Zenefits tries to move past controversy with the launch of its new HR platform


CEO David Sacks hopes to get past the enterprise company‘s licensing debacle with its new offering, Z2.

In a bid to get past its most recent controversies, Zenefits is launching its long-anticipated, integrated human resources app platform, called Z2, today, with 17 third-party partners as part of the effort.

In an interview yesterday, CEO David Sacks said that he hopes Z2 will eventually attract hundreds of apps that customers will be able to access to manage a wide range of their employee functions. In addition, the San Francisco-based company is adding a number of other features to its platform, such as benefits shopping online and an HR advisor service.

“It is a little of a celebration of a lot of the progress,” said Sacks, who sounds more than a little relieved to get Z2 out. “This makes it a true platform.”

Besides HR, benefits and payroll that Zenefits’ product already offers, customers can also use the outside apps to manage other important employee functions, such as expenses, performance management, employee engagement and productivity. Partners include Salesforce, Slack and Microsoft’s Office 365.

Z2’s dashboard of HR apps from third-party partners.

The all-in-one HR solution is the first new product to be rolled out under the leadership of Sacks. He took over at Zenefits in February in the wake of a controversy after it was revealed that its former CEO created software to allow its sales people to avoid certain state licensing requirements. Zenefits operates in a highly regulated space, so this was a major no-no. (More like oh-no-no-no.)

Sacks has worked hard to rid such practices from the company and reform its too-aggressive culture, as well as working with state regulators to assuage their criticism. Zenefits has reached settlements with more than a dozen states, although it still needs to get back into the good graces of California, perhaps the most important national player.

“We know we had a compliance issue, and that is fixed,” said Sacks. “I feel confident that we will have those remaining states in compliance soon.”

Intro-ing new products is critical to the company’s salvation, as new competitors like Gusto, Namely and already entrenched older players have made up ground against Zenefits. The turnaround has already extracted a big price — Zenefits was once valued at $4 billion, a valuation which has been cut in half to $2 billion.

That’s why the redesign of the HR dashboard software is critical to the restart, pointing the company in a new direction.

“To the outside world, we are solving the compliance issues,” said Sacks. “But inside, we have been focused on this release, and we think we can now leapfrog the competition.”

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