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Zenefits Versus the Competition

Zenefits offers comprehensive plans with HR, payroll, and benefits in a one-size-fits-all platform.

If you're ready to get a Zenefits demo, we suggest getting in touch for a look at the product and quote. Otherwise, read on!

Ratings

3.9

Ease of Use

Best For

Key Differentiator

Price

Starts at $8/employee/month

Free Trial

Yes

PROS

  • It’s one of the top names in HR tech and payroll software for American small businesses. 
  • Their platform is one of the best-looking and easiest to figure out among the sector. 
  • Zenefits can grow with you. Its pricing plans allow you to pay and tweak as you go, add certain modules when you need them, or get rid of them if you don’t.

CONS

  • As oriented to small businesses as the tool is, it doesn’t give you the chance to create a custom bundle of the services and/or modules you’d like to have. For instance, Zenefits does not offer a standalone ACA module. Therefore, you will need to purchase an entire HRIS plan if you want to access that offering.
  • In addition, Zenefits focuses on small to mid sized companies. If you're an enterprise organization, you may want to consider another option. 
  • Zenefits is also rather focused on the US market at this point. So, if your team is mostly in another country and you need more of a local know-how, it might not be the best bet for certain modules like payroll and benefits.
Phil Strazzulla
HR Tech Expert, Harvard MBA, Software Enthusiast

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Zenefits Review

As one of the top names and at some point one of the fastest-growing startups in the world of HR tech for small businesses, Zenefits is always worth considering. Whether you’re in the market for an HRMS, a payroll management system, a benefits platform, or even ACA consulting, Zenefits offering should be a part of your research.

We at SelectSoftware have been familiar with the tool for years. We have tried it both as users and managers, and have watched it expand and even go through tough times, only to become stronger and more interesting with time.

At its core, Zenefits is a payroll automation, core HR and benefits management tool oriented towards small businesses in the United States. The tool can take care of processes like onboarding, benefits, payroll, performance reviews and much more (see our features section). 

Notably, Zenefits is specially built for smaller organizations with an average customer size of just under 50 employees. As such, it’s very much a self-service product. Employees can go in and consult their info, for instance, and even choose their medical plan from what’s made available to them. 

Other HR processes like onboarding can be completely automated if all the necessary steps and forms are set up properly. For instance, even offer letters can be programmed to send automatically for certain types of hires.

Also, since the tool was very much based around payroll from day one, it can also help with managing contractors, freelancers, and of course, full-time and part-time employees.

Finally, user experience and ease of use has always been a strong suit of the company. As a Silicon-Valley-adjacent company, they’ve been able to hold and retain some of the top talent in disciplines like UI/UX.

If you stop to think about it, their platform kind of looks like an Airbnb with different colors, which means that as when booking a cabin in the woods for a trip, you won’t have to go through their help center or call support to figure out how to set up payroll for a contractor.

Lastly, Zenefits also stands out among most HR software for SMBs providers for having an ACA offering. Their ACA compliance tool will generate, review, and provide forms to employees electronically while e-filing everything with the IRS. 

Especially noteworthy is their Compliance Assistant. This is a dashboard that offers detailed explanations on critical compliance deadlines and allows you to set reminders to avoid IRS penalties.

Who shouldn't buy Zenefits

Companies, even small ones, in need of a single solution might find the plans a bit rigid. If for instance, you’d like to have the payroll tool alone, you can’t purchase it by itself. It has to be an add-on within an existing plan.

Zenefits Customers

Since they focus on the small business sector, you likely won’t see huge brands among Zenefits’ customer list. You might see one of the local brands you interact with, however! Their “Customer Success Stories” page is frequently updated with profiles of their customers and how they’re making good use of the product. Rather than name drop several companies this time, we’d suggest checking that out.

Zenefits: HRIS All-in-One with Great UX
visit Zenefits

Zenefits Key Features

  • Business intelligence reports: Get insights on turnover, workforce diversity, and employee compensation.
  • Making offers: Within Zenefits, you can create compensation packages and auto-send offer letters for new employees, freelancers, and contractors.
  • Flexible and comprehensive benefits: Most payroll software that provide benefits pick benefit plans for you from their pool of services and carriers. Zenefits, on the other hand, gives you the freedom to “shop” for the best benefits plan in their marketplace. It also gives you the tools to compare benefits to choose the most affordable. If you already have your own benefits plan from your preferred broker/carrier, Zenefits can help manage and administer the plans seamlessly in their platform.
  • Basic HR function: Zenefits is the one payroll software for small companies that does not isolate payroll from human capital management functions like onboarding, compensation, time and scheduling, etc.
  • Advisory services: Zenefits provides unlimited access to top HR and payroll experts to help you manage complicated situations. 
  • Multiple labor codes: You customize codes to get detailed breakdowns on your people costs. Data can thus be analyzed by department, location, position, or whatever you set up.
  • General ledger reporting: Zenefits generates payroll reports that are swiftly brought into your accounting system of choice.
  • Automatic federal and state tax filing: You can choose to let Zenefits handle the most common forms for employee taxes at any level.

Zenefits also offers:

  • Performance management
  • Time & scheduling
  • People enablement
  • Org charts 
  • Reports
  • Direct deposit
  • Tax withholding and filing (W-2s, 1099s)
  • Multiple schedules and pay rates
  • Wage garnishments

Zenefits Key Integrations

Zenefits can connect with over 50 other applications to improve workflows and provision new employee accounts. These applications are across the HR tech spectrum, like Greenhouse, Level, Quickbooks and Bonusly, but also include 401(k) providers or the usual business tools like Google Workspace and Slack. Zenefits is also Zapier-enabled.

Zenefits Pricing

Zenefits starts with the following plans: 

  • Essentials: This plan costs $8 per employee per month and packs all of Zenefits’ core HR features, employee time and scheduling tools, 3rd party integrations, as well as access to Zenefits’ mobile app.
  • Growth: This plan costs $14 per employee per month and includes all of the features under the Essentials plan, plus compensation and performance management tools.
  • Zen: This plan costs $21 per employee per month and includes all of the features under the Growth plan, plus tools and services for employee well-being tracking, employee engagement surveys, as well as access to Zenefits’ People Hub, where employees and admins can communicate and collaborate directly in their HR system of record.

 In addition to the above, Zenefits offers the following add‑ons that can go on top of any of its base plans:

  • Payroll: $6 per employee per month.
  • Advisory services: $8 per employee per month.
  • Benefits administration (with your own broker): $5 per employee per month.

The Essentials plan features ACA compliance. If you have 50 employees, the ACA minimum, it will cost $400 per month at its least expensive. However, if you use your own insurance broker, it's an extra $5 per employee per month. They offer a free two week trial before you have to buy. 

Lastly, for larger businesses looking into Zenefits, Enterprise pricing is available upon request.

Zenefits is Best For

Zenefits is made for small and mid-sized companies. Their mission is "to level the playing field for the other 99.7% — the underserved small businesses that fuel our economy." 

Those who make the most out of Zenefits are US-based SMBs that require HR services and employee management functions together with payroll and an ACA compliance tool. The platform’s tips reporting is also a good feature that could be especially beneficial to those in the restaurant business.

How has Zenefits Changed Over Time?

Zenefits Implementation

Zenefits offers detailed documentation for you to handle its implementing phase. Setting up the tool depends on how long it takes your team to import your organization's information and policies into Zenefits.

For smaller companies, they estimate that this usually takes as little as a couple of hours. For larger companies, it's usually a matter of a couple of weeks. In general, however, Zenefits’ team guarantees that you can be up and running between 2 to 3 weeks. Getting started with their free trial takes minutes.

Zenefits Customer Success

Zenefits has a help center with articles for customers to self-serve. If further assistance is required, customers may also reach out to Zenefits’ support team by logging a support ticket.

About Zenefits

Zenefits was founded in 2013 by Parker Conrad and Laks Srini. The duo had considerable startup experience in the tech world, and they were inspired to develop the tool after the launch of Barack Obama’s Affordable Care Act, especially considering Conrad’s experience as a cancer patient.

The idea was to put technology in the hands of employees and managers so they could better manage benefits, like health insurance, provided by the employer. The concept caught on and Zenefits became one of the fastest-growing tech startups ever. Within two years of getting started, the company was valued at $4.5 billion.

After the great start, however, the company saw some controversy in 2015. Buzzfeed News reported that the startup had allowed unlicensed brokers to sell health insurance through the platform. Zenefits faced a lot of media backlash for not enforcing these legal requirements, but they self-reported on the matter and hired an independent firm to do an internal audit of their licensing controls across all 50 US states. 

Internal transformation notwithstanding, Parker Conrad had to step down from his role as CEO (he would then start the company Rippling, now also a household name in the world of HR Tech for American SMBs) and Zenefits was eventually fined by California’s insurance regulator and had to reach a settlement with the state of Tennessee. 

In 2017, with a new CEO in place, the company changed its business model from insurance brokering to the SaaS payroll and benefits management-oriented platform it is today. Also, in early 2022, Zenefits was acquired by TriNet, a publicly-traded PEO company. 

By the time of the acquisition Zenefits was used by around 23,000 SMBs, impacting over 600,000 people in various industries.

Company HQ

San Francisco, California

Number of Employees

450+

Year Founded

2013

Amount Raised

$584.1M

FAQ

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