Since last year, Jay Fulcher has been chairman and CEO at Zenefits, an HR platform that was roiled by compliance and regulatory issues in 2016. Brought in to turn the company around, Jay brings more than 20 years of experience in leading both public and private technology companies.
I spoke to Jay about what made him want to take on leadership at Zenefits, and how he’s changing the company culture and business.
What made you want to take on the role as CEO of Zenefits given the company’s past?
I knew stepping into the CEO role at Zenefits would not be easy; however, it was precisely that challenge that compelled me to take it on. I did my homework. I talked to a lot of customers, partners, analysts, competitors and regulators. I met with a lot of industry people who were familiar with the small and midsize business market. I quickly aligned with our investors on my findings, and soon had a plan for what I wanted to accomplish even before my first day on the job. All of this made it clear to me that this was just an epic opportunity – too good to pass up.
In the first three years of its existence, Zenefits developed incredible technology and had a clever business model that disrupted the employee benefits industry for SMB’s. While the company’s approach to being a “digital broker” took them slightly off course, the problem Zenefits focused on remains the same: leveling the playing field for SMB’s by providing a comprehensive “people platform.” Today, our platform helps more than 11,000 SMB’s across the U.S. empower their modern workforce, manage change and stay compliant. Our platform delivers the most comprehensive, mobile HR experience in the market across HR, benefits, payroll, time and attendance, well-being and performance. We combine these tightly integrated apps with advisory services and partner applications to radically simplify HR administration by reducing paperwork and complexity so companies can focus on starting, running and growing their businesses.
I saw a great opportunity to help turn around a company that had the right industry insight and innovative spirit was capable of regaining its footing and drive the industry forward. Zenefits’ previous hyper growth and existing customer enthusiasm was clear evidence that the company was still well positioned to be the eventual SMB market leading HCM platform. Zenefits had already become the core of business operations for thousands and thousands of small businesses and I knew that with the right focus, we could help ensure these businesses, and many more new customers, could utilize the same sophisticated capabilities that until now were only available to the F500.
With that goal in mind we shifted from a tech-powered insurance broker that offered free HR and benefits software, to a software company powering small business operations and partnering with best-in-class brokers across the U.S. And, while such a drastic shift in business direction has its challenges, this new approach proved to be very, very successful. More than 70 percent of businesses who were relying on Zenefits as part of our former freemium business model, transitioned to be paying customers. This allowed us to complete the rest of our product portfolio and invest heavily in making our platform industrial strength. As a result, we are once again one of the fastest growing tech companies, only this time we are a SaaS software company with best-in-class partners providing a best-in-class customer experience.
With the history behind you, what have you done to help change the culture and business?
Culture has a such a direct impact on the success of any company, and that’s a belief I have carried with me throughout my career – not just at Zenefits. Culture isn’t about ping-pong and kale smoothies. It’s about a shared set of values that galvanize a company to succeed. It’s about how business gets done and what people do when no one’s watching. Culture is about radical transparency and clear operating expectations. It sets the tone for “… how we do things here.”
Companies often have multiple “founding moments,” and in early 2017 Zenefits was reborn. Since then, I’ve been fortunate to attract a very talented and accomplished leadership team to guide the company through our next phase of growth and make “Zenefits 2.0” a major success. Our team has helped me set in place a clear culture, with the right values, and a commitment to operate with integrity in every facet of our work. In August 2017, I was pleased to bring on Beth Steinberg as Zenefits’ chief people officer to help us rethink our approach to people and talent as we build a strong, resilient workforce. We also built out an employee Advisory Council, instituted employee engagement best practices, and appointed Pat Wadors, chief talent officer at ServiceNow, to our board of directors. All of these things have contributed to helping us follow through on our commitment to being a company that not only is making a huge difference but one where our employees can thrive and do their best work.
Business performance is one way you can judge whether the changes we have made have produced results. In the past 12 months alone we’ve achieved a number of big milestones – impressive triple-digit revenue growth, new product launches and 90 expanded features in our platform, low employee attrition v. the market, and much higher customer satisfaction and promoter scores. All this, coupled with new company leadership and a clear vision, underscore how the company is successfully executing against its ambitious strategy. I am so proud of what we have accomplished this past year but I know the best is still ahead of us.
What’s next for Zenefits?
We have so many interesting things on the horizon, but there are some recent announcements that we are particularly excited about. Last month at our annual SHIFT customer conference held in San Francisco, we announced the Zenefits Employee Well-being application in partnership with Arianna Huffington’s Thrive Global to enable a completely new approach to employee wellness for small businesses nationwide. In our experience with thousands of SMB companies across the nation, employee well-being has become a critical concern which requires a holistic approach to solving issues related to stress, burnout and life balance. Today’s business leaders must recognize the needs of the whole person – not just the one who comes to work from 9-5. At Zenefits, we believe caring for your workforce goes beyond compensation and basic employee benefits. It includes personal and professional development, learning, community engagement and more.
As a promise to our customers and to advance the state-of-the-art in HR for SMB companies, we plan to continue to deliver new solutions and technologies that allow SMB’s to adapt to tomorrow’s trends. We are and will continue to be the all-encompassing platform that helps drive small business forward.
M.R. Rangaswami is co-founder of Sand Hill Group and publisher of SandHill.com.