Zenefits- a company valued at around 4.5 Billion$ (2014), that sells cloud-based HR software has been under the microscope lately. From scandals surrounding invalid insurance licenses, to the company’s crazy culture (not to mention the company’s own CEO Parker Conrad stepping down after all of this media circus!) – it’s been a crazy year for this company that was considered one of the most successful startups in 2015.

Sources from the Wallstreet Journal obtained a memo from the Zenefits office; telling employees to refrain from smoking- dumping their trash and getting jiggy in the office stairwell! How could they have been so successful amidst this pure abandon and almost reckless office culture? Was their greatest strength their Achilles heel? Despite doing well financially- they become a bit of a running gag now that they have been exposed this way, and we wonder how the new CEO David O. Sacks will pick up the broken pieces of this vase.

We know that Spring Fever is on it’s way- is there a way to keep a reign on your business to avoid this type of crazy debauchery? I think there are things we can learn from the Zenefits scandal.

1.Background Checks should be more thorough- and don’t get greedy!

Zenefits was criticized because they let unlicensed insurance brokers sell health insurance products to companies…because they were making so much money! That’s right- they got greedy and made bad decisions. Check your staff- don’t settle for someone who “appears to be licensed” – check all your references and paperwork and don’t just let things slide for some extra money- it really doesn’t pay out in the long run.

2. Company Culture does not mean Office Playground

Sex in stairwells? garbage everywhere? Smoking and sloppiness? COME ON. I don’t even need to elaborate on this point much more- but as a manager- or anyone in a leadership role for that matter- it must be understood that this behavior is not productive. Strengthening bonds are best done with company giveaways and prizes, not necessarily by procreating- certain bonds should be kept for OUTSIDE the office!

3. Be Mindful of your Brand and Social Media

Another Scandal attached to Zenefits occurred when the CEO at the time, Parker Conrad, publicly refused a job applicant on Quora Last May .A Quora user posted:  “What is the better way to start my career: Uber or Zenefits?”.

Conrad wrote: “ Definitely not Zenefits. Mostly, it seems like where you really want to work is Google (“I think that [Zenefits] isn’t as exciting a brand name to have on your resume when applying to the likes of Google.”). You should just apply there. If you’re able to pass our engineering interview, I’m pretty sure you could get a job there…… we are revoking the questioner’s offer to work at Zenefits).” – Source Quora (you can follow this link to view more details on what Conrad wrote)

https://www.quora.com/Zenefits-CEO-Rescinds-Job-Offer-May-2015/Should-Zenefits-CEO-Parker-Conrad-regret-publicly-rescinding-a-job-offer-on-Quora
REALLY? REALLY? It’s OK for a CEO to want to personally answer a question on Quora, but this is really going too far. It was just a simple inquiry… what did Parker really know about the candidate? Is this a fair evaluation of a person’s competencies? On social media company branding is oh so important- and no one should mind their online image MORE than a company’s CEO. This demonstrates that there should be a customer service team minding the company’s brand- not the CEO making catastrophic comments for the whole world to see.

To conclude- The Zenefits fiascos of 2015 have been shocking/entertaining and definitely educational. It is rare that one company has had such growth and success, and then had such a fall from grace, in a short amount of time. It’s exciting to see what the future holds next for Zenefits- in the meantime- do what you have to do as a manager to keep your business in check!

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