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With Scott Orn

A Startup Podcast by Kruze Consulting

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Scott Orn

Scott Orn, CFA

Gusto and Zenefits disconnect their APIs - what does this mean for their clients?

Posted on: 11/21/2019

Scott Orn

Scott Orn

Chief Operating Officer, CFA - Kruze Consulting

Scott Orn of Kruze Consulting - Podcast Summary

Kruze Consulting COO, Scott Orn, discusses why Gusto and Zenefits are no longer letting their APIs talk to each other, and what this means for startups who use Gusto for payroll and Zenefits for benefits.

Scott Orn of Kruze Consulting - Podcast Transcript

Speaker 1: So when you’re troubles are mounting in tax or accounting you go to Kruze and Founders and Friends. It’s Kruze Consulting. Founders and Friends with your host Scotty Orn.
Scott: Hey, it’s got Scott Orn at Kruze Consulting and today we’re doing a quick hit on the Gusto versus Zenefits API issue. It is not a good time or a fun time to be a customer in both Zenefits and Gusto. It’s kind of hard to tell what’s going on, but essentially Gusto and Zenefits their systems aren’t talking anymore. The APIs are not connecting and these companies that have competed head to head for a very long time, but in the early days a lot of folks including us were on Zenefits HR system and Gusto for payroll. Both companies have kind of mirrored each other over the years. Gusto built HR and onboarding and stuff like that and benefits and Zenefits built payroll. So, they are kind of replicating each other’s stuff, but most companies have stayed Zenefits HR, best of breed, Gusto payroll, best of breed. Now all the customers who use both are getting notices from both companies saying the API’s changes are making it so you have to pick one of the two. It’s hard to tell really, I don’t want to say whose fault it is, but it is customer unfriendly for both companies. It would be much, much better for everybody if they could just put their heads together and make the APIs work. I’m sure there’s some brilliant tactical reasons why you can’t send over some of the basic stuff from Zenefits to Gusto, but it feels like both companies kind of want to become more of an island now and charge more money and make more money. So, this is a good excuse to consolidate customer basis. I don’t know what’s going to happen. The interesting thing about this is it may leave the door open for Rippling and Justworks who both provide great payroll and benefits and HR systems to take customers. If you’re like me who runs Zenefits and Gusto, it’s a real pain in the butt to switch or do anything. As you start to switch, you start thinking well maybe I should be checking out some of the other competitors. Maybe they built something better, easier, or of better value. So, I personally wish both companies would just get together and make their systems talk to each other. I don’t think it’s so technically difficult that it’s impossible. I think this is more business and strategic move by both companies, but it is customer unfriendly. I wish they would make this work. It’s not easy for us as a startup that’s growing really fast to get a week’s notice and have to know you have to switch over to one of the companies completely or they’re going to stop ssyncing. Let alone someone like us who has 200 clients who we look out for and have to try to switch everyone.

So, Gusto, Zenefits if you’re listening, please make it work. Please be customer first and not an island and make yourself into hopefully a single destination for this stuff. If you’re a startup out there, check out Rippling and checkout Justworks. Two very, very good payroll, HR systems. Those are winning systems too. So please Zenefits, Gusto make it work, but if you’re a startup, there are some other options out there too. That’s what’s going on in the startup. Payroll, HR. API wars of 2019. Sounds like a Star Wars saga here, but it’s a little less dramatic, but it is affecting a lot of startups out there. Especially folks like us who use both and who’ve recommended both for many, many years. So, hope that helps and answers your questions on what’s going on between Gusto and Zenefits.

2021 update: If you are trying to find the best payroll system for your startup, Gusto is still a great option. It’s easy to implement and maintain, and comes at an attractive price point. But there is a new payroll system that we are really excited about, Rippling (which we compare to Gusto here). They have a PEO option, plus several other features that we really like in 2021. And increasingly we are being asked how to pay international contractors and employees, as companies adjust to hiring in a remote-first labor market. 
Speaker 1: So when your troubles are mounting in tax or accounting, you go to Kruze and Founders and Friends. It’s Kruze Consulting. Founders and friends with your host Scotty Orn.

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