The Case for Investing in Better Employee Financial Guidance: A Conversation with Helen Calvin, Jellyvision’s CRO

Mark Rader Financial Guidance, Industry Insights

Recently, we asked Helen Calvin, our fearless Chief Revenue Officer, how Benefits and Total Rewards teams might help their employees make better financial decisions—and why the extra effort is worth it. Here are some of the highlights from our chat:

So…why should providing financial guidance to employees be a top priority for business leaders today?

Helen: Two big reasons: for one, companies that want to find and retain the best talent have to meet the needs of a workforce that is more diverse than ever—in terms of gender, race, demographics, age, and needs. That includes improving and maximizing those employees’ financial positions, which could require much more than just offering a great medical plan. Put simply, employers who don’t figure out how to help their employees financially will lose the war for talent.

The second reason is that when employees are in poor financial health, employer health care costs increase. Between the health implications for stressed-out employees to the increased retirement age, employers with a financially strained workforce will see a significant impact to their bottom line—through productivity losses and rising claims.

What’s causing employees the most financial stress, do you think?

Helen: Well, the things at the top of the list are saving for retirement, managing student loan and high-interest credit card debt, and not having an emergency fund. Then, added to that baseline stress is the stress that comes with not knowing which areas to attack first and why—or who to ask for help.

Millennials in particular struggle with this because they’re burdened by many types of debt: medical debt, student loans, credit card debt, and debt incurred in supporting their aging parents—often all at the same time. They need help prioritizing these debts against one another; if they don’t understand the math behind a smart debt-reduction strategy, they’re left to make emotional decisions that might be costing them money. (For example, we know that many Millennials prioritize student loan debt over things like retirement savings or credit card debt even though student loans often have the lowest interest rate.)

Luckily, companies are starting to provide their employees with technology (interactive decision support tools, videos, apps) that doesn’t have a vested interest in what they do with their money—in other words, technology they can trust and actually want to use.

What advice would you give an employer that wants to up their game on the financial guidance front?

Helen: First of all, I’d congratulate them for recognizing that offering helpful financial guidance is a crucial piece of the Total Rewards puzzle. That’s a great start! Then I’d suggest they focus on educating employees on the benefits they already provide—HSAs, for instance. Many employees still aren’t taking advantage of HSAs, even though they’re “triple tax-advantaged,” beating out 401(k)s, which are only “double tax advantaged.” With HSAs, money is tax-free when you put it in, it grows tax-free, and it’s tax-free when you take it out to pay for healthcare costs. That makes it a great vehicle for initial retirement dollars. Plus, HSAs are more liquid than 401(k)s because you can use them for medical costs at any point.

I’d also tell them to challenge their benefits and communications vendors to help as well. Siloed, vendor-specific advice is exacerbating the problem. Helping employees figure out where to put their next best dollar requires a comprehensive view of multiple offerings and each employee’s unique financial situation. Yes, both HSAs and 401(k)s are great financial products, but employees need to understand which to contribute to first, and to what degree, based on how much money they have available and what other financial burdens they’re dealing with.

Get three tips on driving HSA participation and contributions based on behavior science principles.

It’s clear how great financial guidance can benefit employees…but what do employers stand to gain from investing in these resources?

Helen: A lot! Many companies are already saving money because they’ve successfully used benefits communications to drive migration to high deductible plans with health savings accounts. And when employees to contribute to those HSAs, companies save on payroll taxes, too—to the tune of 7.65% (6.2% for Social Security and 1.45% for Medicare). In other words, for every $100 employees contribute to their health savings account, their employer saves $7.65. But many companies don’t realize that, or don’t factor those savings into the big picture.

Other results can be harder to measure, either because they have a longer tail or they’re more qualitative. Regardless, a successful program should result in happier, more satisfied, more productive employees; healthier employees (with lower medical costs); and employees who retire on time. All of those outcomes will improve your company’s bottom line.

To gather this kind of data, employers should measure employee satisfaction in at least four ways: customer satisfaction scores via surveys, employee satisfaction scores, turnover rates and recruiting costs.

What are the challenges our customers talk about when it comes to offering great benefits to their employees in today’s market…and how is Jellyvision responding?

Helen: Every year, it seems employers are forced to do more with less. Health care costs keep rising, but to stay competitive employers need to offer increasingly generous benefits packages (and benefits communication to help employees appreciate those generous benefits packages!). So it’s not surprising that employers constantly ask us how they can continue to cut their benefits costs, while still setting the bar for innovation and for what they offer to their employees.

Usually, the employer has to take something away to cut costs, but that’s not the case with ALEX. We’ve always been a platform that saves employers money, and at the same time, we feel like an added benefit to the employee.

Are there any new features or upcoming upgrades that you’re excited about and would like to give us a sneak peek into?

Helen: Funny you ask…there are. 🙂 As it stands now, employees generally visit ALEX to get guidance, then enroll in their benefits later and somewhere else. Going forward, we’re partnering with benefits administration platforms to offer employers an integrated option that slots directly into employees’ benefits enrollment experience, allowing them to get the data-driven guidance they need, right at the moment they need it.

Also exciting: we’re creating new products that help employees make smarter strategic decisions about using their tax-advantaged accounts, and that incorporate non-benefits-related factors like debt and emergency savings into our financial guidance. At the same time, we’re continuing to find new ways to reach employees outside of open enrollment, when they’re faced with the decisions (often accompanying life changes) that really matter.

Thanks so much for talking with us, Helen!

Helen: My pleasure!