Building Better Financial Wellness in 2022

Kristen Carlisle, General Manager at Betterment
Dec 8, 2021

If small businesses can help their people make the most of their paychecks, will they stick around longer? On this episode of POPS!, Betterment General Manager Kristen Carlisle joins the show to talk about the financial benefits small businesses should consider offering employees.

Seven in 10 employees believe that it’s their employer’s responsibility to make sure they’re set up for financial success.  If small businesses can help their people make the most of their paychecks, will they stick around longer?

On this episode of POPS!, Betterment General Manager Kristen Carlisle joins the show to talk about the financial benefits small businesses should consider offering employees. You’ll hear how to help employees save for retirement and ensure they feel taken care of financially so they’ll be more likely to stay.

After you listen:

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On this episode, you’ll hear: 

  • [01:24-02:22] Meet Kristen Carlisle, General Manager at Betterment
  • [02:49-03:56] Why offering better personal financial planning is good for small businesses
  • [04:19-05:58] How small business owners and employees can prepare for emergencies
  • [07:21-10:18] The importance of holistic and personalized financial advice
  • [11:05-13:13] How small businesses are helping employees with retirement and financial planning
  • [13:14-15:37] How the Great Resignation is affecting financial benefits for employees
  • [15:39-18:58] What employers need to know about the retirement crisis in America
  • [18:59-22:20] How employers can help employees financially outside of retirement benefits
  • [22:21-24:11] The 50-30-20 rule
  • [26:01-27:57] How Betterment helps people save for retirement
  • [28:02-31:36] Where to start in terms of offering financial benefits 
  • [31:40-33:21] How to start conversations about financial benefits with employees
  • [33:37-34:29] How the retirements and benefits space is changing for the better

POPS Star Bio

Kristen Carlisle is the General Manager of Betterment, a financial advisory company providing robo-advising and cash management services. Kristen oversees Betterment’s 401K offering for businesses of all sizes.


Didi: On this episode of PIVOT, a POPS! show by Zenefits. 

Kristen Employees are actually looking to their employers and seven out of 10 employees actually believe that it’s their employer’s responsibility to make sure that they’re set up for financial success. And so we’re talking about the fact that the narrative around 401k has also changed. It’s no longer a luxury it’s becoming a baseline benefit.

Didi: The people ops podcasts from Zenefits, the only show dedicated to small businesses, sharing stories, pivotal people, moments. I’m your host Didi D’Errico 90% of small businesses today do not offer a retirement solution. So it’s no wonder employees are looking to find spinal advice somewhere. Even if they’re not ready to think about retirement at all, as businesses of all sizes review how they can attract and keep people heading into the new year, it might be a good time to give financial wellness a fresh.

Betterment is an investing and savings app that serves one purpose to help individuals do more with their paychecks. Kristen Carlisle, General Manager at Betterment, is passionate about her role in helping small business employers consider cost-effective ways to deliver financial wellness for their employees.

For Kristen, this is more than just a job. It’s a mission she’s been passionate about for a long time. 

Kristen I havve firmly believed that our country has not done a fantastic job in terms of enabling its citizens and preparing people for huge events like retirement. And it’s so often that we put it on the back burner because it’s so far in the future.

And I think that the marriage of education and technology, something that betterment does really well. Is where we’re going to really bridge that gap and get more people ready for their futures and thinking about it more consistently in a less intimidating way. So I’m really motivated. Small businesses are busy, right?

They have a lot going on. They’re doing a lot. They’re usually leanly staffed. They have big aspirations and offering benefits can be overwhelming or difficult. But really what we know is oftentimes people’s first entry point to thinking about their finances beyond their checkings or savings or their paycheck to paycheck. Is the 401k and that is gate kept by employers. And a lot of times they’re looking to employers for guidance and for help. And so, you know, small businesses are faced with this desire and the need on the employee side, especially from a retention and talent attraction standpoint. But traditionally it difficulty in adopting benefits because they don’t have huge staff to administer them.

And because of costs, which they’re thinking about all the time, 

Didi: With that in mind, let’s dig into specifics on financial wellness, starting with the unconventional approach. The betterment is known for 

Kristen Betterman. The score was started to address this problem because people have traditionally been iced out of financial advice.

It has felt like something that was only in bailable to wealthier or more seasoned investors, more complicated investments. Right. But through the democratization of financial planning tools and advice through a lot of FinTech companies, people at every income level are getting access to holistic and personalized advice.

That’s the most important piece of it. It’s not just getting access to technology that throws you into sort of the same fund selection as everyone else. It’s technology. That’s actually helping guide individually. Based on what they tell us, when do they want to retire? How do they want to retire? Where would they like that retirement to be is all personalized details that inform and decide the advice that is given and at better.

That’s exactly what our advice and our platform is built off of. It’s from the moment that you actually come in, the first time you interact, our technology starts to ask you some questions and guide you through how to invest. And when we can make assumptions, we make those assumptions for you. So we take that guesswork out of it for you assumptions, like what’s happening with social security, what we expect to be available to you at the time that you’re going to retire based on the age you are.

That means that people get access to the right type of guidance for them in a much more streamlined and easy to understand fashion taking that guesswork out of them. We also know that technology doesn’t answer everything and that finances are really personal and. It’s kind of always going to be this coupling of technology, as well as, you know, being able to talk to people.

One-on-one a lot of people just want reassurance they’re on the right track. They want to just talk to someone and have that guidance on a, on a human level. And so it’s a combo of the tech and the people and here at betterment for business, we do have both right. People that are CFPs on staff to talk you through those scarier moments or to maybe help just reassure you you’re on the right track.

But really we’ve seen across the board, just technology, taking this to a whole new level and really making it accessible no matter what your income is, no matter what your investment goals. 

Didi: For your millennials after their parents, the first place they go to ask about financial advice is you their boss.

And so let’s talk a little bit about, you know, what small businesses have done to help their people in terms of retirement and financial planning. And is it mostly 401k programs and who can afford those? 

Kristen Small businesses haven’t really been entering the conversation until recently. So, you know, an interesting stat is that small businesses out of them, 90% don’t offer a retirement solution today.

And that’s, you know, thinking about companies that employ about 500 or less employees yet they employ 47% of Americans. And so when you think about that, it’s really showing that. Employees are actually looking to their employers and seven out of 10 employees actually believe that it’s their employer’s responsibility to make sure that they’re set up for financial success.

And so we’re talking about the fact that the narrative around 401k has also changed. It’s no longer a luxury it’s becoming a baseline benefit. Well, you know, what we’re seeing happen in the market is really interesting, you know, small businesses. It’s not that they don’t want to offer a retirement solution.

It’s not like they don’t want to actually set up their employees for success, but it’s been difficult, right? It’s been a difficult process for them because of the administration, the cost who can afford these, what we’ve seen happen at the legislative level has been really exciting. If you’re a nerd like me and you follow the legislation.

Because it’s all in the, in the name of getting small businesses to be able to adopt benefits programs that help their employees. And I’m talking really specifically about certain states offering state mandated plans that are, you know, the state sponsored IRA programming. This is just even going so far as to help educate people about what type of retirement benefits solutions they can offer as well as offering tax incentives.

So we saw through the secure act that more and more there’s tax benefits. To small businesses in particular, if you start to adopt and provide a 401k. And so all of this movement is helping to lower that barrier and ensure that Americans, the end of the day, the vast majority who are employed at these small businesses are getting access to these types of products.

So let’s 

Didi: talk a little bit about, you said 90% of small businesses do not offer 401ks today. And you were just talking about the nerd excitement level of, I think there’s 13 and counting states that are, are starting to try to implement programs to make it easier for them. Have you seen that start to impact how small businesses might be stepping up to, uh, to help out with, with IRAs?

And do you think it’s that or do you think. The great resignation or is it a confluence of the two that are really making a difference in changing the scenario for those 47% of employment companies in the UK? 

Kristen It’s absolutely a great confluence of all of these things kind of coming together. I will say we had seen personally at betterment, a huge jump in the adoption of 401ks over the past year, sort of prior to the groundswell of the great resignation though.

I think it was, it was on the horizon and it was on people’s mind, but. Really, we started to see the jump with the state mandated plans and new plan adoption has been up 370% year over year. And that’s really coming from small businesses with 50 or fewer employees who are really thinking about it in these states in particular, to just continuing to make.

Uh, known that there are programs available, what those programs could be helping people understand the differences between retirement benefit solutions for small businesses. But we absolutely also see that the great resignation is having effect on, on the market. So many people are looking for jobs elsewhere, and employers are trying to.

All the SOPs to hire and retain talent. And when you think about being a small business, you lose one person and that’s a huge impact to your bottom line versus a company that employs thousands and loses a few people. And so offering great benefits is one way. To ensure that you can continue to show your employees, you care about them, you care about their financial wellbeing.

You can incentivize them. They view it as part of their compensation package and it, and it’s all something that goes towards sort of that retention and growth of your talent base. But again, you know, it’s, it’s exciting to see, and there’s still a long way to go in terms of education of the. So we’ve really 

Didi: focused so far on the small business themselves in terms of their ability to pay for and help fund 401ks in an effort to, you know, to stay stable and to keep more of their staff and, and send their staff and be looked upon as a better employer of choice.

But you know, what about the employees themselves? So, you know, the founder of your company talks about the retirement crisis in America, wherever. It’s expected to save for their own repo retirement. And yet a third of us workers. save less than 5% of their income. So how does that work out?

And even though we’ve seen a few reports during COVID that some people are saving more than ever. How does that balance out and is. 

Kristen You know, there really is a story of, of two different experiences in the, in the wake of the pandemic. And there’s those, as you said, who have been saving now more than they ever were.

And then there are those that are dealing with either the loss of their job, loss of steady income spouse. Who’s, who’s maybe taking a step back from work and have been facing. Potentially huge medical bills as a result of, of what’s been going on. And so they’re struggling significantly. And, and for the former, obviously they’re in a better position and it’s great to see people who are taking their savings and thinking about how to save in more strategic ways.

However, there are still quite a number of people who aren’t able to save much for retirement or save much at all. And on top of this, this. An increasing level of uncertainty around the future of things like social security and whether people will be able to rely on that as a stream of income in the next even 10 years.

Right? So as such, it’s just, it’s important for employers to understand that this is a dynamic that is going on and especially small businesses, because this is the workforce that tends to be hit the hardest with a lot of these nuances. They have a responsibility to really set their employees up for success, through things like programming through things like having conversations with them about this and being open to have the dialogue.

You know, you talked about millennials looking to their employers and the, and that may be being a total. Different change and shift in the perception of how we talk about these things at work and, and that’s happening. And so it’s important for not only small business owners to to think about this, but talk to their employees about what they need.

And even if you know, employees can’t afford to put more than even just 1%. $10 any amount into their, into their funds. It’s a cumulative power, right? There’s compounding interest, every small amount counts. And eventually when you start to put small amounts in, you’re thinking about it, you’re paying attention to it and you can continue to think about it and pay attention to it.

It’s really not an all or none. It really can be step change, iterative change, and you can build on it over time. And so that’s sort of my biggest encouragement to both employers and employees. 

Didi: So that’s a great cue up kind of to my next question. So retirement is one piece of the puzzle to maximize your paycheck, which is sort of how we started this conversation, but there’s all whole world of other things that maybe you need to kind of build a financial muscle around like shorter term focused savings to pay off college loans or home ownership or taxes are small businesses doing something to help here, or how should they in their employees and, and, and people in general be thinking about that.

Kristen So I’ll tackle first on the, on the people side of things. You know, we at betterment believe in a holistic financial wellness approach. We don’t believe in just sort of siloing all of your finances because they all are intermingled. And I think today, You know, finances have been really siloed and the way people think about them, you know, you sort of have your 401k over a year.

Maybe you’re dealing with loans over here. And, and so we sort of have been thinking about at the core offering of retirement planning and investing in. Should sit alongside things like student debt, repayment, tax optimization programs in the aftermath of the pandemic. This only became more apparent, especially because small businesses are beginning to improve the benefits that they’re offering to help retain employees as people are, you know, having a mass exit as they’re leaving their jobs.

And there’s also an ask bubbling up for me. What else there’s the 401k, but what else could I be offering to my employees? And first and foremost, we, we believe that a lot of that starts at the 401k or a retirement program. That’s high quality and matches the needs of your employees. Thinking about things like a match program.

If you’re an employee and you have a match program and you’re not taking advantage of that, that’s. That’s on the table and for an employer, when we talk about retention and the great resignation vesting match is a great way to start thinking about retention for your employee base. But there’s more than that.

And we know that. And some of the other things that we’ve seen is just now this bubbling up, particularly in a market, a small market where they’re asking about programs that may have only been available. If you were, you know, sort of, uh, a fortune 500 organization. About things like five to nine matching program, right.

Matching to pay for college pre-tax and allowing in place to save for that student loan, financial assistance or guidance. And then most commonly really recently is employer sponsored emergency funds so that people don’t have to dip into their 401k as an employer. We’re hearing a lot of that and that’s coming from.

It’s all coming from the bottoms up, employees are starting to think about these things and pay attention to them. And my biggest, you know, sort of piece of advice from an employee perspective is definitely think about these things cohesively as a picture, right there. All tell the story of your future for today, tomorrow.

And long-term and keep asking questions of your employer and for employers, start to think about how you can bring these programs to life. And again, just the way we saw technology really move things forward for the 401k. I think we’re on the precipice of seeing that happen in a bigger way, across the greater landscape of financial benefit.

Didi: So we talk a little bit here about kind of competitive differentiation. You’re trying to keep your people happy and staying with your organization. What can a small business best do to answer the question? What’s the best thing to do with my 

Kristen money. This is a common question. And I am sure as an employer, when you’re, you know, millennial employee or whoever comes to you and ask this question, it can be a little overwhelming, but you know, a better immense 401k business.

What we really firmly believe in is a very simple 50, 30, 20 rule where a 50% should go towards necessities, rent bills, groceries that. Expenditure and 30% should really go towards savings and retirement, and then 20% of your income towards what you want. And that can be anything around entertainment or just ways to be able to enjoy our money in the now.

But that just is really what sets you up. And it’s, you know, it’s always important if you’re dealing with debt to priority. Debt and paying down that debt and saving to avoid those penalties. And then from there building up things like emergency funds that you can rely on and thinking about, you know, it’s critical in case of unexpected accidents or a loss of jobs.

Home repairs, medical expenses, to be able to have that safety net available to you for small businesses, being able to give your employees not only a paycheck, but like ho how to leverage that paycheck is actually really becoming more and more to the forefront, right? Optimizing the various aspects of your financial lives and understanding it.

And. Vary, depending on who you’re in play basis, how old they are, where they’re living, what they want to accomplish, what they’re dealing with. And again, sort of speaks to talking to them and understanding these. for listeners who are trying to build better retention and better financial literacy and leverage for their people, what are some ideas of where they might want to get started?

Didi: And maybe, maybe you’re in one of the 13 states and growing that you’re going to have to, whether you want to or not, but maybe not. So what are, what are some of the things you, you just want to 

Kristen be thinking about? Even if you’re in one of those states, right. It’s important to always be thinking about this.

And you know, what I would say is there’s sorta like no one trick right. Way to think about your employee base. But some suggestions that we have is just first and foremost, set up some regular meetings with a financial advisor so that people’s questions or concerns can be asked by a professional and they can get some.

And that can be done sort of in a, and you can get access through whoever you potentially partner with here at betterment, we do things like participant webinars for individuals, so that they can get access to a certified financial planner. We also offer access to certified financial planners. If employees want to opt into that, um, you know, it’s, it’s just a way to get the conversation going and get them to start thinking about it, in similar.

You can continue to have ongoing communication with employees, remind them about benefits that you offer. It’s, it’s really easy to sort of onboard someone and say, and do you have a 401k and then sort of never talk about it again. And then it will be really easy for someone to forget about it or, you know, I’ll get to it when I get to it.

Send an email every quarter, guess what? We have a 401k, are you taking advantage of it and remind them your record keeper or whoever you partner with on, on your retirement benefits basis should also be doing that. But a lot of times we know that employers have the greatest impact on their employees taking action.

They’re looking to you. They want to hear it from you, you know, host recurring financial Q, and a. Get their questions, hear what they’re dealing with, understand what’s happening. A lot of times as an employer, you’re going to hear from the loud masses. You’re not always going to hear from the quiet voices.

And so, you know, you have to kind of seek them out and understand like, is this what addresses the needs of my employees? Or is this address the need of maybe some of the noisy few and then. We always say this, and I think this is real pay attention to compensation. What are, what are people paying in the market for the jobs that you have?

Are you paying fairly use salary benchmarking services to understand that work on your network, think about tools like glass door, or get an idea of what’s happening, especially as you think about your employee base, becoming more dispersed right now, living in different areas. And maybe you are dealing with a whole new roles that you.

To bring into your organization, just understand what is, what does it look like? What do compensation packages look like? And that goes beyond just your paycheck is as your take home pay. It’s also your bonuses, promotions, any sort of benefits that you offer, like a 401k match stock options, and really look at the whole incentivization for your employees.

And then again, I’m always going to say this provide amazing benefits, right? Beyond pay. People are looking at things like, do you have a 401k match? Do you have a 401k? And it really is becoming baseline to have some type of benefit offering for your employees, as well as, you know, strong health insurance plans, time off and all of those go a very long way to employee satisfaction.

Didi: Any tips on how to start the conversation that your replaced, if you haven’t done it before. And you’re a little nervous about. 

Kristen It can be very overwhelming. I’m very understanding of that. I think first and foremost is just trying and remember that it’s iterative and you can have this conversation a few times, but the first thing that you should do is just come prepared with some facts and some numbers.

If you don’t personally have a 401k plan, maybe start doing a little research and understanding about it. There’s plenty of employee benefits research out there. Zenefits absolutely has a lot of materials and resources in this regard that. Pros and cons of offering some of, some different types of programming for your employees.

And just start, start talking to them about it and start asking questions. Right? The majority of participants, and I think it was 51% said they’re very unlikely to accept a job that doesn’t offer benefits. So they probably want to have this conversation with you. So just. That talks about having that conversation with, with your employees, but also with, you know, people who you need to convince that this is worthwhile, come to them and talk to them about why it’s worthwhile.

Right. We know that we’ve seen around 28% of people say that they’ve left a job because of poor benefits packages. So there’s a lot out there, a lot of materials that you could be doing to not only talk about. People at your company who you need to convince that this is important, as well as understand from your employees.

Just ask them questions, see what they, what they are interested in, and really have that point of view from them that only helps crystallize what you choose as your offering. Kristen. And one 

Didi: last question. What are you most optimistic about when it comes to people doing more with what 

Kristen they. It’s a great question.

I’m optimistic about a lot, but I think what we’ve seen over the last even few short years is that the 401k space, the retirement benefits space has completely revolutionized with technology. And that is only going to speed up. And we are only going to see more and more resourcing. To the hands of employees because of how easy technology is making it for employers to administer it.

And so it’s no longer going to be that it’s large companies, you know, sort of these fortune 500,000 employee companies that can have access to world-class benefits that can really support the needs of your employees. I think we’re going to see a huge change in what’s going to become available to small business owners that really allows them to attract, retain, grow the talent and continue to really be the backbone of employers in this country.

Didi: I’m Didi this was PIVOT, a POPS! show. If you want to learn more about inspiring people, operations stories, like Kristen’s checkout,, where you’ll find bonus resources, profiles, and even a link to order our new book, People Operations. Also, if you have questions you want us to answer on our show, check out the link in our show notes below and we’ll get it covered.


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