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PSA: Go with Gusto (formerly Zenpayroll) instead for payroll. We signed up for both Zenefits and Zenpayroll several months ago. Zenefits was a nightmare. Zenpayroll has been an absolute delight.

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.

We were among the first 10-15 customers at Zenefits (IIRC), and they were really great when they were small. The problem is that they scaled far faster than they could handle, and we are now happy customers of 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.

+1 We left Zenefits about 18 months ago after a series of colossal screwups on their part. I'm both amazed and not surprised that so many other companies continue to have similar difficulties with them.

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.

+1 we had the exact same bad experience with Zenefits.

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.

Agreed. We're extremely happy with Gusto.

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).

Seconded. Zenefits has been great for on-boarding new hires, but they made mistakes in our health insurance coverage that ended up costing us ~$20k/year. I'm sure Parker and Co. are aware of these issues and working hard to improve, but the reality is that hyper-growth and quality are often somewhat orthogonal.

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).

Since so many people here mirrored that sentiment I'll just say my experience with Zenefits has been mostly pretty good. I have run into a few minor bugs, but nothing disastrous, and the salespeople have been friendly and knowledgable. I'm probably about the easiest business to run but can't really complain about them (other than the ADP snafu, which is at least not entirely their fault).

Our experience mirrors yours...we couldn't be happier with ZenPayroll/Gusto. We signed up with Zenefits recently to try to get the benefits piece in place, and it was a nightmare, both with the software, and the reps/support.

our zenefits sales guy was totally rude, and insinuated that i was wasting his time by rescheduling a meeting, so i just told him i wasn't interested right after that. i'm sure he's doing fine if he feels like he can talk like that to prospective customers.

what is your startup?

i don't talk about it here.

at least you admit it

We had an identical experience.

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.

+1 went for months without insurance because Zenefits continually promised things they could not deliver. Could not imagine a worst experience for such a critical thing.

Gusto (Zenpayroll) has been peach perfect. Going to transfer our healthcare benefits to them as soon as we can.

I am also a happy ZenPayroll/Gusto customer, with one major issue: see how many trackers they have running after you are logged in. It's appalling, and I have filed a complaint.

If you don't mind sharing, which providers did you end up using for health insurance and 401(k)?

We went with a broker based in DC, Joshua Lavine, for health insurance, since that's where we [eventually learned that] we needed to base our plans from. Great experience (well, the DC small business health exchange is a separate sad story.) Health insurance is so complicated and state-specific you really want someone knowledgable.

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.

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