The TriNet-Zenefits Acquisition: Impact on Your HR Solutions and How to Choose a Replacement for Zenefits

In the ever-evolving HR tech landscape, significant changes can profoundly impact small and mid-sized businesses that depend on trusted HR platforms. The recent acquisition of Zenefits by TriNet represents one such major shift. If you’re a current Zenefits customer wondering about your options, this guide will help you evaluate your next steps.

As a Zenefits customer, you already know that Zenefits built its reputation as a user-friendly, all-in-one HR software platform focused on small businesses. Zenefits offers tools such as benefits administration, payroll processing, time tracking, employee onboarding, and compliance management. The self-serve experience made it attractive for startups and growing companies that wanted tech-forward HR support, perhaps without an in-house team or a bundled PEO service. Popular alternatives to Zenefits include Gusto, Bamboo HR, Rippling, and others.

The Tri-Net Transition: What Zenefits Customers Need to Know

We’ve received reports that to continue to use Zenefits companies are being encouraged- or in some cases required- to move into more comprehensive ASO (Administrative Services Organization) or PEO plans under the Trinet Zenefits umbrella.  

While moving to an ASO or PEO may sound appealing to many small or mid-sized businesses, it's a decision that requires careful research and consideration.

Understanding PEO Models: Essential Facts

A PEO, or Professional Employer Organization, partners with small to mid-sized businesses to provide HR support through a co-employment model. This means the PEO becomes the employer of record for tax and benefits purposes, leasing employees back under contract to the client. Choosing a PEO has large implications for your employees, as well asyour company today and in the future. Here are three critical considerations when contemplating going the PEO route:

• Hidden and Escalating Costs: Ask for complete transparency regarding all current and potential future fees, because you may be surprised otherwise. Keep in mind, PEO service fees can multiply and change over time. For example:
  • Fees typically include a percentage of payroll, automatically increasing as your company grows
  • Additional costs may apply for taxes, workers compensation, and health insurance
  • PEOs generally focus on pulling in additional clients whose employees are of a similar health profile to their existing base to keep benefit rates steady. If a PEO is focused on expanding their client size without regard to employee fit for their health insurance, insurance rates will likely increase for everyone under the PEO.
    
    
• Variable HR Support Quality: PEOs often experience high turnover rates and compartmentalize HR functions across different employees. That means:
  • Getting timely, expert advice can become time-consuming and frustrating
  • The education and experience level of representatives managing your HR functions may be questionable
  • Response times may be variable and dedicated support options are limited
    
    
• Difficult Exit Process: Leaving a PEO can present significant challenges, for reasons such as:
  • Exit stipulations are typically strict and may include penalties
  • You'll need to rehire your own employees
  • Transitioning can leave you temporarily without payroll, benefits, and other HR necessities

When considering a PEO, it’s important to know the facts. Our whitepaper ‘7 Things That a PEO Won’t Tell You’ provides deeper insights for companies considering a PEO model.

ASO Models: A Flexible Alternative

An ASO, or Administrative Services Organization, works best for companies that:

• Want outsourced HR help without surrendering control
• Prefer to retain their own benefits plans and policies
• Have limited or no internal HR staff and need supplemental support
  Desire more flexibility than a PEO offers

Selecting the Right HR Outsourcing Partner: Key Considerations and Questions

The good news for Zenefits customers is that you have options, both from an HRIS and a HR support standpoint. As mentioned earlier, there are other low-cost, helpful HRIS systems available for small and mid-sized businesses. And, if you’re at the point where you want to reconsider your HRIS and/or need more HR support from professionals, your options are not limited. Given the current TriNet Zenefits situation, this may be the perfect time to consider changing course.

After all, HR software is not a replacement for an HR professional, nor does it run itself. A person needs to input information on an ongoing basis, manage and maintain settings, and make updates. Secondly, your business is comprised of human beings with unique and personal needs.  No HR representative means no person for your employees to turn in the event of workplace conflicts, personal matters, or career development. Senior management sometimes acts as a substitute for HR; however, given HR’s delicacy and the nuance regulatory laws, this is a misguided and risky move.   

Choosing the right outsourced partner for HR is a critical decision that directly impacts your people, culture, and bottom line. The right partner brings not only expertise and efficiency, but also aligns with your company’s values, communication style, and goals. A good fit ensures you get the support you need—without sacrificing control or flexibility—so you can focus on growing your business while your HR runs smoothly behind the scenes.

When choosing an outsourced HR partner, it’s important to understand:

• Whether you receive dedicated support from an HR professional
• The education and experience of your outsourced HR staff/team
• How many client companies your HR professional manages, and what their response time is
• How your HR professional gets to know your team and culture
• Is the purchase or use of specific software, payroll or benefits required to get HR support
• Their experience with various HR platforms

Download our whitepaper ‘The Indispensable HR Outsourcing Buyer’s Guide’ to help you make an informed decision- and choose the best option for your workplace going forward.

An Alternative to TriNet Zenefits: myHR Partner's Customized HR Solutions

If you’re a current Zenefits – now TriNet Zenefits- customer concerned about higher price points, reduced flexibility, and required bundled options, myHR Partner may be a fit for you. myHR Partner offers full-service HR outsourcing with solutions customized to your unique needs.

The myHR Partner Advantage:

• Tailored Service Model: Select only the services you need
• Dedicated Team: Receive support from an HR Director, Manager, and Assistant -scaled to your unique needs- plus specialist support
• Platform Flexibility: We work across dozens of HRIS and payroll platforms
• Transition Support: Expert HR assistance moving from Zenefits to alternative systems

As the Zenefits-TriNet integration continues, now is the ideal time to assess whether your current HR solution still meets your company's needs and budget. Contact us today for a free, no-obligation consultation to discuss your specific HR needs and how we can help you navigate this transition.