Human resources (HR) software and management system Zenefits shook up the human resources (HR) tech world—and raised more than $500 million in venture capital (VC) funding—by offering cloud-based HR software for free. Zenefits makes most of its money from fees its small business customers pay to use it as their employee benefits broker as well as from fees for add-on modules. So, what do you get for nothing? A lot as it turns out. But, even with all of its features, Zenefits did not win our Editors’ Choice award in this HR software and management system roundup, which is a recognition that went to BambooHR.
But, when it comes to benefits administration (BA), Zenefits is best-in-class and earned our Editors’ Choice in the category. To beef up Zenefits’ core functionality, and to distance itself from past controversy and scandals, the company introduced Zenefits Z2, a revamped version of the software that includes a new HR App Directory, 27 partner integrations, an open third-party app developer platform, mobile apps and HR Advisor, a new HR-as-a-Service (HRaaS) app for small business owners and human resources administrators. Zenefits Z2 also includes a benefits shopping and enrollment marketplace modeled to feel like an e-commerce experience. Aside from partnering with Checkr, to provide easy access to an online background checking service, Zenefits also announced new partnerships in May of 2017 with Google Hangouts, Microsoft Teams, and Slack allowing the system to share information with these apps.
Editors’ Note: After reaching an agreement with Washington state following the state insurance commission’s decision to ban the Zenefits free software model, the company will charge $5 per employee per month for its HR software in the state (includes HR Advisor). Additionally, the launch of Zenefits Z2 introduced a number of additional paid premium apps in addition to the free core HR platform.
The Zenefits user interface (UI) is well-mapped with easy-to-understand instructions for completing basic HR tasks, and provides a quick way to connect with existing benefits plans including medical, dental, vision, long and short-term disability, and 401k retirement savings providers. If you’re starting a business and don’t have providers, you can fill out Microsoft Excel worksheets, get quotes, sign up, and get started.
What is offered is just right for startups and small businesses with full-time, part-time, and hourly workers. The software includes applications that streamline hiring independent contractors and setting up paid time off (PTO) policies and stock options—all the staples of a startup. Although the tool is ideal for companies with two to 200 employees, it can scale up to 2,000.
The Z2 update added a host of new features that help to propel the tool closer to the top of its category. The 27 integrations that are enabled throughout the platform at launch include productivity, payroll and accounting, expense reporting apps, stock options, performance management, recruiting, and employee engagement apps. Zenefits Z2’s automated workflow dynamically updates all relevant documents and integrated apps—from Expensify, Google’s G-Suite, and Microsoft Office 365 to Salesforce, Slack, and Intuit QuickBooks. So even though you’re using independent applications within the Zenefits hierarchy, all information is ported to anything connected to your system.
Onboarding a New Employee
Log onto Zenefits and you will see a well-organized main dashboard with clearly labeled buttons for specific employees and specific Zenefits Z2-enabled applications. All Zenefits users log onto the same dashboard. You can use the Settings > Administrators and > Managers tabs to set up who can see what so, for example, a manager can approve vacation requests for people in his or her department but not see disciplinary actions for employees who aren’t direct reports.
Zenefits Z2 runs off of a single database, so all information new employees add automatically populates other functions in the software, saving the duplicate entries that older HR systems were known and for which they were hated. Before new hires start, they also can upload work eligibility documents such as a driver’s license or green card. If a company owner wants to run a background check, it’s one of the extras for which Zenefits charges. A standard check is $25 plus county record fees ranging from $3 to $65, and a premium check to search everywhere a new hire’s lived in the past 7 years costs $35 plus county fees.
Once a new hire completes his or her profile, an admin or manager adds in their hire date, salary, and other relevant information. A manager can use the Employees > View tab to see newcomers in an employee directory or organization chart, or filter worker data by status, job title, department, or other parameters. Similar employee record management processes apply to recruits, employee promotions, terminations, and basically any employee-related event that you’d like to track within a human resources management system.
Zenefits Payroll is a full-service payroll tool available in New York, New Jersey, Connecticut, Colorado Arizona, California, Washington, Texas, and Florida. The tool will be rolling out nationwide eventually, but it is immediately unclear when the general rollout will be complete. Payroll costs $35 per company and $5 per employee per month (users outside of these states, or users with existing payroll solutions, will be able to integrate Zenefits Z2 with their third-party payroll provider of choice). Payroll integrates with all the other Zenefits Z2 apps, including Time Off and Time & Attendance, so that your payroll is updated whenever changes occur within your organization. This gives administrators the ability to review and approve vacation requests, sick leave, personal leave, and more from within one dashboard.
One of the coolest new features is a live paystub preview that allows an admin to make last-minute changes that are synced with the information in other apps associated with the employee. Also new is the Zenefits Timekeeper App for iPad, which allows employees to clock in and out with a selfie. Depending on the policy each business sets, an employee could check in by using a specific iPad when they enter the office or simply clock in via the Zenefits iOS and Android smartphone apps. Read this piece for more detailed information about Zenefits Z2’s extensive mobile functionality.
If your company already has benefits providers, then use the Medical/Dental/Vision > Existing tab from the main dashboard to link to existing policies and renewal dates. You’ll be directed to appoint Zenefits as your primary broker, which generates form emails to carriers that you sign and the company submits on your behalf; getting approved takes an estimated four to eight weeks. Zenefits has more than 250 licensed brokers on staff and its software syncs with more than 20,000 insurance plans and 250-plus carriers.
If you don’t already have coverage, then Zenefits makes it easy to get quotes from dozens of medical, dental, vision, life, and short-term and long-term disability insurance carriers. Just download and fill out a Microsoft Excel spreadsheet, upload the form, and Zenefits takes care of the rest. Zenefits’ HR software also includes a Paid Time Off (PTO) module, commuter benefits programs, and 401k retirement savings plans through several partners. Finally, Zenefits takes care of termination benefits (aka, continuation of health coverage) with Consolidated Omnibus Budget Reconciliation Act (COBRA) benefits and unemployment insurance. Zenefits automates benefits during employee onboarding as well as automatically calculating deductions each pay period.
Where Zenefits really stands out in BA, and where it earns our Editors’ Choice in the category, is in the comprehensiveness and variety of its options plus a ton of management features for both employers and employees. For employers, Zenefits lets managers shop for plans and design custom benefits packages and monitor employee enrollment and renewal statuses, but more importantly, offers business intelligence (BI) reporting on benefits data.
On the employee side, Zenefits simplifies administration with a self-service benefits portal. Employees can update their own benefits coverage and personal information, and view and print medical insurance cards online. The Zenefits mobile apps also allow employees to pull up a digital version of their benefits information for quick use at appointments—an extremely useful mobile feature not offered by other vendors in this roundup, including BambooHR. The all-in-one debit card can combine Health Savings Account (HSA), Flexible Spending Account (FSA), and commuter benefits into a single card.
Zenefits is also Affordable Care Act (ACA)-compliant and, beyond basic medical, dental, and vision insurance, also offers benefits modules for options including workers’ compensation, property and casualty insurance for businesses, and a key feature for startups: the ability to issue and manage stock options through a partnership with eShares (a fairly common perk for a newly launched startup that is aiming to recruit top talent).
The HR Advisor application, which is new to the Zenefits Z2 revamp and costs an extra $5 per employee per month, includes a knowledge base library of how-to articles and tools that cover topics such as benefits and compliance. It’s a way to give admins basic guidance on tasks such as creating a job description, setting company policies, or drawing up documents such as job applications and performance reviews. The app, available within the Zenefits app marketplace, also lets users request advice and support from Zenefits licensed brokers and in-house HR experts.
Zenefits’ simple UI, built-in benefits management, and easy connections to multiple payroll providers make it a superior choice for a small business that wants to put as much of its people operations as possible onto a single HR service and not spend a lot of money to do it. It’s our Editors’ Choice for BA software and, particularly for startups, it’s an easily customizable platform that just works.