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This is basically because Zenefits and ADP indirectly compete. ADP, Paychex and some other major payroll providers make quite a bit of money be using their rel

This is basically because Zenefits and ADP indirectly compete. ADP, Paychex and some other major payroll providers make quite a bit of money be using their relationships with companies to sell insurance and other benefits to their customers. Zenefits is basically an insurance broker, and therefore competing with ADP on this front (which is a lot of revenue for both companies). Payroll really shouldn't suck, the basics of it should be pretty easy. The problem is that the vast majority of payroll providers are nearly impossible to work with. Disclosure: I work at Employii, a company that makes payroll/hr software designed for integration with insurance brokers.

olafskyansian 11y ago
When you think about where the $$$ is, they DIRECTLY compete. I think the thing people don't realize is that there is way more money in insurance than there is in payroll, ADP knows this and so does Paychex. At my last company, I think we paid about $90 per employee per year for payroll processing, W-2s and employee self-service. A broker commission for health insurance is conservatively 3% of the total annual premium. So with an average family premium (employee and employer) hovering around $17k a year, the commission on that plan would be $500+ dollars, well over five times what you could earn by actually doing payroll. an employee electing single coverage with a total premium around $7k a year is still far and away more valuable than "payroll" If you look at ADPs earnings transcripts for the past year, you'll see this area is where the growth is at. It's even stronger at Paychex where benefits constitutes basically all of their growth.