Diffuse just hosted yet another successful ConZoom session – a virtual event that is part networking (you’ll meet at least a half dozen high caliber startup players) and part purposeful (you’ll ConZoom new ideas). This week, we sat with Joe Holberg, Founder and CEO of Holberg Financial, who talked about how the COVID-19 crisis is poised to cause a “tectonic shift” in employees’ benefits programs.
As remote work shifts from a mere option into a necessity for survival, Joe poses this question: How can employers keep their workers happy while working from home?
Holberg Financial is a financial health and wellness platform that companies offer as a benefit to their employees. Its goal: to provide “free and unbiased financial education and guidance for the masses” thus democratizing access to information previously limited to high net worth individuals who could afford financial planning.
The Predicament of Working Remote
“From our perspective, we’re noticing two things: the first one is this idea around benefits either being able to be delivered remotely and two; thinking about benefits from an ‘equity and accessibility’ perspective. Mainly, companies are starting to evaluate whether benefits require an in-person presence in the office to experience them,” Joe said.
Given the current situation, many employees are forced to work away from the office and at home, causing them to miss out on much of the benefits that they have access to normally.
These benefits range from in-office perks such as free meals, coffee and beverages, all the way up to travel assistance, wellness programs, recreational activities, and other personalized benefits such as certain allowances. All of these are withheld from some because of the situation.
“And so the canonical, in-office perk might be Lacroix, stocked fridge or a food bar with cereal, snacks, or meals. [But] now that we have moved into this remote environment, not all of those benefits and perks are necessarily even accessible in the slightest by employees not being in the workplace.”
Will Companies Start to Reevaluate Their Benefits?
With that in mind, Diffuse Founder and CEO Kenny Estes asked, “Are we going to see any changes in the near term?”
Joe said we may very well expect that. “I think you’re going to see a much more critical benefits decision making process, benefits and perks more generally among HR, CFOs, and executives as we come out of Coronavirus,” Joe explains. Also, they may be applying more rigorous frameworks for benefits more generally now and into the future, Joe said.
In a discussion round, Kenny asked the other members if they think that enterprises generally are still too anxious to think about these issues: “Are people still in that panic mode of like ‘okay, we need to stay alive, and then we’ll worry about benefits later?’”
Rob Allison, Leader of Shipyard Technology Ventures, agreed with Kenny on the matter, saying he thinks that “things are being a little forgotten right now”.
“I think people are still scrambling. I think in a few months that’s gonna change, but I think right now it’s ‘how do we keep the people that we want to keep, and not lose them over the next few months, and work out ways of keeping them,’” Rob said.
Brian Zboril, Head of CME Ventures, also shared his thoughts on the matter, saying companies, especially on the startup side, are definitely on “panic mode” right now, mostly focusing their attention towards runway and possibly overlooking employee benefits.
“Certainly, runway is absolutely king. That’s all anyone should care about right now in terms of being startups. But I think in terms of benefits. The ‘it’s less of,’ as he had mentioned, ‘how many flavours of Lacroix do you have?’, and more on really giving your employees what they need to feel like they’re empowered to work from home.” Brian shared.
Brian also said that employees generally need new tools right now because of the work remote situation. He said it might be benefits such as “a new chair or a new laptop or a new monitor” that companies can work on right now, which are “more short term operational and functional things.”
However, in terms of long term benefits, “we have not heard that much at all,” Brian added.
How Many Startups Are Rising Up to The Challenge?
Rob Topping, Founder of Topping Capital, asked Joe about how many and which companies are currently changing up their employee benefits programs to address the problem.
“If the thought leaders are 10%, the middle is 80, and then you’ve got the laggards at 10%, where are your prospective clients in the spectrum of corporations starting to embrace the new thought process of moving away from ‘Old World’ benefits to more forward-thinking benefits, like attacking the student loan problem for example,” Rob asked.
Joe said a significant proportion of companies that they are meeting have been showing an interest in shifting to more progressive benefits, like Holberg Financial’s wellness platform, as a vehicle for engaging and retaining employees.
“I would say probably anywhere from like 20 to 30% of the prospective sales meetings we’re doing, people are coming in with a desire to add the first financial wellness benefit. And the remainder we’re still [using] an education-based sale to teach people what financial wellness is and why it’s important,” Joe said.
With regards to Holberg Financial, Joe said “we specifically are in the small to mid-size range as context. And so, our bread and butter in terms of company size is anywhere from about 100 to 5,000 employees. We’re not actually really doing an enterprise-base sale or like a fortune 500-base sale.”
Joe also shared that surprisingly, Holberg Financial is not facing much competition in the industry as the early entrant and leader in a small, but rapidly growing field as companies start to realize that financial stress is the number one cause of concern among employees and it was so even before the coronavirus outbreak – that shows you how deep and widespread this issue is for employers and employees alike.
“What we are not running into, still, is a competition based sale in the financial wellness space. And I think that’s super interesting. We very rarely are going toe to toe with a competitor, nor are we trying to replace a current financial offering such as a traditional retirement plan. […] And so, that’s just additional context to think about the maturity of the size market that we generally are going after,” Joe said.
During this time, companies are forced to take on a wide spectrum of new challenges. This includes delivering on employee benefits and making sure that their employees still feel cared for while working from home.
This new challenge poses an interesting predicament for startups especially, most of which are struggling to keep their heads above water amid this economic crisis. If you are keen to explore how you can not just survive, but thrive in this environment, whether as an investor or a startup, ping us. We’d love to have a chat.