They obviously don't offer identical functionality, but they're getting more similar now so this is a comparison of where they overlap.
Customer support: Both Zenefits and Zenpayroll are very responsive, but Zenefits provides significantly less helpful responses, the kind you'd expect from first-level big-corporation support. Zenpayroll is much better on this front.
Software: Zenefits is clearly not a startup driven by product or engineering. It's fine given it's free, but still has tons of rough edges and bugs everywhere (e.g. it's easy to click submit twice all over the site and create duplicate entries.) I know it's better than the incumbents, but Zenpayroll has a far better product and it really shows even in basic usage-- it's kind of amazing this level of quality now exists for payroll.
Health insurance: If you have an extremely simple situation and are a startup in CA, Zenefits is probably fine. We have about a dozen employees based in DC, SF, and NYC. Instead of telling us to go elsewhere, Zenefits spent two months and dozens of hours/email threads/phone calls making slow "progress", telling me information that ended up being inaccurate, omitting critical information, replying to one out of every three questions, saying repeatedly it would get done, and finally telling me they just couldn't do it.
The Zenefits rep could not have been worse-- if he'd been actively hostile or more clearly ignorant, that would have been better since we would have short-circuited sooner. (Yes, I did complain about the rep... they routed me right back to him on the same call.) Afterward, I called Zenpayroll and their rep was super knowledgeable and set expectations clearly. It was night and day. We also tried talking to Zenefits' partner Ubiquity for a 401k, and had a negative experience there as well.
We've now heard many, many versions of our story above. I wish Zenefits all the best since they've made a lot of startup founders' lives easier (including ours, for new hire onboarding), but boy do they have scaling issues... all I'm saying is, if you have the option of both Zenefits and Gusto for a particular service, 100% go with Gusto.
My only rule with Benefits and Payroll is: do not make me look like an ass in front of my employees. If they don't get paid, or if they lapse in coverage, that makes me look like an ass. They give exactly zero shits about which company failed and where and why; they only know that they lapsed in coverage or didn't get paid. Zenefits screwed that up multiple times, and Gusto has yet to let me down.
That's not to say Zenefits is filled with bad people - I happen to like Parker quite a bit, for example. They just aren't set up to help me win quite yet, whereas Gusto seems to have figured it out.
We spent waaaay too much time dealing with their support team, constantly being shuffled around to different people. At one point we discovered they had left my co-founder's wife off of his policy for 3 months (later acknowledging this was their fault). They're an insurance broker, and they couldn't even sell insurance!
FWIW at the time we were also using Zenpayroll, and had a good experience with them.
We switched over to TriNet for everything mid-2014, which for us was a great choice. We have people in NY and CA, and once we hit 5 employees it was a no-brainer even with the monthly fee per employee. The health plans are much, much cheaper for a similar offering, and our support experience has been generally pretty good after a somewhat rough onboarding. Also all of the onboarding fees with TriNet seem to be pretty negotiable. But overall the most important thing is that we're saving money and spending very little time or energy worrying about HR matters.
It looked easy and nice at the beginning, but quickly became a nightmare when they did mistakes for half of our employees. Once mistakes were done, it became harder and harder to contact their customer service. The rep was nice but completely ignorant.
It's sad to see that Gusto/Zenpayroll, who provide a very high quality service, doesn't grow as fast as Zenefits.
We tried Zenefits first and had a similar experience to yours. It turned out they couldn't help us get health insurance based on the number and locations of our employees. We went over the details in the first call (and subsequent emails), but it was probably 2 weeks and a handful of communications more before they said they couldn't do it.
Their payroll sync (we used Paychex at the time) seemed pretty buggy and confusing too. Support was not helpful.
Gusto's product and support have been amazing. Their phone support team has helped with some hairy issues for us.
(I have no other connection to either company).
On the other hand ZenPayroll has been amazing. I take an unreasonable amount of pleasure deflecting inbound sales forays from the likes of Paychex and ADP (may they die in a fire).
I just counted and I have two threads with Zenefits - one with sales and one with acct mgmt. The first thread with sales has 38 emails, and the account management thread has 16 emails. All of this to get set up as a new, tiny little company (4 employees at the time).
The craziest thing was that I didn't need to be "sold." I had used Zenefits previously, and filled out the form on their site to create an account, and got kicked into an incredibly long and painful manual onboarding process that took over five weeks, multiple calls, and 50+ emails.
Gusto got us set up in 20 min. with one automated workflow.
I understand that enrolling in healthcare is a more complex process than payroll, but it felt like I was working with a very traditional insurance broker.
Running a startup myself, I'm usually really empathetic toward startups with growth pains, but there were many things about the process where Gusto far exceeded expectations and Zenefits really underwhelmed me.
Gusto (Zenpayroll) has been peach perfect. Going to transfer our healthcare benefits to them as soon as we can.
We went with Captain401 (a YC startup) because we needed a fast turnaround and they had amazing service. Too early to render judgement otherwise. OctaveWealth is another seemingly competent YC 401k startup. If you're not in a rush and don't want to trust a startup with your company's 401k plan (though assets are safe regardless), Vanguard is great, and would have been our backup option.
Note here that they quote $4/month/employee in the "Pro" plan, but the prices are actually $48/year/employee or $6/month/employee. There is no $4/month plan.
Also, it both obfuscates the price and creates the impression that you can trial the product without being locked in.
If it didn't confuse people (even if only unconsciously), it wouldn't be such a widespread practice.
And this is the key observation about those sales practices. Most of them work, because you're being dishonest. You only call it "growth hacking".
Also, I hate Intuit Payroll (and it's cost me a small fortune due to deadlines being missed and other random crap based on Intuit requiring constant babysitting to do anything on time), so I'm signing up. If it supports multiple states, I am totally on board.
What's more interesting is that the payroll is free only if the company manages everything else HR related in Zenefits. Talk about lock-in.
> As Conrad tells it, a select group of Zenefits employees holed up in the Courtyard Marriott to start working on a secret project to create a payroll system shortly after paycheck services giant ADP cut the company off earlier this year.
> “We’ve been working on this basically since the day we started getting blocked by ADP,” Conrad told TechCrunch.
There is zero chance I'd subject employees to a hacked together payroll system. Building one is far from trivial, considering the complexities of tax and employment law in 50 different states.
So, yes, it's hard to build. That doesn't mean that no one can do it. Many companies have done so, including several startups. And, given how poorly one of the market leaders (Intuit) has implemented it, I'm willing to give a startup a try.
Not entirely, no. There's a history of Zenefits customers and their employees suffering from serious technical and support failures.
>in late February this year, with coverage supposed to start days later, Zenefits informed Hawkins that it had made a significant mistake, attempting to enroll his employees with an insurance provider that didn’t cover the company’s region. The insurance wouldn’t come through as planned. [...] In several cases employees like Harris, who had put their trust in Zenefits, were left without health insurance for a month or more after they had expected it.
Not an ADP user I presume.
I wish a payroll startup would put resources into a nice UI and having some really season support too. Just doesn't seem to be there yet, unfortunately.
Payroll/Benefits is long overdue for disruption.
Employee X terminated, check is $22.8k instead of $23k.
Employee Y has three policies for a single benefit, but only two get paid through the employer.
Is this all automagically handled by the UI in a simple 'SSN or Policy' amount does not match for these three records, how do you want to apply the $30? 'No record found for Employee X, reason for non-payment?' Does Zenefits handle managing/forwarding that to all to the carriers?
(disclaimer: I work in insurance)
It's great to see competition in this space. ADP and the other dinosaur providers in this area have had it too good for too long.
There has to be quite a few companies who have benefits with Zenefits and payroll in Gusto; wondering what's ideal moving forward.
A salesperson from Gusto (fka Zenpayroll) who we use for payroll sent me multiple emails about switching to Gusto for benefits, so I emailed, "Hey - We're currently running everything through Zenefits. Are there any advantages to switching over?" and I never heard a response.
Could have been a mistake (i.e. forgot to respond), a bad salesperson, etc. but not having any differentiators makes the decision tough on my end.
We're fundamentally different than Zenefits in a few very important ways, so accessing all of Gusto's features still makes sense:
1) Payroll is your system of record in your back office and quite simply, we believe computers follow rules a lot better than humans do. Zenefits functions on a “hub-and-spoke” model… they’re the hub, we’re the spokes. But that's already an outdated functionality-- there should be no spokes when it comes to payroll and benefits—they are really just one single hub functioning in unison. Removing the spokes and human operations that Zenefits uses removes the opportunity for error.
2) We’re a customer service organization, not a sales organization. With the technology comes the vital human touch—you’ve got your dedicated Care Team trained to support your benefits just like you have a Care Team trained to support specific payroll needs.You also have your dedicated and experienced Benefits Advisor for business and benefits strategy planning. This way, you can go to one partner for all your back-office needs rather than using an intermediary to control several different disjointed resources.
3) Because it’s all in one place, you get one beautifully simple experience for your entire team—administrators/managers and regular employees. That means onboarding your employees' payroll and benefits in one place while we help you navigate the confusing world that is US Health Care Reform.
Basically, we love you as a customer and we want the best product experience for you. That happens when you use the full Gusto platform to combine payroll, benefits, and compliance.
It wasn't very convincing to me, and I think it might be an even harder sell now that Zenefits is launching payroll. I love both companies but I definitely would prefer to have everything integrated in one platform.
I'm happy to pay the money and get the faster response times, better website, and stronger relationship with ZP (errr Gusto).
We'll probably move off of Zenefits entirely soon.
But Zenefits handles more than just benefits for us. It's a fully-featured HR platform, which makes employee on-boarding super simple. I wonder if Gusto will go that direction, because I'm so tied to Zenefits right now I can't imagine living without it.
After leaving Quickbooks for a contractor based business, I've been looking for a solution for 1099 work outside of "do it by hand" which I can and am prepared to do, but it takes a long time.
edit: to be clear, this is a separate product from payroll.
"Includes everything from Self-Driving Mode plus the ability to directly customize deductions, earnings, and more."
I don't have any clue if the free plan would work for me or not.
The custom experience where you can go in and configure things specifically for payroll without making those changes in Zenefits, that's the one they're charging for
I'm also confused by that line, and the plans in general.