You might say that Zenefits disrupted the employee benefits market when it came on the scene in February of 2013. It was a good idea, so much so that their top competitor, Namely, quickly came to market behind them. The question is; what is Zenefits? Is Zenefits a PEO? If not, what is the difference? Allow us to explain.
The idea of a Zenefits PEO needs to be squashed. There are many differences between Zenefits and a PEO. Zenefits does seem to be its own animal outside of the traditional insurance buying process though.
Is Zenefits A PEO In Any Way?
Not remotely. From it’s start, Zenefits was an online buying tool for employee benefits. It brokered deals with insurance companies ahead of time and offered that negotiated rate to its customers to take advantage of. Instead of small businesses having to hassle with companies on rates, they were able to take advantage of the work that Zenefits had already done. Not a bad deal, really.
The Zenefits site now boasts over 10,000 different insurance options that customers can avail themselves of with 250 different choices in insurance companies. Who knew there were that many to choose from?
The problem then becomes what the solution is; pre-negotiated. If you want anything negotiated outside of what Zenefits already has set up with their partners, you are not going to get that. What you get with a PEO is the strength of 1,000s of members all paying one low rate with a variety of plans. Small business owners will save a lot more with a PEO than with Zenefits.
If you are looking for a Zenefits PEO, that just doesn’t exist. Although to the casual researcher, it certainly looks similar, this is not what you are getting with Zenefits.
How Does Zenefits Compare To A PEO With HR Assistance?
There are seemingly some similarities but don’t get fooled, if you really dig into the list of HR services that Zenefits provides, what you find is that most of it is just DIY HR on a slick app. If that is all you need, sign up with an HRIS company. Better yet, all PEOs come with one.
Zenefits offers tools for onboarding and offboarding, as well as document management and on-demand HR advice but you are not getting a full HR experience like you would with a PEO. A PEO co-employs your employees so there is more legal implication in helping you the right way. PEOs also provide limited legal coverage whereas Zenefits will not.
So, is Zenefits A PEO like tool when it comes to HR? Not really. They offer lots of information for you to go through yourself, but they aren’t doing to do as much to help you as a PEO is actually legally required to do.
Plus, Zenefits offers no payroll management. A PEO does. If you are going to work with Zenefits on your employee benefits and HR management, you are still going to have to work with another company when it comes to payroll. With a PEO you get all of that and more.
Is There A Zenefits PEO In The Works?
As far as we can tell, there is no plans for Zenefits to launch into the PEO space. With over 700 to choose from as it is, it would be a tough enough sell to make much of a dent. Their space is clearly in taking business away from traditional insurance brokers, not really PEOs.
With a PEO you get a much more robust solution with less expensive benefits. What else could you want? Plus you get limited legal coverage, payroll management and payroll tax management. It is a better way to go for the small business owner who wants to offload the responsibilities of HR and get a better rate with employee benefits.
With no plans for a Zenefits PEO and a better deal with a real PEO, it is worth your time to talk to a PEO broker like PEO Spectrum and see what the right PEO can do for you. If you are researching Zenefits right now, the comparison is worth the phone call.