Use Case Podcast – Storytelling about PeopleKeep with Victoria Glickman Hodgkins

Announcer: 00:02 Welcome to RecruitingDaily’s Use Case Podcast, a show dedicated to the storytelling that happens, or should happen when practitioners purchase technology. Each episode is designed to inspire new ways and ideas to make your business better, as we speak with the brightest minds in recruitment and HR tech, that’s what we do. Here’s your host, William Tincup.

William Tincup: 00:24 Ladies and gentlemen this is William Tincup, and you’re listening to the Use Case Podcast. Today we have Victoria on from PeopleKeep, and we’ll be learning about the business use case for why customers and prospects pick PeopleKeep. So we’ll just jump right into it, Victoria, would you do us a favor and introduce both yourself and PeopleKeep?

Victoria Hodgki…: 00:44 Sure, my name is Victoria Glickman Hodgkins, and I’m the CEO of PeopleKeep. And at People Keep we’re a software company that helps small to mid-size employers design, launch, and manage benefits. So for us, small to midsize means roughly any employer with 300 or fewer employees. And in terms of benefits, we focus really in two areas, one are health benefits called health reimbursement arrangements, or HRAs.

01:17 And the other category is what we call work perks, some other vendors might call it fringe benefits, stipends, lifestyle spending accounts, and they’re the really two types of work perks that we’re seeing employers be primarily interested in. One is a home office or remote work, so that’s reimbursing employees for expenses like cell phone, internet access, home office equipment. And in certain states like California, employers are actually required to reimburse the cell phone and internet if you use that for work. And then the other type of work perk is really around wellness, employers are looking for new ways to care for their employees, and so they set up a wellness work perk or stipend that can cover mental health, clinical services, yoga classes, gym memberships, mobile apps for weight loss, meditation, anxiety, and the like.

William Tincup: 02:17 So we are going to be able to unpack a lot of fun stuff here. So design and launch, did we start with select? Are we helping actually pick the array of things that would be optimal for their employees?

Victoria Hodgki…: 02:35 Yeah, well most of our prospects, they come in with a problem that they’re looking to solve, they’re not quite sure what the solution is. Some of our prospects have done a lot of market research, and they’re really in a shop mode, and they have specific criteria that they’re looking for the software to meet. But most folks are not necessarily there yet, they have a problem, and they’re often starting with health benefits.

03:03 So they know they want to offer health benefit, or they’re currently doing a group health plan and finding that too complicated or too expensive. And so those prospects primarily are looking for a health reimbursement arrangement, but they do need help, to your point, in choosing which one, because they come in a couple different flavors. And then a lot of our prospects for work perks, they know they want to add to their benefits package, they’re looking for ways to personalize benefits to different employees’ needs. So they’ll often come in specifically looking for, how do I offer a wellness stipend to my employees? Or how do I do remote work stipend for employees? But sometimes we can help them think through which category of work perk might best meet their needs.

William Tincup: 03:55 Right. So you mentioned at the beginning it is small to medium, definition in terms of a employee head count, what are we dealing with?

Victoria Hodgki…: 04:06 Yeah, so for us, the small business administration really defines that as 500 and fewer employees, [inaudible 00:04:13] is roughly around 300, that isn’t a firm set number. Of course under the Affordable Care Act, employers with 50 or more full-time equivalents have to provide a group plan, a health benefit.

William Tincup: 04:31 And one of the things I wanted to ask you about this particular group, have they had benefits already, and they’re just trying to figure out because of retention, or attraction, or just cost, whatever reasons that are driving it? Are they trying to find a better way to go about this?

Victoria Hodgki…: 04:50 Yeah, so I’ll try not to get too wonky here.

William Tincup: 04:53 No, we’re going to get wonky. Let’s get wonky.

Victoria Hodgki…: 04:56 There’re a couple different types of health reimbursement arrangements or HRAs, not to be confused with HSAs. So one is called a qualified small employer HRA, or QSEHRA. And as the name suggests, that’s actually just for employers with fewer than 50 employees who do not have to under the ACA provide a health benefit, but they want to. Often for hiring, but also for retention, and then we work with employers of all stripes and kinds, they want to do the right thing for their employees. So the vast majority of those employers the qualified small employer HRA is an on-ramp to benefits, this is the first time they’re offering a benefit. The other type of HRA I’ll focus on, and there are a lot of acronyms here, is something called an individual contributor HRA, or ICHRA, it’s newer, and this is for all sizes of employers from very small to very large. And this HRA is more of a mix, it is often we’re seeing employers who find traditional group health plans too complicated, particularly if they’re now a virtual company with remote employees in lots of different states.

06:20 So finding a plan that meets their needs is difficult or too costly, so it’s not unheard of for us to talk to employers who are suddenly looking at literally 80% year over year cost increase in their group plan, and saying, “Boy, I have no budgetary control, this is too costly for me.” So with the ICHRA we see some employers offering a benefit for the first time, some employers choosing to switch from a group plan. And then also because [inaudible 00:06:54] you can carve out different classes of employees, like employees who live in a different state, sometimes that HRA will just compliment a group plan. So you might have a headquartered office in California, a bunch of employees in Florida, and you can set up an ICHRA for them in Florida.

William Tincup: 07:15 And so just on the health benefits side, just so the audience understand, what’s the contribution look like now these days? So as a business, now, first time, they’re offering up benefit, so there’s probably education you have to do with them as clients, like, “Okay, there’s an array, there’s different tiers, and different plans, different ways to go about this.” But also I think I’ve found it shocking in the past that they don’t understand the different contribution levels, and the different ways that they can go about that. And I won’t date myself, but what does it look like today in today’s market, in terms of what the company actually puts in?

Victoria Hodgki…: 08:01 Yes, and actually I’ll just plug that we do an annual report every year on both the QSEHRA and ICHRA, showing average allowance amounts. So conceptually an HRA is the employer arranges to provide an allowance which is tax free, both to the employer and the employee, so all payroll tax taxes, et cetera, gone. So tax-free money, pretty much everybody likes it. But another reason employers like HRAs, is that they can set a budget, so they have a lot greater budgetary certainty and control. So you can vary your allowance based on employee age and employee family status, single married, married with dependents. And under the QSEHRA there’s a cap, in terms of how much your allowance can be, but under an ICHRA there’s really no cap. So we’ll have employers set an allowance of $800 for an individual, and $1,200 for a family, and then the employee goes and uses that allowance for eligible medical expenses, and it’s the IRS who gets to tell us what’s eligible and what’s not. But the most common type of expense is a health plan, they go out and they buy their own insurance with that allowance.

William Tincup: 09:24 Right. So… No, finish your thought.

Victoria Hodgki…: 09:28 No, sorry. No, I was just going to say the contribution, it’s known for the employer, they know it can’t go any more than the top of their allowance per month. And it does really vary widely from company to company.

William Tincup: 09:44 So now on the perk side, how do you go about educating your prospects and your customers? In terms of… What’s not just available, because it’s a sea of things that are available, but what’s working, and getting them to rightsize the things that would be the most effective, because a perk’s not a perk unless somebody uses it, right?

Victoria Hodgki…: 10:10 Exactly.

William Tincup: 10:12 So it is a kind of game of consumption, you want your employees to use it, so how do you have the conversation with your prospects and your customers?

Victoria Hodgki…: 10:24 Yes. So one of the things we suggest if prospects aren’t sure is to do an employee survey, and we actually have a template that they can use if they want to go out and understand what employees want. Because we just did a recent report, we surveyed some of our customers, because we think we’re in a fairly unique position to be able to bring insight and amplify the voice of smaller employers, because so much of the media market research focuses on enterprise, large companies that everybody knows their brand name. So what our report showed is that 82% of employees feel that the benefits package is an important factor in accepting a job, and then once they’re in the job, 65% want a say in what those benefits are.

11:18 So a good way to understand that is to run a survey, some prospects come to us because of compliance, because they need to be offering these reimbursements in the state of California for a cellphone and internet. But mostly they’re coming because they want to provide more personalized benefits, let employees pick and choose, so a survey is a good way to do it. The other thing we suggest is just to allow a lot of these subcategories, so you can really define a wellness stipend very broadly, and for some people wellness will mean yoga classes, and for somebody else wellness will be a meditation app, or health services, or you can even make massages available under a wellness [inaudible 00:12:08]. And that lets employees, if you define it broadly in the software, really pick and choose what is most meaningful to them.

William Tincup: 12:14 Well I love that, because then you get into hyper-personalization, just because your peer loves yoga doesn’t necessarily mean that you’re going to love yoga, or that you want to do yoga. But I think this cookie cutter approach that we’ve historically had, where we cast everyone in the same light, I love this approach of being able to say, “Okay, here’s what you can pick from, pick what you think is important to you, and you can change.” I love that.

12:46 I wanted to get back to what you said at the very beginning, in terms of designing and launching. The design part I think we’ve touched on a lot of different parts of it, so you can start with somebody that’s done some of this, you can start with somebody that’s never done any of this and you can get them to a place. The launch part is I believe the education and marketing aspects of getting the employees to understand what’s available to them, if I have that right.

Victoria Hodgki…: 13:17 You have that exactly right. It’s also things like having automated plan documents, so legally you need to provide plan documents under an HRA, and our software platform will do that. But the software will notify employees that they have a new benefit, it will provide help articles and other artifacts to help get them into the benefit. One of the things people really enjoy getting, is they get an email every time they’re reimbursed, and it starts with, “Ka-ching.” So we’ll let employees know where they are in the process of getting reimbursed, so that’s really kind of the launch elements.

William Tincup: 14:02 Love that. What’s working in launch, in terms of marketing and getting people to consume, again, both sides, both the health side and the park side? Because I guess a hundred years ago we would put posters up in the break room, we’re not doing that now. But what’s working today?

Victoria Hodgki…: 14:26 Ours are stuffing flyers into people’s cubby holes.

William Tincup: 14:34 Victoria, we can laugh about it now, enough time has passed.

Victoria Hodgki…: 14:37 Yes, exactly. So I think what really actually works, and this is going to sound funny coming from the CEO of a software company, but as good as the software is, really the secret sauce is having somebody, particularly at a smaller employer, who is enthusiastic and passionate about benefits. And most smaller employers do not have specialists on their HR team, so they don’t have the luxury of somebody who knows benefits inside and out. But what we try to do is educate whoever’s tasked with this set of problems, we try to educate them, and get them to be advocates and be enthusiastic, because that really makes a huge difference. We can make the software as simple and easy to use as possible, and we do routinely here, it’s very straightforward and simple. But it really helps when there is somebody at the organization, the nonprofit, or the business, who is really passionate about benefits, and then our job is just to enable him or her.

William Tincup: 15:48 I love this. All right, let’s move to the buy side for just a second, and what I wanted to start with is questions that prospects should ask you. So again, we’re dealing with somebody, maybe they’ve never done this, maybe they have, et cetera. So you got an array of different people, but questions that you just love fielding from prospects.

Victoria Hodgki…: 16:10 Yeah, I had a feeling you would ask this question, and it’s a bit of a tricky one for me, because for us we are doing so much educating. We would just say, ask lots of questions, make sure you really understand not only the concept but also how the software works. So we do rely heavily on our demo, we kind of are in the frame of mind that a picture is worth a thousand words. We really want them to ask lots of questions about, “Well how does the software work? Can you show me this?” But we also hope that they’ll ask about our support team, because we have a super support team. And then in our HRA world we do document verification, so we’ll actually look at receipts to keep the employer HIPAA compliance. So if you are administering the benefit, you’re not going to know what your colleagues’ healthcare expenses were. And so we hope that they’ll ask about compliance and HIPAA, because we feel those are strong suits for us.

William Tincup: 17:15 It’s interesting to me, because the experience that I have in this space, the shocker is cost, how much things cost, and that the cost generally speaking never go down. And it’s always been kind of an interesting conversation to have with business owners, it’s just like, “Okay, you want to do this, totally get it. Here’s all the different ways that you’re going to spend money on this, and for good reason, for retention, for engagement, for just all the right reasons, but here’s the different cost buckets.” And I’m always kind of amazed that when I talk to people that they didn’t understand how much things cost, or where some of the hidden costs are in benefits. First of all, that’s a bit dated, do you find that when you work with prospects?

Victoria Hodgki…: 18:13 Well, I think for our prospects there are probably hidden costs, but it can feel a bit overwhelming figuring out the benefits strategy. And is our primary goal hiring, is it retaining, is it doing right by employees and caring for them? And usually it’s some combination of all three. But again, if you’re a hundred person specialized accounting firm, which we work with, with employees in many states, you’re not going to have someone who knows benefits in and out.

18:48 So really it’s helping people navigate all the different options, and there’s so many acronyms as I said, there are HSAs, and HRAs, there are stipends, there are perks, what does all this mean? And then figuring out the cost. But again, with work perks and with HRAs, the employer is setting an allowance amount, and so that budgetary control is really helpful to them. And that’s not going to go up based on what the insurance companies come back with year to year, the employee’s cost go up, and so you may have to adjust your stipend, but it’s a lot simpler and just more known. So the finance team tends to love these benefits, because they’re a known cost you can plug into your financial model.

William Tincup: 19:41 And when I was meeting with the business owners, is sometimes they’re looking at cost containment, so it’s the juxtaposition, “I want to do the right thing, I want to do right by my employees.” At the same time, this is going to be a relatively large number line item on my budget, and so it’s kind of this really, really interesting dichotomy, or conflict if you will, internally for most business owners, is how do I do this the right way? And I love that y’all help them navigate that, especially for people that, again, they don’t have a benefits person, they might not even have an HR person, and they need people like you that can actually navigate the waters. Because for you it’s not, but for everyone else it is tricky, all this stuff is tricky, and it changes super fast, so I love it. You’ve mentioned the software, and I wanted to ask you about your demo. What’s your favorite part of showing people PeopleKeep? What’s your favorite part, when you get to this part in the demo, you’re just like, “I like this part.”

Victoria Hodgki…: 20:55 I think it’s when folks realize that it’s really simple for the employee as well, and it’s very easy to use. I have a good little anecdote, which we have a customer who’s a commercial cattle ranch, and they were talking to their account manager, at PeopleKeep we call them customer success managers. And the customer said, “I’d really like to tell the team at PeopleKeep thank you, because it is very easy for our employees to use PeopleKeep on their phone.” And this is almost a direct quote, they said, “Our cowboys are out on their horses all day long, but they can use their health benefit thanks to PeopleKeep.” And that was just a fun moment for the team to think about modern day cowboys out on horses with modern day benefits, so I think it’s really when people see that employees will find this simple to use, because if you’re doing this, to your point, you want employees to use your benefits.

William Tincup: 22:02 All right. Last thing is favorite customer story, without names, brands, or that type of stuff. But just something where you’re like, “You made a difference.” It touches your heart, you just love the story.

Victoria Hodgki…: 22:13 Yeah, I love the cowboy story, because it’s just a great mental image. And I will say I think the most fulfilling thing at PeopleKeep is we just see this very wide range of American employers, really all walks of life, all with very similar problems they’re looking to solve. I think our nonprofit customers really probably run the entire political spectrum, but they have a lot in common actually when they come to us looking for benefits. I really like when we can help an employer provide a great benefit, and save money. So we have a mortgage loan servicer who has about 80 employees, and when they came to PeopleKeep they were just looking at a really large increase in their group plan, and now they’re saving over $10,000 a month. And employees feel that they have a better benefit, because they’ve been able to go out and find really high quality plans, so that does feel good when that happens.

William Tincup: 23:16 Drops mic, walks off stage. Victoria, thank you so much for your time today.

Victoria Hodgki…: 23:20 Thank you William, it’s been fun.

William Tincup: 23:22 Absolutely. And everyone, thanks for listening to the Use Case Podcast, until next time.

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