I bullish on Zenefits, the 'scandal' seemed highly manufactured. So much ink spilled over 'The Macro'. Any member of HN would have likely done the same thing. The sales staff used very common software to avoid starring at a screen for a legally mandated 52 hours to avoid what is basically just layers of industry protectionism. It didn't pass the tests for them. The other things called out also seem like cheap shots like throwing parties for high preforming sales staff or not having a lot of backend automation which no startup has and which might not even be possible giving the partners they need to work with and the backward state of many of these protected industries.
Well, yes, many of those "disrupting" startups operate by ignoring regulations, until they get big enough that they can rewrite the rules themselves. That's what Uber and Airbnb did.
It's to be expected that some would get caught.
Also (OT), the two images that illustrate the article are slightly, but very visibly, out of focus. I hope it's not some new trend, because it's quite annoying.
I'm referring to compliance/licensing requirements that have little to do with protecting consumers and everything to do with creating barriers of entry. Things like 'mandatory hours of instruction' which in no way translate to useful applicable knowledge. See also real estate broker or bar exams.
Actually, I would. There are not too many left, but I worked with a couple of people who did not have a college degree. They were certainly competent enough.
Just curious, what is the benefit of staying with the Zenefit name and brand?
It's fairly toxic, as it is associated with debauchery and fraud. Wouldn't you want to raze the brand to the ground and start with something else, even if you're keeping the same tech stack and sales contracts?
So their office was a little bit too 'Mad Men' and they cheated a little on some regulations that seem like they should only apply to b2c relationships when Zenefits is b2b... yeah, I don't care.
If they broke laws I don't have a problem with any legal consequences they might experience, but it doesn't really affect my perception of Zenefits.
Likewise, as an example, Apple getting a $15B tax bill from the EU doesn't really affect my opinion of Apple. Seems like it was the right thing to do, but as a consumer it's just somebody else's problem.
Also, the Zenefits service works. If HR compliance and administration is the business equivalent of going to the dentist for tooth removal, Zenefits is at least anesthesia during the procedure.
Not to condone violating laws, but if the old management was ignoring the insurance equivalent of dealer franchise or taxi medallion laws, and that now has the new management super serious about compliance--that's just an even better service for us users.
My VP of HR said she would be very worried about hiring anyone from Zenefits (even as an engineer), and that she'd want to have a personal, 1:1 conversation with them prior.
I disagree wholeheartedly, but this is an anecdote of signal.
As a former employee, I can say it's totally different than it used to be. Everyone associated with the problems has been shown the door, major house cleaning. The atmosphere is much more serious now, it's a completely different company.
That said, many early employees would have corrected these problems if they were widely known. It was not the lax environment some articles made us out to be. Everyone had to pull their weight and we were very serious about getting everything right. It was a huge disappointment to discover that some department leads allowed this stuff to exist, reducing the value of the many late nights myself and others put in.
> That said, many early employees would have corrected these problems if they were widely known.
How can anyone on the outside be sure there aren't comparable problems which still aren't widely known? I just don't see a reason to believe what Zenefits says because their marketing literature says compliance a lot more now.
>How can anyone on the outside be sure there aren't comparable problems which still aren't widely known?
I'm not sure how any company can provide this proof. However, the rage felt by all the truly dedicated individuals who watched their equity decline in value has drastically changed the culture, everyone is on watch to make sure that doesn't happen again. In addition, new technology and new teams have the explicit purpose of monitoring and maintaining compliance, which I believe are effective. The internal shift to being a "compliance company" is not just marketing speak, it is real.
You can't, which is one of several reasons why the original fuckup was so serious. Your track record matters. Why would a new customer go with Zenefits over someone who's always taken compliance seriously?
If equity value is what's motivating people's desire to not illegally cut corners, I see little reason to assume they won't revert to previous behavior once the spotlight is off, especially as time passes and personnel changes.
Personally, I don't believe there is such a thing. The only careful doctor is one who has made a bad decision that killed a patient; the only careful military officer is one who has had a strategy of theirs fail and lost soldiers under their command. Everyone else has too much bravado, and no emotional revulsion to shortcuts, and so can't be be trusted with real responsibility.
You seem to be claiming that the only people who can be trusted in mission critical scenarios are those who have seriously failed with a non-negligible impact before, as though that is a rite of passage to true understanding. How are you defining failure?
I disagree with the idea that meticulous caution can only be learned by personally failing first. I believe it is fully possible to learn and emotionally internalize the necessity of proper protocols, rules and behaviors in a variety of safety and compliance contexts by learning from the failures of predecessors, and without needing to commit those failures personally.
If this were not the case, wouldn't e.g. insurance companies weight risk analysis algorithms more favorably towards drivers with an accident history, and penalize drivers with no accident history? (This is a simplistic example, but you hopefully get the idea). Do pilots need to experience catastrophic crashes in order to achieve true risk awareness? Do companies need to experience serious security breaches in order to take security seriously? (Many of the most secure companies in the world, perhaps most of them, have never had a headlining security vulnerability).
To continue with your analogy, I see no a priori reason to assume that a doctor is incapable of following e.g. comprehensive checklists to limit surgical error without first experiencing a failure that causes a patient's death. Likewise, I see no a priori reason to assume the same doctor would improve by virtue of having a patient die in surgery.
I think that claim requires evidence to be taken seriously, to say nothing of your secondary claim that people who have not failed have "too much bravado" to be trusted with responsibility.
It's not that you can't have people who are inherently conscientious (heck, it's considered a personality trait); it's rather that it's very hard to filter the non-conscientious people out by anything other than attrition, because in conscientiousness-rewarding industries, the non-conscientious have every reason to pretend to be otherwise.
With the checklist analogy: some doctors are willing to follow checklists; other doctors aren't. Of the doctors who have killed a patient from not following an available checklist, usually all are willing to follow a checklist—for the ones that still aren't, and kept on killing patients, have been disbarred. "Did a bad thing and is still a doctor" is a sort of survival-bias heuristic for filtering out the non-conscientious.
Here's another way to think about this: a soldier might have trained for years and years, and be very good at all the arts of war. But most people would prefer to staff a "hand-picked" strike force with veterans—soldiers who has been in a number of battles, and in particular have been engaged in a number of individual combats—rather than just people with "natural talent." Because attrition ensures that the only veterans who survive are the ones who know their business.
Things like surgery or a military operation are very different than creating a system to avoid licensing requirements. The people who make the life support system for the surgeon or the comms for the officer always take compliance seriously.
Genuine question: why would you make a throwaway to say a former employer, which fucked up, is taking ownership of its mistake and making serious changes to improve itself?
At this point, I actually trust them more than your average startup. They have cleaned house and really made a deliberate effort to shift the culture. Firing a lot of people (starting with the CEO founder) is a decent sign of really wanting to change. The newer people definitely seem much more level-headed and less aggressive. Of course this is all subjective, but trust always is.
There's also the part that further scandal would almost certainly destroy the company completely. So Sacks is likely making an effort to avoid scandalous behavior even more than the average startup.
Compare Zenefits's response to that of Theranos, where Holmes remarkably still has her job after being literally banned from the industry.
Payroll, benefits and insurance are a tricky business. For customers, there is only downside for mistakes. If a company goes with a player with a good reputation then they have a good defense if something goes bad. ("I used the best") If they bring in Zenefits post-scandal and there's a problem, how do they explain it?
> Trying to turn around a failing technology company is almost always a futile task — just ask Marissa Mayer at Yahoo or whoever it is who now runs BlackBerry.
It's amazing how one can respect the difficulty of a job while simultaneously insulting "whoever it is" that does that job. It takes three seconds to google "BlackBerry" and see in the automatically generated card: CEO: John S. Chen (Nov 4, 2013–). Is this supposed to be some sort of journalistic negligence-cum-style?
NBC replayed a John Kerry Cyber Security sound byte and the Zenefits logo was in the background. They were a sponsor of the Virtous Circle Conference. Not sure if Zenefits should have been asked to sponsor this event.
"A virtuous circle is often described as a self-reinforcing system that creates positive benefits throughout the economy."
That's quite the stretch, and I'm even one of the commenters in your linked thread who used to work there. Gusto has made some mistakes on the employee equity side, but, with a few exceptions, it was a wonderful place to work.
That first link refers to a veto of an employee selling their stock; I can't find a reference to a firing before vesting cliff. Do you mean a different link?
