In this episode of All Things Work, host Tony Lee speaks with Amy Spurling, co-founder and CEO of Compt, a firm specializing in helping employers build, streamline and scale employee benefits, on how organizations can identify benefits and perks employees actually value - and attract and retain great workers.
What employees want and what employers think they want in terms of benefits and compensation are often misaligned. In this episode of All Things Work, host Tony Lee speaks with Amy Spurling, co-founder and CEO of Compt, a firm specializing in helping employers build, streamline and scale employee benefits, on how organizations can identify benefits and perks employees actually value - and attract and retain great workers.
Compt was selected as the first winner of SHRM’s 2021 Better Workplaces Challenge Cup, a competition highlighting the most innovative workplace technology solutions.
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Tony Lee:
Welcome to All Things Work, a podcast from the Society for Human Resource Management. I'm your host, Tony Lee, head of content here at SHRM. Thank you for joining us. All Things Work is an audio adventure, where we talk with thought leaders and taste makers to bring you an insider's perspective on All Things Work. Today we're going to talk about what it takes to attract and retain great workers. At many companies, a key to success has been their ability to customize benefits and compensation packages to meet employee needs, even though those needs often vary based on the income, age and life stage of the employee. However, there are about three, four concerns that run across all demographics, anything related to physical health, to mental health and to work life balance. But the degree to which employers are meeting those needs is pretty uneven. What employees want and what employers think they want in terms of benefits and compensation often are misaligned. In fact, many employers are out of touch with which perks employees value most.
My guest today, joining me to discuss how companies can provide what employees really want is Amy Spurling. Amy is co-founder and CEO of Compt in Boston, Massachusetts. A firm that helps employers build, streamline and scale employee benefits. Compt also was selected as the first winner of SHRM's Better Workplaces Challenge Cup by a group of business and HR executives. Compt made it through three very competitive rounds with over 150 competitors, which must have been quite an exciting experience. Amy welcomed to All Things Work.
Amy Spurling:
Thank you for having me.
Tony Lee:
First, congratulations on your victory. I have to ask, so what was most memorable about the competition?
Amy Spurling:
Ooh, it was a pretty intense competition. It was pretty awesome actually meeting the other competitors as well as the finalists, that really stood out to me because really any of us could have won. We were all building something really powerful, but in different areas of HR. And so the camaraderie we felt as we were competing was pretty different from what I've seen in other competitions. And so getting to meet them, speak with them, hear them all pitch, obviously pitching Shark Tank style, Damon John was pretty intense as well, but overall, a pretty exciting experience.
Tony Lee:
That's great. Well, you guys should have reunions.
Amy Spurling:
We do, actually one of our competitors ended up buying our software. They're one of our customers now. Another one I spend a lot of time on text with too, we built some pretty interesting friendships coming out of SHRM.
Tony Lee:
That is wonderful. Very, very cool. All right. So let's pivot a little bit. So tell me, why don't employers know what their employees really want?
Amy Spurling:
Because it assumes that everyone, there is something that everybody wants and we're all human and that's just not a thing. And that's why it's so unfair that HR gets this huge task of trying to make everyone happy and go find the vendor that's going to do that. It's literally not a thing. And so I feel really bad for HR leaders because they've been tasked with something that's really impossible because every person wants to do something different.
Tony Lee:
Yeah. So what do you say to the HR person, or frankly, their boss, the CFO, or the COO who says, well, we feed them, we give them that and we do spot awards, and they think that's all you need to do. What's your response to that?
Amy Spurling:
How comfortable are they with employee turnover? Because in this market that doesn't work. That just, it's not... You could get away with that for a while. We've gone through quite an evolution in employee perks, I'm a three time former CFO. So I built this company because I saw this shift in the market where tech companies were great at coming in and being like, hey, we've got kombucha on tap and an espresso machine and there's massage chairs and all kinds of things that you could bring into your office. And then they started realizing people don't use any of it. It's really cool for maybe a month. And then you get really low utilization and it's a really expensive strategy that doesn't speak to your entire team. And so they needed to start shifting. You can't just add more and more and more because employees are just going to check out. So they needed to shift what they were doing and COVID forced that to happen because so many companies went remote.
Tony Lee:
And that brings up a completely different type of benefit, when you don't have employees in-person?
Amy Spurling:
Exactly. So lunch in the office is no longer a thing because, well, where is the office? So, you have to shift. And then people coming in to spending a lot of money on that. But even with that, you think about, okay, great. You brought in tacos on Tuesday. What about the people who don't eat dairy? What about the people who don't eat meat? What about the people who have various allergies or are on a keto diet or whatever the thing is, there's always someone who just isn't going to eat the food. And so even with food, which is a basic human necessity, you're not going to make people happy, and that's not enough to retain employees, honestly, that's just a, okay, fine, there's lunch in the kitchen. But when a new job offer comes in my inbox, I'm still going to consider it.
Tony Lee:
So let's start talking about what HR should think about in terms of figuring out what employees want. Does it start with pulse surveys, employee focus groups? How do they start putting their hands around what their employees want?
Amy Spurling:
I think they start looking at what outcomes they want to drive. So stop trying to read people's minds, you're not going to. Look at what outcomes you're trying to drive. Are you trying to get really high employee engagement? Are you trying to reduce your turnover? Are you trying to hire faster? Focus more on outcomes and less on how you get there, because there's some easier ways to get there quite frankly. And so really honing in on what those outcomes are, is something that is a shift for HR, because they've been given the task of here's the thing, get me the thing. And so this is a different approach, which honestly adds a lot more value to the organization and gives them a much bigger seat at the table because they're driving strategies rather than scheduling yoga in an office on Tuesday and becoming the office admin, which is where perks were taking HR, which is completely unfair.
Tony Lee:
Yeah. So I talked at the beginning about the importance of physical health, mental health, work life balance. Do you buy that benefits really need to focus on those three or is that limiting?
Amy Spurling:
Honestly I think those concepts are exactly spot on. That's where a lot of companies are looking at that right now, because there's so much burnout. You really do need to find new ways to keep your team healthy as well. So health and wellness is a very big deal when you've got people, especially working remote or hybrid because they're just not moving as much as they were. They're not even walking to their car and driving, they're in their house. And so we do see that as being very key as part of company strategies. What's different is thinking about if that's the outcome is a healthy and engaged team, focus more on that and less on the, should this be a mental health app? Well then, which mental health app? Should this be a gym reimbursement, should this be running shoes? Focus less on the minutia and more on the outcome.
And HR is going to have a much easier time of it. That's where we've seen a huge rise in stipends across the entire industry. So, Microsoft has been doing this actually for, I think 15 years, they've had a health and wellness stipends. They've been doing this for a very long time, just doing it in house. And so they've figured out how to make that work. But the whole goal is given a budget to employees, tell them it's for health and wellness, and then let them do the things that matter to them. Employees are very good at understanding their own personal needs. They don't need someone to tell them what they need. They need someone to support them in what they already know that they need. And so it just changes the dynamic and makes it much easier for HR and the employees.
Tony Lee:
So volumes have already been written on the great resignation. How much do you think benefits play into the great resignation? Is that really a key driver or is it just a part of a bigger puzzle?
Amy Spurling:
It is a bigger puzzle. I think that flexibility honestly, is going to be the first line of defense. If you are a, we are only going to be in the office kind of company, you are going to lose employees that want flexibility and want hybrid or remote. So that's going to be a bigger driver than even if you offer them a whole bunch of benefits, because people are just saying, I've had enough, I'm not going to commute in a car for an hour each way each day and just waste my life that way. And also we've proven for two years, you don't have to.
So I think that's the first piece, is the flexibility piece. But the second piece is around benefits. That is where companies differentiate because you've got 80% of your compensation is the table stake stuff, your salary, if your salary's not competitive, you're going to leave, if your health insurance, if they're not offering it to you and that's not competitive, you're going to leave. And so that's already covered if they want to compete for talent at all. The last 20% of compensation is where you find all those employee perks, stipends, different approaches to compensation, living stock options, things like that. That's where companies can really get very competitive. Even for the small dollar amount. It's a much less expensive portion of the compensation stack, but it's how companies can differentiate themselves, make themselves more inclusive, build more diverse teams. There's a lot of opportunity there even though it's smaller dollars.
Tony Lee:
So, I hate to generalize, but millennials are making up more than half the workforce on their way to three quarters soon. And the feedback that we see in the research of millennials is it's not money that's motivating them, it's work life balance. It's ability to take time with the kids when they need to. How do you build that into your perks? That recognition of what millennials think is important?
Amy Spurling:
Well, first I want to clarify, millennials are 25 years old and they're 42 years old. So there's no one block of people that is millennials. They're in very different life stages, even within that group. I think it's, again, looking at there is a desire for that balance. And so the way we think about it is around, again, perk stipends, you can say, hey, we support family or wellness or professional development, but let employees determine what family means. For somebody who has kids, maybe it's a babysitter for a night off. Maybe it's some extracurricular activity you want to put the kids in, but everyone has a family, not everyone has children.
And so accepting that family can be a lot of things to a lot of people makes it much more inclusive and allows for that balance, allows for that employee personalization so that typical employee perks, you see maybe five, 7% utilization. So even the good stuff, student loan repayment, childcare, you're going to get very low utilization bringing them to an organization. If you've moved to a more personalized approach through a stipend, you see 90% utilization. That's just off the charts different. If your team is using their benefits, they feel supported by you and they're more likely to stay.
Tony Lee:
So this is interesting. If you follow the stipend approach, what kind of restrictions do you typically see around the stipend? Could they be used for essentially anything?
Amy Spurling:
Well, usually it's category based is the first part. So it's not a piggy bank because you want it to feel special and that they're being supported in a unique way, because otherwise a piggy bank's a piggy bank. They could go to another company with a piggy bank. What we see is that, there are some... That around the categories, you have different tax differences. Some of these benefits are taxable, some are not. And so understanding that and depending on whether you try and do this in-house, which can be a little bit, it can be difficult, not going to lie. I tried doing that at prior companies and just jerry-rigging something. It's pretty difficult to track that stuff. But if you used a perk management software, perk reimbursement software, that's where you can track what's taxable? What isn't? It'll do all of that for you.
And then you can mix and match. So we love to see things like wellness, family, pets, a lot of times cell phone and internet will be lumped into that group because a lot of companies are offering that, that's budget that can now be expanded. So it's allowing people to have this choose your own adventure, where if you don't have children or you don't want to use the family benefit, maybe you use it for a pair of running shoes, but you don't need a pair of running shoes every single month. So maybe the next month it's for your cell phone bill. And then it's just, it allows you to have this flow that is really natural for employees, which drives up engagement. So you have some rules, but the best companies don't have a lot of rules, because quite frankly, the more rules you put in place, the less they're going to pay attention, the more they're going to try and break them and it's not going to be an effective plan. It just doesn't work.
Tony Lee:
Yeah. Is there any risk with this approach of an employee saying yeah, yeah, thanks for the stipend, but just pay me more? Forget the stipend, I just want more money.
Amy Spurling:
Oh, there are definitely going to say that. No, they will definitely say that. A hundred percent of the time if you asked an employee, hey, would you rather have more cash or would you rather have a stipend you can use for wellness? A hundred percent of the time they're going to say, just pay me the cash. The challenge there is that it doesn't keep them engaged. They don't see it on their paycheck, because no one sees pay stubs anymore and it doesn't retain them. So what's interesting is Google actually did an AB test on a portion of their team a few years back to look at that very, very concept. Every engineer says, just pay me more. And then a bunch of folks were like, okay, sure. We'll take the experiences and more of the concept based benefits. And what they found that it was astronomically different on retention of those employees that actually use their stipends versus somebody who just got paid more cash.
And so even that's the, what the employees say they want, it doesn't keep them retained, because think about it this way, imagine you're given a hundred dollars pre-tax on your paycheck in a month, maybe it's split $50 over each paycheck if you get two paychecks in a month, post-tax, you're looking at what? 35, $37? You're not even going to notice that in all likelihood in your paycheck. Whereas if you have a hundred dollars that month, that you can only use for things that are wellness related and you're going to lose that hundred dollars if you don't use it, you're going to go and use it for a massage or for running shoes or your gym or whatever it is. It forces that engagement piece, which then creates those outcomes that the company is looking for, because ultimately it goes back to outcomes.
Tony Lee:
Yeah. And then you can show off your new sneakers to your partner or your parents or whomever. Look what my company gave me.
Amy Spurling:
Well, it's also, you bring up a really interesting point. So imagine that a hundred dollars went into your joint bank account with your spouse and maybe you're supposed to be planning for your 529. You've got kids, you're working on college. And then all of a sudden you were like, you know what? I'm just going to take this a hundred dollars and go get a massage on this Saturday morning. We'll worry about the 529 later. That is going to be a meritable battle. Whereas if this is carved out and you have to use it for that, you suddenly have permission to take care of yourself and do something for your own health and wellness that does not negatively impact your family. So driving outcomes and making it a lot easier for employees.
Tony Lee:
Yeah, it makes perfect sense. So, at the risk of using a broad brush a second time, so gen Z, 24 and younger, research coming back, they're all about money. They lived through the great recession. They saw their parents lose their homes, or at least spend their college funds. Their show me the money. So are they as receptive to this approach, do you think?
Amy Spurling:
I do. So what we are seeing is, again, we've got over 90% utilization across our platform. And so we see very, very high engagement with people utilizing their stipends, because you get the personalization. So those gen Z folks can still use it in a way that matters to them. If you're telling a gen Z person, hey, you can use this one mental health app. And by the way, we have this one food delivery place that may not work for the town that you've relocated to in the pandemic, you are going to lose them. They're not interested, but if you allow them to personalize that, they're still in control, they still get to make those decisions for themselves and get supported in a way that is meaningful to them.
Tony Lee:
Yeah. So one other area here I wanted to touch on. We've seen a lot of research, including from SHRM that employees who don't have the kind of work life balance that they want have said, look, I'll give back perks. I'll give back benefits. I'll give back salary if you let me work remotely a hundred percent of the time, or if you let me have open leave so I can take off when I need to. Is that not the most important benefit that a company can provide? How would you feel about a company that takes that seriously and makes that their benefit?
Amy Spurling:
I don't think they're going to be competitive, because that same employee can just find another company that offers that flexibility, those companies are everywhere. That's the easiest way to attract employees because the first thing they're going to ask is what the balance is like and what your work remote policy looks like? So they shouldn't have to also give up these other benefits, because companies are doing both. So the first hurdled across is you better be flexible if you want to keep those folks. And second, if you're making them give something up to be able to get that, you're still going to lose them because there are other companies that are going to offer them the flexibility and pay for those benefits. Because again, we're talking small dollars, but companies that are focused on outcomes and getting the best talent are definitely adding that into their mix, because they know it's a way to be competitive and to get the best talent.
Tony Lee:
Yeah, well it makes perfect sense. And that's great advice. That's going to do it for today's episode of All Things Work, a big thank you to Amy Spurling for joining me to discuss what employees really want and how to provide it. And also I want to mention that the Better Workplaces Challenge Cup is going global in 2022. And the application process is now open for startups with five million or less in funding or in revenue. The first rounds will begin in February with the finals at SHRM's annual conference in New Orleans in June. So if you've got a business and you want to be considered, check it out, you can go to shrm.org for more information.
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