With today’s evolving workplace trends and employee needs, it’s time for employers to build better financial care programs that can significantly contribute to every employee’s long-term financial wellness. Tom Spann, CEO at Brightside weighs in with some thoughts and suggestions:
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Hi Tom, tell us about yourself and more about Brightside.
I’m currently the CEO of Brightside, the first Financial Care solution for employers, focused on driving ROI for leading Fortune 500 employers by boosting retention, lowering healthcare costs, and increasing productivity by improving the financial health of working families. Prior to co-founding Brightside, I was the founding CEO of Accolade, a company that defined the employee health navigation market for working Americans.
I was fortunate enough to be twice handed great ideas for mission-driven companies. Brightside is the brainchild of the late benefits executive Shawn Leavitt, who saw that poor financial health was costing his employer thousands of dollars per employee per year and that there were really no safe solutions for the vast majority of employees living paycheck to paycheck. He felt a navigation company similar to Accolade could make it easier for employees to make good financial decisions. He was right.
Can you comment on the current state of financial health of the modern workforce and what employers need to pay attention to, something they might not do often?
Despite increased attention by employers on employee financial wellness programs and mental health support, one of the core underlying problems – financial illness – is still not being adequately addressed, particularly for frontline employees, and it’s hurting businesses. Employers need to better understand some of the underlying issues they’re trying to solve before they throw money at trying to solve them.
Traditional long-term approaches to employee financial health and education don’t work for those who are most in need. Sure, having a 401(k) strategy and a retirement plan is great, but those don’t help the 70% of Americans who are living paycheck to paycheck, the half of U.S. renters who can’t afford housing, or the 87% losing sleep over their finances.
Families of frontline workers living paycheck to paycheck need access to someone who has real solutions when a financial shock hits – traditional financial education can’t address their needs. They don’t want to work with a CFP or similar expert who they think will make them feel like they’ve made bad financial decisions and are “doing it wrong.” They need a Financial Assistant who can take on more of a social worker role – and can help them find and understand their options for dealing with their needs, which are often urgent and include serious crises such as how to keep their families housed and fed.
To help address employees’ financial stress (and ultimately help a business’s bottom line), it’s critical for employers to first identify the problem we call financial illness. Telltale signs of financial illness include higher healthcare costs, absenteeism, increased workplace safety issues, high turnover rates, high engagement with earned wage access solutions, low retirement solution participation, and frequent 401(k) loans and hardship withdrawals. Being able to adequately identify and acutely address these factors is crucial.
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What can modern SaaS employers especially do to build better employee financial wellness and financial health schemes?
First of all, leverage the data that they have from the touchpoints in the employee journey. Wage garnishments, 401(k) contributions, 401(k) withdrawals and loans, disability and leave data, new hire data, and changes in household status (new dependents, divorces) are all opportunities to get insight into the extent of financial illness in the population and engage employees in ways that can improve their financial health in these moments.
Can you highlight more on a few top SaaS brands from around the world that do this well?
None that I’ve seen! Employers have only had traditional education and coaching solutions and are just beginning to address the needs of the financially ill.
A few employee benefits (fundamentals) that employers should offer modern employees as a default practice.
What they should NOT offer (directly) to their employees are products from companies that make their money off of those products. These products usually are about maximizing profits for the vendor and are often not the best choice for employees. This includes not only products such as paycheck-linked loans and earned wage access solutions, but also student loan solutions and savings accounts. These and many other products are best placed behind an unbiased navigator who can make sure they are used appropriately, based on the unique needs of the employee. The right answer for how to approach and manage any financial product – even a savings account or student loan – is different based on the specific circumstances in a person’s life, especially in situations that involve an outstanding payday loan or credit card balance.
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Tom Spann is CEO and Co-Founder of Brightside, a company offering the first Financial Care platform built for frontline employees. Knowing that seven in 10 individuals live paycheck to paycheck, his leadership is focused on strengthening the financial health of working families and driving ROI for large employers by improving retention, lowering healthcare costs, and increasing productivity. Previously, Tom was the Founding CEO of Accolade, an organization that defined the employee health navigation market for working Americans. Prior to Accolade, Tom worked at Accenture, where he led a team helping to modernize most of the largest Health Plans, Providers, and Pharmaceutical & Medical Products companies in the US and Canada. Tom holds a B.S. in economics from The Wharton School of the University of Pennsylvania.
Brightside combines behavioral science and financial models, technology (including a proprietary rules engine), and human care for a customized approach to financial wellness that provides real solutions to alleviate financial stress. Brightside’s Financial Assistants work 1:1 with clients to identify their individual financial goals, motivators, barriers, and life situation in order to tailor their solutions, all while promoting positive financial behaviors. In supporting over 800,000 frontline workers and their families and serving leading Fortune 500 employers like Amazon, Brightside saves families an average of $1,200 annually and reduces credit card debt by 3x more than employees who do not use the benefit. On the employer side of the equation, companies see reduced turnover, increased productivity, and greater workforce diversity while lowering healthcare costs.