ZenPayroll Moves Into Benefits, Changes Name to Gusto The expansion puts the online human-resources startup squarely in competition with larger rival Zenefits.

By Catherine Clifford

Opinions expressed by Entrepreneur contributors are their own.

Gusto

Small-business payroll and health insurance software isn't necessarily the sexiest tech space, but it sure is heating up. Online human-resources platform ZenPayroll announced today that it is changing its name to Gusto and adding services that put it squarely in competition with larger rival Zenefits.

For small-business owners, managing payroll and benefits for employees has historically been a painful, headache-inducing process. That's where companies like Gusto and Zenefits come in. They automate and streamline the processes.

Related: How to Make 5 Routine HR Tasks Quick and Painless

The newly named Gusto is adding health benefits and workers' compensation to its payroll processing services, according to an announcement from the company today. At first, the health benefits service will only be available in California. It will gradually roll out to other states.

The new name, which allowed the company to expand beyond payroll processing services, is a reference to a feeling of enthusiasm.

"Our new name Gusto was inspired by our customers and their teams who show courage and passion in the work they do every day. When you work on something you care about, with people you enjoy spending time with, it's an amazing feeling," the three co-founders wrote in a blog post. "That energy. That oomph. That's Gusto. We believe everyone has the potential to feel this way at work."

Related: 5 Ways to Generate Business Through LinkedIn

Meanwhile, its rival Zenefits -- which had previously partnered with ZenPayoll to manage its payroll processing -- is also reported to be building its own software for processing payrolls. As of May, the company was valued at $4.5 billion. ZenPayroll's valuation was last pegged at $560 million.

For now, Zenefits is keeping its game face on, saying it's not worried about Gusto's new expansion into its turf.

"The size of this market and the speed of the disruption are likely to attract many new entrants. We're happy we started on this journey a little more than two and a half years ago, and as the market leader and pioneer in the category, believe that no one can match our product and how easily and automatically Zenefits eliminates the administrative work behind running a small business," Kenneth Baer, a Zenefits spokesperson, said in an email.

Related: Man Accidentally Sends Naked Selfies to HR Manager After Receiving Job Offer

Wavy Line
Catherine Clifford

Senior Entrepreneurship Writer at CNBC

Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.

Editor's Pick

She's Been Coding Since Age 7 and Presented Her Life-Saving App to Tim Cook Last Year. Now 17, She's on Track to Solve Even Bigger Problems.
Lock
I Helped Grow 4 Unicorns Over 10 Years That Generated $18 Billion in Online Revenues. Here's What I've Learned.
Lock
Want to Break Bad Habits and Supercharge Your Business? Use This Technique.
Lock
Don't Have Any Clients But Need Customer Testimonials? Follow These 3 Tricks To Boost Your Rep.
Why Are Some Wines More Expensive Than Others? A Top Winemaker Gives a Full-Bodied Explanation.

Related Topics

Business News

The 'Barbie' Movie May Have Caused A Global Pink Paint Shortage

The long-anticipated film is slated to hit theaters later this summer.

Business News

California Woman Arrested For $60 Million Postal Service Scam

Lijuan "Angela" Chen faces two charges that each carry a maximum sentence of five years in prison.

Growing a Business

How to Harness the Power of Data Analytics for Business Growth

To thrive in the competitive landscape, entrepreneurs must understand and leverage the power of data analytics.

Leadership

The Return to Office Movement is Causing a Mental Health Crisis. Employers Are Part of The Problem — But They Can Be Part of The Solution.

Employee mental health substantially worsened with the return to office demands, and it's causing disengagement and low morale. The solution demanded by employees is the answer.

Latest News

9 Ways to Harness Entrepreneurial Skills in Medicine

Entrepreneurship and medicine may seem like divergent paths, but integrating entrepreneurial skills into medicine can lead to innovative solutions and professional fulfillment.