Transcript
Mark:
Welcome to PeopleTech, the podcast of the HCM Technology Report. I’m Mark Feffer. My guest today is Sean Luitjens, the Chief Product and Marketing Officer for uFlexReward. They’re a digital global total reward solution, which combines total reward data silos into one realtime, always-on platform. We’re going to talk about The Great Resignation and its impact, how employers are reacting, and more on this edition of PeopleTech. Hi, Sean. Welcome. Thanks for coming by. Tell me about uFlexReward. What’s it do, and how do you do it?
Sean:
Yep. So uFlexReward is a digital total rewards platform. I’m glad we have a few minutes to walk through it. If you imagine your entire human capital management stack, and all the point solutions, HRIS, payroll, et cetera, we sit over the top of that so that you can report holistically across everything you have going on. Specifically for us, it’s typically around the human capital spectrum. So even pulling in from finance, but your total rewards package, and then on the flip side, since it’s all interactive and API-based, the ability to have employee engagement.
Sean:
So, their ability to do open enrollment on that platform, and then those choices then funnel back down to the point solutions. So if you can imagine on the bottom of a human capital management stack across all the countries, the hundreds and hundreds of potential systems that you have where data is held, we layer across the top of that. We’ve defined ourselves as a platform as a service. I think of it sometimes more as a construction platform. So if you think of something solid sitting on top of all of the items across the bottom, so now you have a solid fundamental foundation to then handle and manage all your reporting interaction with your employees.
Mark:
Can you talk more about the data, because it seems to be a key part of the offering?
Sean:
Yep. So, a key part of what we do is aggregate the data. We call it gathering as we go. We have built two unique pieces. We have a really open architecture, where we can gather up all the data, and that sounds pretty simple, but when you start thinking about scale of multiple countries, and multiple tools, and then normalizing that data, there’s a pretty cool process in place to make that happen. The second piece is we have a unique rules engine, and so differing from some other companies, we don’t just pull up the data of what someone’s potentially making, et cetera, but it’s all the rules that a company has in place, and all the policies that they have, so that you can then go ahead and start to forecast what’s going to happen in the future as well. So, both of those pieces are then aggregated across the data, and one of the cool things we can do is we can stand that up for large companies in 90-ish days, give or take.
Mark:
Now, you guys sit in an interesting place in terms of looking at the whole employment market, and what employees are thinking about, I think. There’s so much talk right now about retention. What are you seeing?
Sean:
So for us, and this is where I’m glad we’re getting away from our product per se, but the marketplace, I think the personalization rewards and the communication of those rewards are really key. So, if you think about a reward package, it’s been pretty analog. You have your pay, and you have your benefits, and you might have a wellness package, et cetera, but you, potentially Mark, don’t get to choose where you spend that money. In the U.S., I’ll use the example of medical. The value of someone who’s single, that value of that package you’re providing to that employee’s different than someone who has a family plan. I think what employees are looking for is the ability to maximize the return they’re getting on the compensation package. I actually think companies are going to want to do the same thing.
Sean:
They want to spend X amount of dollars, and make sure the employee values every dollar of that that’s out in the marketplace. I think that personalized rewards is where people are going, and that allows them to retain their employees better. One, by offering to get all the spend, and then secondly, can you communicate that value out there to them? So companies want to… Everybody wants to be in the top 50th percentile, and some picked others, but always we want to be in the top 50th percentile of our offering. Not all companies can be in the top 50th percentile of the offering. I don’t have my MBA Mark, but I’m guessing about half can be in the top 50th percentile, and so I think there’s a huge gap in that middle 50 percentile actually, where companies that are offering 60th, 70th percentile in package aren’t communicating it well, and aggregating the data up, and rolling up for the employee to tell them this is what we’re offering them.
Sean:
There’s going to be companies below the 50th percentile that do a great job of that, and get to actually market out that they’re doing better. I think the reason people leave a lot of times is they just don’t know, and it’s not a statistic that is out there, but the number of people who probably leave a job thinking I’m getting a better pay raise, I’m getting an increase, and they just didn’t do all the complete math because it wasn’t laid out for them to say this is what the package is compared to point A and point B.
Mark:
Now do you find that your customers are asking for different things than they had been before, especially as you’ve got The Great Resignation, retention problems, and all of that?
Sean:
Yeah. I think they’re looking for us to help them create packages that are better for the employees that people can’t get anywhere else. So again, with the personalized rewards, you think about choice, I’ve been using the analogy, since I’m a little bit of a simpleton Mark, about a grocery store. Even in the grocery store, you currently budget yourself like a company would budget an employee spend. When you go to the grocery store, you spend it where you want. Right now in compensation in benefits and rewards, you are spending it by the aisle or the department. So no one in their right mind goes shopping with a budget and says you only get $10 in the bread aisle. You get $5 in the cookie aisle. Well, that should probably be more like 15, if it’s 10 in the bread aisle, but you don’t do it by aisle.
Sean:
If you can start to take and move that across and say, “What if we let employees shop either by the department, so all produce, all whatever, or just by the store?” Your salary’s $150,000. You can spend that $150,000 within reason, there’s guidelines from statutory law, minimum wage, other items, but we’re going to let you spend that $150,000 to build it out in a very personalized way so that the company knows for this role, we’re paying 150, and they’re going to maximize value, and the employee knows I’m getting $150,000 worth of stuff, whether that’s a $100,000 in base pay and 50,000 in benefits, or 125,000 in base pay and 25 in benefits. Then one step further is do you allow employees to put their money where their mouth is around how they leverage their pay?
Sean:
So we’re starting to get companies ask the question, could we offer our employees a $1.25 in short-term incentive for every $1.00 of base pay? So you give me $1.00 of base pay back, and I’ll set your target bonus at $1.25. The merit increases are all at 2 to 4%, and so it’s hard to pay people more to keep up with the whole great reshuffle, The Great Resignation, if you only have a 2 to 4% merit budget, but what if you let them start to choose how they allocate that money, and even go so far as to choose do I want to allocate that between the company leverage, individual leverage, or a mix?
Mark:
I wonder if you see alignment between employees and employers about what the needs are, or do they diverge?
Sean:
I just spoke last week, and one of the first steps and keys to personalization was a company taking their first step to offering personalized rewards, is to figure out who you are. So if you’re really conservative, and this is the model you want to have, what type of employees you have, who do you really want to be, and where are you really going to go? Because I don’t think every company wants to look and see where they are, because that then alignment of who you want to be and the type of people you want to have needs to align with your current staff and those you want to attract as well, because otherwise you’re just creating a fork in the road before they even arrive.
Sean:
If you want high performers, but you’re not going to give them any leverage, for example, then you have a fundamental problem. But I think the big thing in aligning those is having tools that are flexible enough to align your corporate mission, where your structure is, the internal and external factors in that, and be able to align that to what the employees want, because there’s a lot of thought that’s gone into what’s the best benefits enrollment system? What’s the best medical system, best HSA system, the best pay equity system, the best payroll system, the best HRIS? So how do you bring those across so that you can allow people to move those things across without burying your HR department?
Mark:
I wanted to shift gears a little bit, and go back to talking about the company. You’ve got an interesting corporate history with your spin out from Unilever. Could you tell me about that?
Sean:
I’m newer, so I always get the timeline a little bit wrong on the exact origin, but if you call it seven or eight years ago, maybe nine years ago, Unilever did want to go to a personalized rewards, and be able to create some of these things we’ve talked about. They went out to market, and couldn’t find anybody to do this, and so the visionaries at the time that were there basically said, “We’ll build it ourselves.” So they got some consultants, found some developers, and built this tool out so that they could go ahead and have personalized rewards and create choice across, create total reward statements for all employees, not just those that are in the office, but factory floor workers, et cetera. They started then, as large companies do, talking to other people that are on their market telling them what they were doing, getting a real handle on their spend.
Sean:
They had huge amount of money that they just couldn’t… They knew what the spend was, but they couldn’t find it. A good one would be car allowance. Tell me how much car allowance we’re spending in the world. Well they’re in 170 countries, so how do they find that without someone going on a mission to grab 170 countries worth of data? So having all that in one place and managing was the goal. They build this. They start telling their peers out in the marketplace and others they’re doing this, and they’re like, “Well, where do I get that?” They then said, “Well, you can’t have it. It’s ours.” Basically, went back and said, “Well, what if we spin this out?” It’s actually a conversation I wish I could have been a fly on the wall for, Mark. So here you have Unilever Venture Capital who generally is buying fast-moving consumer goods products, investing in fast-moving consumer good products, and they went and pitched, hey, how about building a SaaS software company for human capital? They said, “Okay.”
Sean:
So they said, “This is a good enough idea. We think it’s going to work.” They started to get that ready to go out to market to be public, to then fund it out of that. Then COVID happened, like for many businesses. I think good news for Unilever, selling plenty of toilet paper and ice cream during COVID, as people were stuck at home. Waited really until last year, and kicked out the company. I think it technically founded in 2019 on paper, which obviously right before COVID. So last year was the first round of funding for the company. Unilever’s been a great partner as we go out to market. We just launched in January with website marketing, getting out in the market. So it’s kind of a weird history having been around, I don’t want to say I’m super old, but having been around a long time, it’s kind of cool to see a tool that’s this baked by the time you go to market. It just is kind of a wide range of events that happened.
Sean:
So you can see who’s selecting what, and we’re going to allow you to then roll that information back down so it can be administered. Now companies will be able to pick the best of breed between them, as well as I don’t know, I’ve been calling it the currency, the exchange rate, but if you imagine being able to now trade in wellness, or set the bar at wellness for dollars. So I don’t know if you’re familiar with Virgin Wellness, not to give them a plug, but I think they do a good job. They have a wellness tool, and it might be five points for the dollar, but if your corporate vision is to create wellness, then maybe you make that $3 per point. If you want people to take more vacation time, instead of doing straight math on vacation, salary divided by number of days, potentially you now can change that rate. So we become the currency, the exchange rate between all these benefits that allows companies to move ahead, and build out a really cool infrastructure for their employees without having to change everything.
Mark:
Well, listen, Sean, thanks very much for stopping by today. It’s been great talking with you.
Sean:
Oh, I appreciate it. Thanks for having me.
Mark:
My guest today has been Sean Luitjens, the Chief Product and Marketing Officer for uFlexReward, and this has been PeopleTech, the podcast of the HCM Technology Report. We’re a publication of RecruitingDaily. We’re also a part of Evergreen Podcasts. To see all of their programs, visit www.evergreenpodcasts.com. To keep up with HR technology, visit the HCM Technology Report every day. We’re the most trusted source of news in the HR tech industry. Find us at www.hcmtechnologyreport.com. I’m Mark Feffer.
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