Ep. 64

Financial Wellness in the Workplace w/ Spencer Barclay

In episode 64, we talk with Spencer Barclay about the importance of financial wellness.

Spencer Barclay

Founder & CEO
Savology

Benefits shouldn’t just be about checking off boxes. Instead, employers should offer the benefits that their people actually want—and need. And according to Spencer Barclay, Founder and CEO at Savology, one of the most impactful things a company can do is offer a financial wellness benefit. When people are stressed about money (and in the current economic climate, who isn’t?) they carry that stress to work. Offering a financial benefit can alleviate that stress, increase employee productivity, and encourage people to remain loyal to their workplace.

During our discussion, we talked about:

  • The shifting employer-employee relationship
  • How the current economy has made a financial wellness benefit relevant
  • Money-related stress—and its damaging side effects
  • Why financial wellness benefits convince employees to stay with their company longer
  • Three things that don’t count as an effective financial wellness benefit
  • Four things that an effective financial wellness benefit includes
  • The strategy employers should use to choose which benefits to offer

Visit Spencer’s site to learn more about financial wellness.

Episode 64 Transcript

You’re listening to HR Mavericks, a weekly podcast, featuring leading small business HR professionals who share their experiences and insights to help you know how to turn your HR processes and employee experience into a strategic business advantage. Let’s get into the show. 

[00:00:00] Garrett Jestice: Welcome to the next episode of the HR Mavericks podcast. I’m Garrett Jestice, and today I’m joined by Spencer Barclay. Who’s the founder and CEO at Savology. Spencer, how you doing today?

[00:00:12] Spencer Barclay: Yeah. I’m I’m really good. Thanks for asking Garrett and thanks for having me on.

[00:00:15] Garrett Jestice: It’s great to have you on the show. I know we got kind of connected, you know, through a few of our, you know, connections between us, people we know, but first time you and I have met, and I’m excited to jump on this call and really talk with you today about our topic. I think it’s gonna be great. But before we get ahead of ourselves, jump into that, tell our listeners just a little bit more about you and your background, and also what your company Savology.does.

[00:00:40] Spencer Barclay: Yeah, I I’d love to share that. Thanks for asking. So I’m Spencer Barclay. Founder and CEO of Savology. My background is in a combination of entrepreneurship and financial services. I’ve been helping people in, in multiple ways with their money for the last 10 years. Including things like credit repair and estate planning and retirement planning.

We, we built a small business 401k provider called Benefit Guard from 2014 to 2017 when we sold it to Health Equity, which is a publicly traded HSA company. So then I started doing health savings accounts and, you know, as I experienced each of those areas across personal finance, I just saw how much people needed help with their money.

[00:01:16] Spencer Barclay: And, and so when I left Health Equity in 2019 to go start a business, that that’s what Savology is right, is, is helping people with their money. So many people struggle with their money. We wanted to improve financial outcomes and people’s relationship with their money. So the, even the name Savology comes down to, you know, the science and study of, of saving.

And our belief is if we can help people save more money, not only will they be better off in the long run, but they’ll feel better in the short run.

[00:01:42] Garrett Jestice: Yeah, that’s awesome. And I can definitely see the need for that. So I know there’s probably some of our listeners who are thinking that’s awesome. So good. What does it have to do with HR and small businesses? You know, why, why, why do we have you on the podcast today?

[00:01:56] Spencer Barclay: Yeah, so that that’s where our company is a little bit unique, right? There are a lot of companies approaching personal finances through things like personal budgeting tools or investment management. And the reason why ours is unique is because we come through the lens of financial wellness benefits. So we built a system specifically for employers to help their employees improve their personal finances.

Right. We, we found this unique synergy between these two groups where as an employer helps their employees improve their money, the employees become better off financially and it actually benefits the employer. And so having this symbiotic relationship makes it a unique market for us to approach. And so when you think about what our company is and what our company does, it’s financial wellness benefits for employers.

[00:02:43] Garrett Jestice: I love it. And I, and I think that there’s so many ways to solve different problems. I love that you’re coming at this problem from a different perspective and working with employers to really provide this as a benefit for their employees, as a way to help each employee strengthen their financial wellness.

Like you say, and it’s a perfect lead into our topic today, because as an expert in this space, having been in this space for, you know, much of your career, we wanna talk about that topic of financial wellness in the workplace. And so specifically, just to start us off on this conversation, what are some trends that you are seeing when it comes to company benefits right now?

You kind of mentioned this new benefit that your company provides. Right? But as, as a, as a broader whole, especially among small businesses, what are some of those trends that you’re seeing?

[00:03:29] Spencer Barclay: Yeah. there’s a lot happening in the HR space right now. Right? I think the last three years have really turned human resource management and personnel on, on its head. Everyone’s approaching it in a different way. They’re thinking about it in new ways. I think HR is being tasked with more and employees have higher expectations and that means they have to go back to the drawing board to figure out what to do in a newer different way.

And, and that’s where these trends come up. So in, in 2021, we actually reached out to a lot of HR leaders. We interviewed a couple dozen to find out what they were doing differently because of not just the pandemic, but this evolution of expectations. And I was surprised to see so many of these having to do with employee benefits.

So I’ll, I’ll list a couple of, of the findings that we had. So number one, like professional development and coaching became a more formalized program. Over the last few years, HR leaders found they could have an, an influence on the leadership abilities and the development of their employees. So they started having new focuses on these as a program, not just sending someone to school or sending someone off, but doing that internally.

Number two more flexible options to work from home, right? And this is a benefit, like don’t get me wrong. Telecommuting, working from home, for some people is a huge benefit and it saves a company money. It’s not a benefit for everyone, but for some people it is. So we consider that as a trend. Number three, a rise in mental health and wellness, right?

[00:04:51] Spencer Barclay: So mental health being the state that people feel about themselves and about their surroundings and how they interact with their environment. We see a lot more mental health benefits than we’ve ever seen. And then maybe the last one I’ll point out will be that financial wellness and planning, right?

Financial wellness, isn’t new to the employer landscape. In fact, I think the term financial wellness comes from a company that’s been around for a little bit more than 20 years, but new financial wellness providers are coming to the scene because of this higher need. And adoption is increasing. To put that in perspective, 22% of employers right now say they have a financial wellness benefit yet 89% say they want it, or it’s a priority for them to add.

So that shows that shift in the landscape towards that.

[00:05:36] Garrett Jestice: Yeah, that’s super interesting. And that’s, and you know, that’s fascinating research that you’ve done there. I, I know there are some of those benefits that we hear about more often than others, especially recently, you know, in the last few years, since the pandemic, the craziness, I think that everyone’s hearing about the work remote, work from home.

If you’re at a company that allows you to do that, right. Everyone’s thinking about it, everyone’s talking about it. Some of those other ones might be ones that have been around longer, or that are still top of mind, but maybe aren’t heard as of, you know, as much as others more, more recently, at least. So I guess to that point, which of those benefits that you kind of talked about really, is most important or really provides a meaningful difference and impact. Like, which, which of them would you say is most impactful and why?

[00:06:22] Spencer Barclay: Yeah, I love that you brought up meaningful difference because all benefits are intended to provide a benefit to the employer and the employee. But I don’t think all of them are super meaningful. I think about an article that was put out by benefits pro about a year ago that measured the return on investment of different benefits.

And some, all of them had some return on investment in, in their study, but it looked at things like healthcare that produced a 200%, return, to wellness programs like health wellness programs that produced a 600% return, mental health that produced somewhere between 160 and 220%. Tuition programs, it was 130%.

And then, then you get to financial wellness benefits. And I, I love this, not just because I’m in the space, but because it showed a change in the market from 2010 to 2020, that number was one to three X ROI. Now it’s 300 to 1500%. People need that help so much more that we believe financial wellness is making a very big difference in the personal lives of, of those employees.

[00:07:29] Spencer Barclay: And that’s one of the reasons why employers have started to care about it more is they see the difference that it makes.

[00:07:34] Garrett Jestice: Yeah. That’s so interesting. Why, why that changed do you think? Is it just a nature of, you know, the state of the world that we’re in right now with economy, pandemic, everything else? Is it something else driving that?

[00:07:45] Spencer Barclay: Oh, there, there are so many things that go into that. Including cultural and economic changes. If I can think of a few off the top of my head, number one would be that we have an evolution in the relationship between an employee and an employer, right? Now, employees are often going to their employer with a relationship that isn’t just, I work for you and I do what you tell me to.

It’s, we work together in this, right? When you care about me, I care about you. And, and that opens up the realm of possibilities to new things like personal finance, because personal finance is personal. And there was a time where we didn’t feel like as an employee, that our finances mattered to our employer.

And there was a time where employers would’ve said your personal finances don’t matter. And, you know, keep ’em outta my office. And, and now that’s changing where these employers care more about their employees and are showing that they care more about their employees and that opens this new realm of possibilities for benefits.

So I, I think that is one side. The second one you pointed out was, was really helpful. It’s the economy, right? Like right now we’re seeing unprecedented levels of inflation for the last 30 years where we didn’t see inflation for quite a while. We see stock market bubbles, we see booms in housing across the country. Changes like this, make us think about our money and it makes us want to find solutions to money when our, our finances are pushed to the limit.

And so now we’re accepting of new help because we finally need it.

[00:09:14] Garrett Jestice: Yeah, that makes total sense to me. I can see both of those, you know, impacting that change that you talked about. And so you, you talk about that change in the ROI, especially from financial wellness benefits. So, you know, if we, if you were speaking to a small business owner, right, and trying to convince them of why they should offer a financial wellness benefit to their employees, what would you say? Why, why should that be something that especially small businesses are considering or should consider?

[00:09:43] Spencer Barclay: Yeah, this is a question that I get relatively frequently because I don’t think it’s easy to see the natural connection until you really think deeply about the personal finances. And so, you know, we talk about this with employers all the time.

But the number one, the leading cause of productivity loss in America, among employers is financial stress. And the big study that was done at $300 billion worth of productivity every year is affected because employees are distracted by their personal finances. So, 95% of people report that within a given year, they feel financial stress 56 to 58% of those say that they take that financial stress with them to work and it affects their focus.

Some days it affects whether or not they show up to work, right. They have matters to deal with, or they have to take phone calls while they’re at work. So even just looking at the stress of that… number one, as you decrease stress, you improve productivity and focus. Number two. Higher loyalty, engagement, and retention, right?

When you see that an employer really cares about you, you are bought into that company. You’re loyal to the company. You’re more engaged when you’re at work and you want to stay there longer. There was a really cool article that I read about a year ago that talked about when an employee first feels financial stress onset in their life, the first thing they think about is I need more money, right? 

Like more money will solve my problem. And where do you go get more money? It’s usually not by just asking your employer. Like these employees start looking for new jobs. So if you can help your employee feel at rest with their financial situation, they feel at rest with their employment and they stay there longer.

And they’re happier while they’re at work. Number three, we tell them stronger mental and physical health. Stress, I mean, most insurance providers will talk to about the level of stress of your employees directly correlates to their outcomes in the physical health area. They go to the doctor more when they’re stressed, right?

And if we can decrease that level of stress, we decrease the cost of health insurance premiums, and we, we decrease the toll that it takes on your employee.

[00:11:54] Garrett Jestice: Yeah, so interesting.

[00:11:55] Spencer Barclay: One. If I, if I can bring up one more, it would be in recruiting. So we saw a study that said that 72% of job seekers would consider a company that offered financial wellness over a company without.

And so, you know, we often think of health insurance as the staple benefit, and it is. But now so many and 85% to 90% of companies offer health insurance. You move on down the list of what else does this employer offer me? And they’re getting to the point where financial wellness is numbered around those things that are important.

And if so, if you have it, you’re more likely to attract and maintain that top talent.

[00:12:30] Garrett Jestice: Yeah, this is, this is so great. It, it makes me think of previous episodes. I know we’ve mentioned this before, but we’ve talked on here about Maslow’s hierarchy of needs. You know, you think of the pyramid that you learned maybe in school, right? Where at the very top is, you know, self actualization and at the very bottom is, is really like the physical needs.

Right. And you apply that to a workplace. And what are the needs that are at the bottom of that pyramid? It’s it might, is it a, is it a work environment that’s safe physically, mentally, psychologically, am I paid enough to take care of my basic needs? Right. Do I make enough money to alleviate some of that financial burden or stress that many feel, right.

To put food on the table to buy my kids new shoes if needed or whatever it is. And so when you think about it from that context, I think it makes total sense exactly what you just described. As employers we have to make sure. especially if we have a lot of, you know, hourly workers or, you know, minimum wage workers that we provide enough support for those people that they can take care of those lower level needs on the Maslow’s hierarchy so that they can then continue moving up that hierarchy because you can’t jump to the top of that pyramid without first, you know, solving the issues at the bottom.

[00:13:49] Spencer Barclay: Yeah, and you have some level of money that is almost necessary to live. Right. But then you have diminishing returns on that incremental money thereafter. So for example, one study found that about $70,000, you stop experiment, start, you stop receiving extra benefit from the money you have in terms of happiness.

And what we’re finding is that employees often find their financial stress related back to the amount of money that they have because of their, their financial habits. And so if, if we can change their habits and their relationship with money, they don’t need a lot more money. Right. We actually talked to an employer just earlier this year.

They, they reached out to us because they had done two rounds of salary raises within the year. And they were feeling the pressure to do a third one. And they said, what else can we do that isn’t just giving people more money? And a round of raises for them would’ve cost that company a little over 6 million dollars.

And a financial wellness benefit’s like a hundred thousand dollars, right. For a company that size, right. It’s much cheaper for the small businesses that we’re talking about today, but pennies on the dollar to have the same net impact or better than a pay raise.

[00:14:57] Garrett Jestice: Yeah, that makes total sense to me. And so I guess that brings me to my next question. We’ve talked a lot about, you know, the importance of a financial wellness benefit, but what should actually be included in a financial wellness benefit? If, if an employer is thinking about offering that, what should be a part of that benefit that they should consider?

[00:15:17] Spencer Barclay: Yeah, the, those financial wellness benefits come in all shapes and sizes. Right. And we talked about how they were less effective 15 years ago. And we talked about some of the cultural and economic reasons why they were less effective, but they also just weren’t addressing some of the core needs. And so we spent a lot of time figuring out what makes a financial wellness program effective.

And I maybe it helps just to start with like what shouldn’t be the financial wellness benefit, right? Like we talk to some employers that say we have an EAP, right? We have an employee assistance program. And I think if they call an 800 number, they can talk to a financial planner. That is not a financial wellness benefit.

It doesn’t move the needle less than 1% of your employees will talk to that financial planner.

Number two companies will also say we have a 401k advisor, right? We have a financial advisor on our small business 401k, and I think he comes in sometimes and talks to my employees, or my employees could call him up if they ever have a question.

Guess what? They’re not doing it. And if they do, it’s just about investments or about that financial advisor, trying to get their, their personal business and their investment management for the future. So very few 401k advisors are actually making a big difference in financial wellness.

And I know because we ran a 401k company and primarily partnered with 401k advisors to do that. That doesn’t mean all of ’em. You could find an exception, but you’d have to look at what they’re really doing. Number three is financial literacy. Teaching people alone is not enough. It, it helps right. There is a very small correlation between financial literacy and outcomes.

But if you start looking at all those things that aren’t, then it tells us what things could be. So we, we think that a, a good financial wellness benefit should have four things. Number one, financial planning and goal setting should be at the heart of it. Right? 2% of Americans currently do financial planning yet it, it it’s a two and a half times more likely success rate if you’re doing financial planning than if you’re not in saving enough money. 

So that’s number one. Number two, then you incorporate financial literacy. If you are setting goals and telling people where they get to, then you add literacy, then you add financial coaching, which is number three, someone to talk to about your day to day money. 

Not just where you manage your investments, but, are you spending, are you spending too much money? How do you fix that? Are you properly covered in mitigating risk? Are there habits that you should change? That’s financial coaching. And number four to end my, my big list here, is personal financial management, like software, budgets, calculators, the tools that you need to round out the rest of your financial life.

When you combine these four things, we see meaningful improvements in people’s personal financial lives and big reductions in financial stress.

[00:17:56] Garrett Jestice: It makes total sense. And I love all of those pieces fitting together, I guess, just to follow up on where you ended there, do you have any examples that you could share with us of the impact of, you know, a true financial wellness benefit, like you just described and the impacts of what it can do either for the employee or from the employer in your experience?

[00:18:17] Spencer Barclay: Yeah. So there are, there’s data that will show the impact of this, but there are also personal experiences and I love the personal experiences, right? Like I’m thinking of, a guy that scheduled the call with one of our financial coaches about three months ago. He was making nearly $200,000 a year and he was drowning in debt and just thought that he was never gonna get ahead of his personal finances.

And the problem was that he had never talked to someone about his money and this person who is making great money was also in a lot of student debt, but they thought that their solution was, should I pick up a second job? Like you’re making high, you’re making good six figure money. You don’t need a second job.

Let’s help you manage your personal finances. So a repeat call a month and a half later, this person had revisited a complete budget because they set a single financial goal and then they felt good about their life. Great about their employer and had a solid relationship with their money. So that that’s one example of someone.

And we have those that range from people with $40,000 incomes up to a million dollars in incomes. We can help people with their money. On the, on the employer side, we see the same thing. So I, I don’t need to go into it because you, you heard a lot of the statistics on there, but employers report back those same stories that…. 

Like I just talked to one of my employees and they mentioned that they had a call with your team or they had finished building their financial plan. They’re feeling better already. Like that’s one of the reasons why I’m still doing what I’m doing is because I hear and see the results and it, it makes my heart happy.

[00:19:46] Garrett Jestice: Yeah, it’s gotta be so rewarding knowing that you can make an impact like that. That’s so, you know, widespread across, you know, so many lives. I, I know that this, you know, financial wellness is something that so many Americans struggle with. I know all of us have heard the statistics of, you know, how many people, how few people have actually money and savings and how many people live paycheck to paycheck, or just have, you know, they’ve never been taught.

They’ve never had anyone to talk to about this stuff. And so just those small changes can have such an impact on their lives, their family’s lives. You know, and their companies that, where they’re working, right. Their productivity, like you mentioned before. So Spencer, thank you so much for joining and sharing some of your thoughts with us today on this topic.

It’s been super impactful. I think you shared a lot of stuff that we can all think about and apply further. As we kind of wrap up here, one of the last questions I like to ask a lot of our guests on this show that may or may not necessarily be related to our topic today, but it’s just a chance for you to share one of your unique points of view based on your experience is this: what’s a commonly held belief regarding HR among small businesses that you passionately disagree with.

[00:20:53] Spencer Barclay: I’m passionate about a lot of things, especially related to personal finance. But I’m, I’m thinking of two specific things. One like internal belief from, from HR and one external belief. So if I can address both of those. 

You know, on the, on the external side, the perception of HR, I’ve heard a lot of small businesses and professionals say that HR in these smaller companies, can’t have the impact that it does in a larger company. And, and I absolutely disagree with that. I think that might be the case in some companies, if they’re under utilizing HR and I don’t even mean they have to have an HR manager or an HR person, right. Human resources is still an element of your company before you hire that first person.

And I think with proper strategy and planning and maybe even some goal setting, that human resource element can become a big asset to your business, to shape culture, to create engaging environments and to recruit top talent that will fundamentally change the trajectory of your business. And it starts within HR.

So HR in small businesses can have a huge impact and it doesn’t have to be less than at a large company.

[00:21:56] Garrett Jestice: I love it.

[00:21:57] Spencer Barclay: Number two is a belief that I think a lot of HR leaders have, and that is that dental and vision insurance and, and things like pet insurances, and some of these other things are, are core to a benefits package before they should consider other benefits.

And I, I just like to say that we’re evolving. Our needs are evolving. They’re changing. I personally think that most dental and and vision plans don’t provide a net benefit for employees, and they should, these HR leaders should be looking outside of these before they feel like they need to complete this in, in extra spending.

So health insurance is probably critical. Retirement plans are becoming relatively critical, but after that find something that matters to your employees. That might not be financial wellness, but depending on the company that you’re at, that could be a travel perk. That could be mental health. That could be financial wellness, but look at something that shapes culture more than checks a box that you have dental and vision insurance.

And, and I think your employees will be happier, will stick around longer and will rave about you to their friends and family. Therefore bringing more referrals to the company.

[00:23:00] Garrett Jestice: Yeah, great points. There’s so many options available today. It’s best to not just do the standard off the shelf. Create something that’s unique for your employees. And I completely agree at the first point too. I think we talk about it so much on this show that, you know, often in small businesses, HR is just an administrative role and really we want it to be a strategic role and that’s how you really get the most value out of, you know, that role.

And that’s how you elevate the role and that’s how you feel the impact. So great point, Spencer, thank you again for taking the time to be with us today and share some of your insights. If there are listeners who want to follow up, get in contact with you because they have follow up questions on either this topic or they wanna learn more about your company Savology, what’s the best way for them to do that?

[00:23:45] Spencer Barclay: Yeah, for people who want to connect a little more personally, I highly recommend LinkedIn find me on. Spencer Barkley, I’m pretty active on there. I will engage with you. I’ll connect with you. I’ll chat with you if you’d like. And for those who wanna learn more about Savology, you know, either connect with me directly or go to savology.com, you can learn about our employer, financial wellness product.

You can request a demo if that’s what you’d like to do, but I, I want these leaders within small businesses and within HR to start exploring these options. And if it takes a conversation with me to help you understand how financial wellness benefit can change your business, I’m happy to do that.

[00:24:18] Garrett Jestice: Awesome. Well, Spencer, thank you again. Hope you have a great rest of the day.

[00:24:22] Spencer Barclay: You too. Thanks care.

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