of all its employee data and state-specific tax information in one centralized system.

“Gusto is the system of record for all our employee data,” says Ellis. “We can run payroll, file payroll taxes, and handle compliance. We also integrate with Gusto to provide benefits through Thatch back to our own team.”

The first international hire

Although this remote-first approach was initially restricted to just the US, the company began to explore the possibility of hiring across borders. And after identifying an ideal software engineering candidate in Canada, Thatch decided to take the plunge. 

“Our first thought was to set up a legal entity in Canada,” Ellis says. “But it was quickly apparent that it would be overly complex and expensive, and not something that we could realistically do on our own.” 

After some deliberation, Thatch opted to use an EOR provider, but managing the company’s US- and Canadian-based personnel through two different systems was also far from ideal.

“Having two systems of record and managing another vendor relationship was inefficient,” says Ellis. “The opportunity cost of my time was pretty significant, the solution wasn’t scalable, and the overall experience for us was painful.

“As a result, we didn’t feel like we wanted to hire internationally until we had a better process in place.”

Enter Gusto Employer of Record Services, powered by Remote

For Ellis, that ideal process came in the shape of Gusto EOR, powered by Remote. The partnership allows Gusto customers in the US to easily hire, manage, and pay global talent — all within the Gusto platform.

“Gusto EOR immediately got us really excited,” Ellis explains. “We knew it was a solution we could scale with.”

Gusto EOR gives us the opportunity to continue expanding our workforce internationally within our existing platform.

Thatch immediately transferred its Canadian employee from the previous EOR provider to Remote — a process, Ellis says, that was quick and easy for both him and the team member.

“We were really happy with the transition,” he says. “We now have everyone in the same system of record thanks to Gusto, and Remote is so much better. It's a relief knowing that my employees are being taken care of.”

Putting compliance first

As the CEO of a business that provides healthcare benefits, Ellis is hugely aware of the potential impact of non-compliance. As a result, he appreciates the importance of working with partners that are compliance-focused. 

“A compliance issue would likely result in a significant legal expense, in order to unwind that challenge,” he explains. “But it could also disrupt the essential work of the team, and the work that international employee is collaborating on.”

Knowing that every aspect of its international hiring — from employment law to taxes — is being handled by Gusto and Remote’s trusted experts gives Ellis peace of mind. And having that know-how and experience on hand frees his team up to do what they do best: give companies and their employees access to great healthcare.

If we have a compliance issue with one of our employees, the business impact would be huge. Having that competency outsourced is a huge benefit to our business.

The importance of transparent pricing

For Ellis, another crucial benefit has been the flat, transparent pricing of Gusto EOR. 

“With our previous EOR provider, we had to provide a percentage of the employee’s total employment cost as an upfront deposit,” he says. 

This was a huge source of uncertainty for Thatch, as it required the company to invest a significant amount of money up front — money that was also subject to currency exchange rates. Without knowing exactly what it would be paying, the company could not calculate how much room it had in the budget for other items, such as marketing campaigns or even a second hire. 

“The price transparency we get through Gusto EOR means that we now know what to forecast,” Ellis adds. “We’re not tying our capital up in hidden fees and variable costs that don’t have an ROI for the business.”

Growing the business with international hiring 

For Ellis, the benefits of hiring internationally are huge, providing businesses with more opportunities to build great products, provide fantastic user experiences, and improve operational efficiencies. If a company never branches out beyond the US, he says, they won’t necessarily be exposed to that diversity of thought.

“With access to a global talent pool, you can harness diverse perspectives and build products that are more inclusive and, ultimately, more innovative,” he explains. “This is essential for getting that alpha over folks who are thinking locally, and focusing on a more US-centric mindset.”

Ellis also believes that the ability to access global talent can give smaller businesses an edge, enabling them to hire the perfect person for a role — even if that person lives in another country. Gusto EOR is key to that.

“It’s the best of both worlds in a single solution,” he says. “You have two specialized companies joining their respective competencies, where their combined value is greater than the sum of their parts. That’s super, super important to us and it’s a great partnership opportunity.”

The Gusto-Remote combination is the optimal solution compared to what we’ve evaluated and experienced in the market. It's a no-brainer if you're planning to hire internationally.

What’s next for Thatch?

As a fast-growing business, access to a global workforce is an incredible opportunity for Thatch. In the coming months and years, the company plans to grow its team to include more software developers and product designers, as well as experts in product, marketing, and operations. 

Being able to hire outside the US will also help Thatch scale more quickly, especially as the US enters open enrollment, a two-month period in which US residents make health care decisions for the upcoming year.

“We’re seeing a lot of growth coming up, and keeping on track is our focus for now,” Ellis says.

“But as we think through our expansion strategy and continue to develop the company, having that access to talent beyond just the US is going to be really critical for us.”

See how Gusto EOR, powered by Remote, can help transform your business — and get started today.