Gusto the SaaS company offering payroll processing and HR services for small businesses, revealed that it crossed the 60,000 customer threshold in January. It has also launched a new product called HR Basics that helps SMBs handle routine HR tasks like managing employee vacation time, compiling employee directories and so on.
According to an article in Tech Crunch, the thinking behind the free product is to generate a bigger pipeline of leads for upsell to Gusto’s paid payroll and HR packages, which range from $6 to $12 per employee, per month depending on the package.
More from the Tech Crunch article, which quotes Gusto CEO Joshua Reeves.
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.”
The LSA’s Tech Adoption Index measures adoption of cloud-based payroll and HR software as part of its twice annual survey of SMBS about their use of cloud software to run their businesses.
Our last wave of survey data shows that 7% of SMBs report having adopted cloud software for payroll or HR services, which includes Gusto and its many competitors, including Zenefits, Paycor, Quickbooks, Bamboo HR, Justworks (which recently raised $40 million) and others.
The TAI data shows that simplicity and the ability to do more in less time were key motivators in the adoption of cloud tools for payroll and HR, trumping cost savings. in fact this is true for most of the business functions for which TAI measures the shift to the use of cloud tools. Small businesses want to spend less time on the paperwork and drudgery of running a business and more time on delivering their actual product or service. Cloud tools are seen as a means to this end.