Small businesses love free stuff, so Gusto is giving them free HR Basics
Gusto, formerly ZenPayroll, is the rare startup unicorn that has stayed relatively mum on its product and growth — its last press release, for instance, was more than a year ago. The company’s core offering remains payroll for small businesses, and it has been working to expand its customer base across the nation, including having its CEO, Joshua Reeves, go on a tour of the country to visit SMBs in an RV.
Now the company is opening up a bit on its recent progress. Gusto hit 60,000 customers nationwide in January, or roughly 1% of all employers in the United States, according to the company.
The company is also working on new products. One challenge small businesses face is getting access to high-quality, yet affordable, software, particularly in HR. “Small businesses actually get that people are the core more than large companies,” Reeves explained to me. “In a 10-person company, you know everyone, your customers are your neighbors, but they never really had access to high-quality software.”
Gusto is hoping to fill that gap, announcing the beta launch of a new product it’s calling HR Basics. The product offers a suite of tools for small businesses to handle the quotidian tasks of HR, including managing vacation time, compiling employee directories and improving the onboarding of new hires. Most importantly, the product is free, and doesn’t require a credit card or a bank account to sign up.
Reeves believes that Gusto has two purposes: to offer “peace of mind” to small business owners around areas like compliance that can lead to negative enforcement actions, and to provide software that can help companies become “great places to work” that are more focused on community. Reeves is particularly passionate about the latter point. “Even the terminology ‘human capital management’ — humans are not capital, humans are not resources, they are people, thank you very much.”
One particular area of focus for HR Basics is around onboarding. Gusto is hoping it can move all HR paperwork online, so that everything required to officially onboard an employee can be done even before the employee walks into work the first day. With that out of the way, Gusto can then focus on helping companies create the right corporate culture. For instance, the product offers a “Welcome Wall” where other employees can write cheerful and encouraging notes for a new employee to make them feel like they belong at the company from day one.
This new product is free for businesses, and Gusto obviously hopes that it creates a funnel of potential customers who will eventually sign up for its payroll service and full HR platform, which charge around $6-12 a month per employee based on the specific plan that a business chooses.
One interesting commitment Gusto is making according to Reeves is that an employee’s profile on the platform will be a lifetime account. The company’s vision is that if an employee moves from one company to the next and both use Gusto, all of the preferences and other data required to administer HR would work immediately. That portability mattered less in a world where employees spent decades at a single company, but now that employees often switch employers as often as every year, the repeated savings of time in the transition can be quite significant. Longer term, Gusto sees that sort of portability as critical for facilitating the changing nature of work in the 21st century.
Gusto, which was founded in 2011, is now entering middle age, and the company has 530 employees across its San Francisco and Denver offices, according to Reeves.