With two new tools geared for execs, Zenefits software services now targeting SMBs beyond the HR office
What does HR software services company Zenefits do with its monster $500 million round of funding that it announced a couple of weeks ago?
Why, it builds a bigger carrot to lead companies to its insurance offerings, of course.
Zenefits — touted as as the fastest-growing software as a service company, EVER! — revealed two new additions to its suite of free software for small- and medium-sized businesses that automate human resources work such as compliance, on-boarding, payroll, and benefit management. With today’s release of “Zenefits for Managers” and “Zenefits Business Intelligence,” the company seems to be taking aim at business leaders outside of the HR office.
The "Manager" tools give company executives, who may not take part in day-to-day HR decisions, access to update the system without going through HR. With Zenefits, new service higher-ups can add new hires, update job titles, and change an employee's salary on their own, with the goal of improving company wide workflows. Zenefits' BI offering gives the same targets — executives, CMOs, CTOs, etc. — a dashboard of data that analyzes HR-related issues like up-to-date headcounts, the dispersement of compensation, and more.
While the new products will definitely help to alleviate some of the communications logjam between HR and the C-suite, in reality, the services are just another clever way to onboard SMBs to Zenefits platform and then sign them up for the insurance products that actually makes the company revenue.
As Zenefits Parker Conrad explained to me when the company announced its Series B funding (and, as I can assume he does often as a quick Google image search will bring up pictures of the Zenefits CEO caught invariably in moments of using his hand to explain how a wheel works), the chief executive likes to describe his company's unique model as a wheel with many spokes that feed a central hub. In his anecdote, the spokes are all the parts of the wheel that make money for the hub that is Zenefits. For Conrad, the free software services that the company gives away to SMBs makes life easier for HR, and now, executives, which will eventually lead to more avenues for revenue.
But currently, the company's insurance products are the main source of money, so there really is only one 'spoke'. A better description is that the spokes seem to be all Zenefits' business services working in concert to create the best all-in-one HR software experience available. At the center, holding it all together, is the insurance that Zenefits sells to the customers who take advantage of the SaaS.
The question is, is Zenefits' approach a noble way to help smaller businesses or is it a manipulative way for what is in essence an insurance brokerage to get more customers? The answer is likely somewhere in the middle.
Which gets me back to Conrads spoke and wheel. Take the same imagery, and start hammering the center of the wheel. Eventually, you get a funnel which is a more apt way to describe what Zenefits does.
However, take that funnel, turn it around, and attach it to any type of vehicle — say for this example, a chariot — and you have a weapon out of Ben Hur able to cut down competitors. I imagine this is how many in the insurance industry look at what Zenefits is doing these days.