Zenefits Ditches the Bird and the Broker
The last article we published about Zenefits was in December 2016. At that time David Sacks had announced that he was stepping down as CEO after less than a year in his position. Sacks stated that during his short stint he had “accomplished everything I set out to accomplish,” which included:
Cracking down on Zenefits’ frat-house culture – February 2016
And most notably:
Launching Zenefits’ rebranded platform, Z2 – October 2016
Soon after Sacks’ resignation, a new CEO was appointed. Touted as “a seasoned leader with deep experience in both HR and SaaS,” Jay Fulcher gave hope to a company who was ready to put their past behind them.
But the negative headlines continued:
Zenefits is laying off almost half its employees – February 2017
Surprisingly, the Zenefits name remained untarnished. The company conducted surveys and focus groups and found that 60% of those polled nationwide viewed Zenefits positively. The company only faired significantly worse around the Bay Area. So, as they have many times before, they dusted themselves off and got back in the game.
On September 21st, Zenefits announced a complete revamp of its brand which includes eliminating the origami bird from its logo. But the more notable change is the new business model, a distinct departure from co-founder Parker Conrad’s declaration “If you’re an insurance broker, we’re going to drink your milkshake.” Fulcher revealed that the company is exiting the benefits broker business to focus on its core competency – an all-in-one HR tool for small businesses.
Fulcher said the company plans to partner with local, embedded brokers. Acknowledging the value that brokers provide, especially for small- to mid-sized employers, Fulcher explained, “They (the brokers) can offer the consulting and expertise to walk them through a lot of complexity.”
Zenefits Secures a Partner
Zenefits has chosen its first certified partner, OneDigital, an employee benefits company that boasts being “the nation’s largest employee benefits company” with 35,000 clients, 1,000+ experienced brokers, 55 offices, and $5 billion in premiums. Zenefits 7,000 accounts will reportedly be transferred to OneDigital in a multi-year partnership. In a formal announcement on its website, OneDigital’s Chief Growth Officer Mike Sullivan says the company expects to “triple its $5 billion book of business over the next 5 years: the Zenefits partnership will accelerate growth organically and through acquisitions.”
What are the details of the Zenefits/OneDigital relationship?
While the deal is being presented as a partnership, both OneDigital and Zenefits have declined to discuss the financial details.
Are there other partners?
While Zenefits claims that the OneDigital partnership is not exclusive, and that they are working with five other firms, they have yet to name them.
Is Zenefits really open to partnering with local brokers?
While Fulcher has seemingly softened his position toward the broker community, he’s made clear it’s for the company’s advantage “At some point, we’re going to need to embrace that community if we’re actually going to expand our market opportunity.” The process to become a partner is not an easy one. To become a certified broker, the agency must work closely with Zenefits, go through training courses, education, and certification. “We have developed and built a curriculum,” Fulcher says. “We will [provide] a variety of programs focused on their customer base and helping them deliver a more technology-enabled level of service.”
We want to know…
Looking to the future, do you see Zenefits as an HCM technology partner you can count on, or a future disruptor and competitor to you and your agency?
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