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Zenefits is majorly shaking the HR industry with their revolutionary “free” payroll and human resources solutions. We found out that Zenefits has created an industry-changing pricing approach by charging benefits providers rather than business owners.

Parker Conrad, a major groundbreaker in companies such as Wikiinvest and SigFig, founded Zenefits in 2013. He wanted to help startups and small businesses find affordable insurance quotes and provide benefits managements in one platform. Y Combinator, a startup accelerator, was one of the big major backers of Zenefits when they first opened their doors in 2013.

Many people are noticing Zeneits. It is an all-in-one HR solution to many businesses and is one of the fastest growing HR software companies in the industry. Many customers like the ease of employee and manager access, as well as the powerful user interface and menus that make navigation easy.

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The Good

  • Pricing
  • Features
  • Partnerships
  • Stock options

The first thing that we really liked about Zenefits was the price and transparency. On the website, we were able to find all of the features in the product in an easily downloaded PDF. We also noticed that there were many screenshots that captured the platform in action.

Here is a list of the powerful core features of Zenefits:

  • Employee Database & Directory
  • Interactive Org Chart
  • Onboarding Management
  • Workflow & Manager Approval
  • Benefits Management
  • Custom Reporting
  • Custom User Roles
  • Custom Fields
  • Employee Self-Service and Manager Self-Service
  • Alerts & Notifications
  • Document Management

The first feature that we noticed, the document management potential, streamlines your paperwork process. This is a core feature for new hiring onboarding. We found that a manager could provide offer letters and agreements. It is also possible to upload a PDF of your employee handbook, as well as provide non-exempt employee notices. We also found easy management for all your core paperwork, including W4s, I9s, and other documents that are important for the verification process.

We found that Zenefits also creates a powerful and dynamic social directory for all of your employees. You can see all tiers within your company, pictures, and critical information for each employee.

Another feature of Zenefits is that you can make the time clock process easy. Whereas Kronos requires a time clock and badges, Zenefits lets your employees turn their mobile device or computer into their punch card. Employees clock in simply by snapping a picture. Employees also have the power to update their timesheet if the time clock solution is not a necessity for their business.

There are also powerful admin features within Zenefits. You can empower different managers and players within your company to hire and terminate employees. You can also delegate benefits management to certain HR managers with your company. Finally, you can create custom approval flows to scale how your company does business.

Zenefits doesn't take care of your payroll processing; it simply does the administrative work. We found that Zenefits integrates with most of the payroll platforms out there, including Paychex, Zen Payroll, and Intuit QuickBooks.

One of the other added benefits of Zenefits is that the company has major partnerships with benefit providers, helping you find benefits solutions for your small business. These companies include MetLife, Delta Dental, and other major providers. These companies pay Zenefits, shouldering your cost of free software.

So, in short, here are the things that Zenefits will help your small business best with:

  • Payroll administration.
  • Document management, including I9s and other documents.
  • Selecting a benefits provider.
  • Stock options management.

We found that Zenefits offered a stock options management for your company, a one-of-a-kind in the HR industry. You can send employees stock offers with Zenefits. If your employee chooses to forfeit their options, Zenefits even takes care of the ACH transfer!

The Bad

  • Setup
  • Backlog

We couldn't suggest too many changes to improve Zenefits. In fact, we looked up Zenefits and found that their co-founder came out and said some of the things that Zenefits could work on:

  • Zenefits implementation is a little bit slow at first; it usually takes about 4-6 weeks to set it up.
  • There can be a bit of a backlog with payroll and benefits access as Zenefits sets up its customer accounts with benefit and payroll providers.

We did like the fact that we found the co-founder's response on Quora.

We weren't able to get a lot of information on Zenefits tax preparation processes. While they do offer document support for I9s, W4 and other verification documents, we weren't sure whether Zenefits also took care of W2 fillings. We did find out that they take care of 1099 filings for free.

While it looks like Zenefits takes care of payroll processing for free, they actually only manage your payroll process. You still have to get your own Paychex, or other provider, solution. We found that, because of this, many businesses are only using Zenefits for benefits enrollment at this time.

The Bottom Line

We wholeheartedly recommend Zenefits for your business. At this time, they are one of the leading providers in the industry and all there services are free.

You still have to outsource your payroll to a third-party company, such as Paychex, to use Zenefits. The platform only provides payroll management for your employees, not the actual processing of your payroll and paperwork.

Be aware for the slow turnaround time that Zenefits takes to implement. We found that Zenefits takes 4-6 weeks to get the benefits enrollment process fully integrated into your HR system.

We did find one current event to watch in the news. We found out that the State of Utah is trying to shut down Zenefits. Zenefits will soon to be going to court to determine whether or not they can continue offering their services for free in Utah. The lawsuit from Utah alleges that Zenefits shuts out traditional insurance providers. If other states follow Utah's suit, Zenefits might someday charge for its services.


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User Reviews


2 Reviews

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Mohamed Khalifa
May 17th, 2017 Brooklyn, NY

Very poor customer service. tried to reach out to someone by phone to discover that the hotline is open only to make sales and generate revenues to Zenefits...I was disappointed.

June 1st, 2015 Austin, TX

I am an independent contractor, and one of my recurring clients decided to use Zenefits as a means to keep a record of his payments to me, and for the convenience of direct deposit from his account to mine. According to the Zenefits website, it can take up to 7 business days for the funds to transfer from one account to the other. The first payment my client submitted was taken from his bank account, and never deposited into mine. We waited the full 7 business days and still nothing. My client could find no evidence of a problem on his end, but the money had been taken from his account. After 8 days, all I noticed on my Zenefits profile page was that the status of my client's payment had changed from "pending" to "failed," but the money was not returned to my client, it simply was gone. I went into my account settings and discovered there was an error made in my bank account routing number, so I corrected it. After two more days of waiting, and the payment still not showing up in my account, I emailed the Zenefits tech support staff, and told them that I had corrected my routing number mistake. I also asked them how long It should normally take for a client payment to process and also if there is some way I can be notified of errors or glitches that could be impeding the process? The next day the payment was finally in my account, but I did not receive an answer to either of my questions. The next payment that this same client of mine submitted tome via Zenefits was deducted from his account, and this time there was a full 8 business days that elapsed before I had to contact tech support to see if they could tell me what the problem was. In this message, I again asked if they could explain to me why it was taking so long for the payment to reach me when it is so promptly taken from my client's account. I also told them that my client and I were seriously reconsidering using Zenefits any more if these problems were going to persist. Two days later, the payment was deposited into my account, and there was no reply to my questions. If there had been at least a little bit of an effort on Zenefits' side to contact me and let me know that they had at least gotten my messages and were looking into the problems, I would not be leaving a review like this. I've never experienced anything like it before anywhere, and as such, this is the first time I've ever felt compelled to take the time to relate how unsatisfied I was with their services and the way I felt totally disregarded as a customer.