Why This CFO Helps Employees with Their Personal Finances

September 9, 2021

Providing your employees with a great experience at work doesn’t happen with a one-and-done checklist. It’s an ongoing conversation between the organization and employees, where both sides help each other meet their needs. In this conversation, the benefits package you build for your employees is worth a thousand words: it either confirms or negates everything you say about your company culture or your employees’ value at your organization.

At BambooHR, one of the ways we “walk the walk” is by including financial well-being in our benefits. We first added Dave Ramsey’s nine-week financial planning course, Financial Peace University (FPU), as a core employee benefit in 2012, and since that time almost 20 percent of employees have chosen to take the course. We see it as an investment in employee prosperity and a demonstration of two of our company values: “Enjoy Quality of Life” and “Grow from Good to Great.”

We sat down with our own CFO, Kent Goates, to explore:

  • How FPU and other key benefits have proven instrumental to our culture, performance, and talent acquisition initiatives
  • How the course fills a need for our employees
  • Why he views financial health as one of the crucial HR pillars that sets employees free to do great work
“Financial peace is a really beautiful thing.” —BambooHR employee and FPU graduate

Financial Health: One of Four Foundational HR Pillars

At BambooHR, we believe that every benefit should meaningfully contribute to four essential pillars of support for employees:

  1. Physical health
  2. Mental health
  3. Social health
  4. Financial health

When a benefits package doesn’t consider the “whole being” of an employee, it may end up looking, feeling, and operating like slap-dash offerings pulled from a hasty HR checklist, as opposed to a deliberate and strategic suite of benefits that add real value to employees’ lives. So, why did we add FPU to our benefits package?

“Financial health…impacts [employees’] mental, emotional, and physical well-being,” says Kent, “which all affects their ability to concentrate in the office. All of these pillars intertwine.”

Together, all four pillars create a stable foundation from which employees can perform their best work, free of outside stressors.

Addressing the Most Common Financial Mistake: A Failure to Understand Interest and Debt

As CFO at BambooHR, Kent brings over forty years of experience as a licensed investment adviser in addition to his experience as a CPA, venture capital partner, COO, CEO, and even as an expert witness often summoned to weigh in on court proceedings—a responsibility he insists is far less cool than it sounds.

“There’s an old adage that always bears repeating,” Kent says. “Those that don’t understand interest, pay it. Those that do, don’t.” He believes improving financial health begins with a proper financial education. And the most common mistake that people make with their money? “A failure to understand interest and debt.”

Financial Peace University provides the financial education that people just aren’t getting elsewhere via a nine-week course that walks participants through a step-by-step plan for getting out of debt and putting their money to work.

“Every FPU lesson made me realize that everything I had been taught to believe about money management was wrong. That was a hard pill to swallow, but what a wake up call! Thank you BambooHR for putting me on the right path for financial success!” —BambooHR employee and FPU graduate

Kent points out that even people who achieve advanced degrees regularly miss out on financial literacy curricula unless they are specifically pursuing a career in finance. What happens then is the tendency to follow the norm, which is to say, they amass debt.

“Credit card debt, installment debt, consumer debt, home debt,” lists Kent. “All of those things have a place, but they have different levels of priority and importance.”

And when bad debt compounds, anxiety takes over, meaning we’re less and less capable of making good financial decisions. This is the state of mind that can begin knocking down employees’ other health pillars and affecting their quality of life both at home and work. Engagement and satisfaction suffer, performance suffers, and finally the customer experience suffers.

But by offering FPU, Kent believes BambooHR can fill the financial education gap for employees and help them achieve the life benefits that financial peace makes possible:

  • Better relationships
  • Reduced stress
  • Better health outcomes
  • Improved work performance
  • Career growth

“If you can grow without debt, it gives you complete freedom,” says Kent. As CFO, he keeps BambooHR operating in a debt-free model—uncommon in the SaaS industry, but completely in line with the philosophies he hopes to pass on to employees through FPU. “In order to have debt, you end up having loan restrictions or covenants you have to keep, or ratios you have to maintain—a lot of overhead. Even though your bank is not an owner in your company, they largely control the actions you can take. And the same is true for individuals.”

Are Employers Responsible for the Financial Health of Employees?

When it comes to financial health, where does employer responsibility end and employee responsibility begin? Should you really take it upon yourself to overhaul each of your employees’ debt-to-income ratios?

Does improving employee experience feel like an uncrackable code?
Learn how to create a culture employees love with our Definitive Guide to Company Culture.

“I don’t think employers are responsible for their employees’ financial well-being,” says Kent. “That’s probably an overstep. We invite our employees to take the Financial Peace course, and we try to do other things that lift financial pressure off their shoulders.”

Here are the other benefits BambooHR offers to help lighten employees’ financial burdens:

  • Fair and competitive compensation
  • Well-researched health insurance
  • Industry-best 401(k) options
  • Paid-Paid Vacation stipends
  • Retained financial advisers

Each piece of the BambooHR benefits package addresses and strengthens an HR pillar—mental health, social health, physical health, and financial health—and makes it possible to get the most out of other benefits.

For example, when we give our employees the tools to improve their financial health, they become more adept at taking advantage of health insurance for their physical and mental well-being, and more knowledgeable about how to leverage their 401(k) options for their long-term peace of mind.

Additionally, when we reimburse a significant chunk of vacation costs for employees with our Paid-Paid Vacation benefit, we’re not just encouraging them to use their PTO; we’re encouraging them to maximize their time away. The idea behind this benefit is that by absorbing some of the financial (and thus mental and social) burden of traveling, we’re making it easier for employees to truly relax, spend valuable time with family, and come back to the office refreshed.

“We’re not trying to be involved in their lives in a way that is inappropriate,” insists Kent, “but we’re trying to make it easier for them to do the things which help them have financial freedom.”

To that end, it’s never obligatory to use a benefit. While employees are automatically enrolled in the 401(k) plan, they’re free to opt out, though we remind them that missing out on contribution matching is as good as throwing away free money. And, like we mentioned, FPU is an invitation. It’s up to the employee to take the course and apply the lessons to their life.

BambooHR has invested close to $30,000 in FPU course reimbursements, helping our employees reach over $2,000,000 in total savings achieved and debt paid.

How Does Financial Health Benefit Both the Company and the Employee?

Before the pandemic, Kent would publicly recognize each FPU graduate with a crisp 100-dollar bill at our monthly company update. As our workforce has since evolved to include hundreds of hybrid and remote workers, reimbursement for the course is now deposited directly into the graduate’s account—but the sentiment remains. To date, BambooHR has invested close to 30,000 dollars in course reimbursements, and in doing so, helped employees to reach over two million dollars in total savings achieved and debt paid.

BambooHR employees have called FPU “life-changing,” “a godsend,” and even fun. But the gains we see as a company are in engagement, our culture of mutual progression, and our talent acquisition efforts, as we try to create a place for great people to do great work.

“When employees see that BambooHR is living by its values,” says Kent, “and when people start to see and feel that leadership really does care—that the principles that are encompassed in our values really mean something to them—they can then take up those same values and apply them to their work. It all wraps together.”

In this way, the employer-employee conversation that begins during the interview process and continues during hiring and onboarding becomes an ongoing conversation about mutual growth. When everyone’s needs are being met and the HR pillars are strong, employees can put their worries to bed and accumulate emotional and financial capital to invest in their dreams. Knowing that their employer cares about every facet of their health, employees can bring their best selves to work every day and then carry that energy through to create amazing products and a stellar customer experience.

How Can You Invite Employees to Improve Their Financial Health?

It’s easy to imagine that the best way to invest in your employees and energize your culture is via compensation, and this is true to the extent that compensation helps sustain your culture—as long as you don’t over or underpay. Paying far beyond a competitive rate isn’t sustainable, nor does it send the right message if you’re seeking candidates who are motivated by other things than money. Meanwhile, paying below fair market compensation is a sure-fire way to lose talent. So, if you can square away paying fair and competitive rates to your employees, the next way to invest in their prosperity is in the benefits you offer.

“When you’re creating programs to support your employees, it has to be real and it has to be sincere,” says Kent. “It has to be done without the perception of other motivations.” This is especially true of financial health; it’s a conversation that’s as important as it is sensitive. Fiscal responsibility isn’t something to coerce, but it affects every other pillar that supports a stress-free, productive working experience.

To make the right impact, a financial health benefit—and any other benefit, for that matter—has to come from a genuine place. It should connect to your company identity and meaningfully add to your employees’ experience. Consider the following questions:

  • What are your values?
  • Are employees convinced that your leadership team lives by those values?
  • Do your benefits reflect, stand apart from, or perhaps even contradict those values?
  • How deliberate are you in maintaining your company’s culture?
  • How do you measure your employees’ experience?

Kent shares the drastic effects misaligned benefits can have on culture: “As a consultant, I’ve gone in and I’ve seen where a culture just isn’t working. It’s in the data—participation in programs, customer satisfaction. Maybe [the company has] stated values, but they’re not living them, nor does anyone perceive that they’re being lived.”

And it’s not as easy as picking different benefits and calling it a day. “Simply doing the mechanics of making changes [to benefits] won’t necessarily fix culture,” Kent points out. “You have to have buy-in from leadership. You have to have enrollment from the top. If you really want to have the effect you need to have, it’s really the culture and the values. It’s the whole thing. And everyone needs to be on board.”

When leaders lead with sincerity, make educational opportunities an invitation, and celebrate successes, universal growth will follow.

“My job as CFO is to sweep the corners,” says Kent. “Because when things are clean, companies can grow without the turmoil of financial woes. Same thing with individuals. Without debt and all of the clutter that comes with it—that’s how we grow.”

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Rebekah Cuevas
Copywriter

Rebekah Cuevas is obsessed with empowering the “human” in human resources. As a next-gen, Latinx, and LGBTQ+ author and editor with over a decade of B2C, B2B, and creative writing experience, she connects HR pros to impactful HR solutions through research-driven narrative with a special interest in promoting DEI initiatives that build stronger, safer, and more profitable workplaces for all.