“Completely unproven”: Employment Hero co-founder blasts US competitor Rippling as it opens Sydney office

Employment Hero co-founder Ben Thompson has returned fire at workplace management competitor Rippling, calling its payroll platform “completely unproven” in the local market, after Employment Hero was the target of bruising commentary from Rippling founder Parker Conrad.

American company Rippling bills itself as a one-size-fits-all solution for businesses with complex needs across HR, IT, employee benefits, and payroll.

It formally opened its Sydney office on Tuesday, serving as a home base for its multi-year plan to conquer the Asia-Pacific market.

Its Sydney team comprises 30 people, with the business planning to recruit additional sales, marketing and product staff in the months ahead.

In a show of intent, Rippling has also recruited Matt Loop, former VP of Slack’s Asian operations, as its regional chief.

Amid that swirl of activity, Conrad put homegrown unicorn Employment Hero firmly in the company’s crosshairs in comments to Forbes Australia.

Employment Hero has “very much underinvested on the product and R&D side” compared to Rippling, claimed Conrad, who boasted that his company’s research and development spending will eclipse Employment Hero’s revenue.

Conrad also claimed Employment Hero “never built” a payroll solution, and that the functionality of Keypay, which Employment Hero acquired in 2022, exists “separate” to the platform as a whole.

Australia a “graveyard” for foreign competitors: Thompson

Speaking to SmartCompany, Employment Hero CEO Ben Thompson hit back, arguing Rippling will face significant challenges in the local market, and obstacles that Employment Hero can evade as it has a long-running understanding of the Australian workplace policy.

“Unlike Rippling, our R&D spend will not be spread across 50 US states and many other countries,” Thompson said on Tuesday.

“Australia’s compliance complexities require continued investment – which grows every year.

“In addition, SMEs often need on the ground support, something we’re able to provide with our ten plus years of managing payroll and interpreting awards.

“This is why there is a graveyard of payroll solutions here in Australia.”

Shifting industrial relations standards, exemplified by the latest Closing Loopholes package passing in Parliament this week, mean local players are better placed to serve local businesses, he added.

“We’ve seen the Rippling playbook time and time again,” Thompson said.

“US companies enter Australia with a big splash and try to force people to adopt ill-fitting systems.

“Then, once they’re done attempting to build market share, they often scale back, limiting their offer, and off-shore everything.”

Employment Hero welcomes challengers in the HR, payroll, and benefits management arena, Thompson continued, but the co-founder questioned Rippling’s approach.

“Competition is good,” he said.

“US HR and payroll systems trying to cope with the complexities of Australian employment law are not.

“It’s not as simple as dropping an American HR and payroll system into Australia and expecting it to work.”

He also challenged Conrad’s take on Keypay, saying it was “built in lockstep” with Employment Hero, and that he personally served as a foundational investor in Keypay through its early history.

Focus on SME market

In a statement, Rippling touted the benefits of automation in its product suite — a clear swing at competing providers like Employment Hero, which introduced AI recruitment tools through the Swag ‘super app’ last year.

While enterprise-scale businesses are a clear target for Rippling, features like payroll compliance, employee benefits management, and third-party app management are usable by smaller businesses and scale-ups.

Rippling also offers its own talent management and recruitment systems, providing more competition to the Employment Hero product suite.

Despite those offerings from the US-based firm, which commands a valuation of US$11.25 billion ($17.22 billion), Thompson argued there are better options for SMEs in the local market.

Employment Hero now serves 20% of private businesses in Australia and handles $100 billion in wages annually, he said.

“Our expertise is not just theoretical; it is practical and proven… We’re constantly working to make employment easier and more valuable for Australian SMEs,” Thompson added.

Employment Hero has now launched a tool it calls SmartMatch, an AI-powered function it claims can connect job seekers with employers, more cheaply and efficiently than traditional job boards can.