Alex, could you please provide our audience with a brief overview of your professional journey leading up to your current role as co-founder and chief revenue officer at Clair?

After majoring in Economics in college and getting my M.B.A., I started my career at Deloitte, working in Mergers & Acquisitions for finance companies including Mastercard and American Express. While I was working there in New York, I met my Clair co-founder, Nico Simko. Both of us are immigrants from Switzerland and when Nico first came to the U.S., he had an hourly job where he was eagerly awaiting his paycheck every two weeks – this sparked the inspiration for Clair.

We both studied economics and have passions for fintech, so we talked a lot about the struggles that front-line workers face due to the unforgiving American credit score system and lack of affordable financial services. As a result, 2/3 of the U.S. workforce is living paycheck-to-paycheck. We wanted to create a better bank for these workers because we think they deserve the tools they need to build wealth, especially since they’re underserved by big banks. So we founded Clair in 2019 and have been growing the business together since then, with Nico as CEO and me in the Chief Revenue Officer role. Clair is the only fintech company that offers completely free wage advances coupled with better banking services than most Americans have today.

Meanwhile, companies that are desperate to ensure they’re fully staffed amid the front-line labor shortage are looking for new ways to attract and retain workers, and many of them are doing this by offering new financial wellness benefits. With workers demanding more flexibility in when and where they work, they also want more flexibility in when and how they get paid, so Clair is an attractive perk. Instead of using credit scores, we connect Clair customers’ accounts directly to their employers’ payrolls. All accounts are FDIC-insured and supported by our partnerships with national bank Pathward and Mastercard.

As we anticipate the year 2024, could you kindly share your predictions regarding financial wellness benefits and their anticipated impact on the workforce?

The continuing worker shortage in industries like healthcare and construction in 2023 made more companies realize they need to offer unique and flexible employee benefits to attract and keep employees. With benefits like paid time off and health insurance quickly becoming table stakes, and financial stability becoming more important than ever in a fluctuating economy, demand for financial wellness benefits has been increasing. More than 40% of workers said recently that financial wellness benefits have become more important for companies to offer in just the past year.

As a result, we saw more companies expanding into benefits offerings like emergency savings accounts, student loan repayment assistance, and financial counseling services in 2023. Clair is part of this trend and we’ve found that employees who use Clair pick up 15% more shifts and stay with employers for 25% longer than workers who don’t use it. We expect financial wellness benefits to be even more popular throughout 2024 and until the worker shortage crisis is resolved.

In your esteemed opinion, how can employers play a pivotal role in assisting workers in improving their financial wellness, and could you share any strategies you’ve found particularly effective?

More than 2/3 of workers think employers are responsible for employees’ financial wellness, so companies have an opportunity to play a pivotal role in this area, especially as we navigate a tougher economic environment. While this is typically best exemplified by bringing better health insurance rates to their staffs, employers should also look at providing financial services, if they don’t already. For example, front-line workers work mostly in shifts, meaning their earnings fluctuate a lot as the number of hours they work may change week to week. By introducing on-demand pay, employers are improving access to employees’ liquidity, which allows them to keep their heads above water when faced with bills and

emergencies. Furthermore, connecting employees’ bank accounts to their paychecks and sharing HR data confidentially with social impact-focused providers like Clair means they can smooth out their budgets and make better financial decisions.

Any offerings that help workers gain financial literacy or guidance, since these aren’t necessarily skills that people learn in school, can be really valuable. Offerings like retirement plans, emergency savings accounts, student loan repayment assistance, and the ability to use pre-tax dollars for things like childcare can also really help struggling workers. I like to use 401Ks as a great example of a financial wellness benefit that will always be better for your employees.

With the rise of embedded finance, how do you envision it influencing HR technology, and what implications might this have for businesses and their employees?

Embedded finance in HR platforms is a win-win for everyone. Fintech has been converging with HR tech more than ever with the rise of embedded finance and this will only increase in the coming years. It makes things easier for employees and the HR and finance teams who are managing all the different processes and tools, which means more efficiency and productivity. For instance, Clair is integrated into more than a dozen HR platforms, including TriNet, Gusto Embedded, When I Work, and 7shifts. Even if they don’t use one of our HR platform partners, we have an easy solution for businesses to integrate Clair for Employers with their payroll and scheduling providers, at no cost to them or their employees.

While any worthwhile benefit option does require some upfront work to launch successfully, HR teams don’t want to choose one that increases their workloads on an ongoing basis. With that in mind, it’s important to make sure all employee customer support is handled by the embedded finance provider and there is no interference with payroll reconciliation or other key HR processes.

What key considerations should HR professionals keep in mind regarding on-demand pay compliance, and how might technology assist in ensuring compliance in this area?

It’s crucial for HR teams to ensure that any on-demand pay providers or other financial wellness companies are compliant. Other earned wage access (EWA) companies in the fintech space operate outside of proper compliance or oversight, leading to consumers paying interest rates of 300% APR for on-demand pay. Clair is backed by a national bank and we’ve prioritized compliance with existing lending regulations from the beginning. That means our customers and their employers can rest easy knowing that new EWA regulations won’t ever interrupt access to their accounts. It might sound obvious but you’d be surprised how many fintech companies embed with large employers, only to have regulators then change the laws and therefore make the benefit illegal.

It’s also important to make sure the benefit provider that you’re working with is knowledgeable in the regulation space and they’re prepared for changes in state legislation. Several states, including California, Missouri, Nevada, and Connecticut, have recently proposed or adopted new EWA regulations. We believe many more states will follow in their footsteps in the years to come, so my co-founder Nico often travels to Washington, D.C. and around the country to meet with legislators about EWA regulation.

Could you kindly elaborate on how HR technology contributes to employee engagement and retention and what role you foresee it playing in shaping the future of the workplace?

It’s the HR team’s mission to understand the needs of their workforce, and to allocate budgets towards technology that allow employees to show up to work feeling safe, stable and focused. If an employee is constantly worried about paying their bills or they have to waste time trying to figure out how to use a clunky app to access their pay, they can’t do their best work. We’ve seen the power of HR tech in action as businesses that partner with Clair have boosted employee morale and increased retention, productivity, and filled shifts.

On a personal note, we are interested in learning about any strategies or routines you find most effective in maintaining your own financial wellness and professional balance.

I typically recommend the “50-30-20 rule” for budgeting – our educational features in the Clair product recommend it and I find it to be effective for my own financial wellness, as well. It entails dedicating 50% of your pay towards essentials, 30% to your “wants,” and 20% towards savings for sufficient liquidity.

Another strategy is avoiding spending with credit cards and “buy now, pay later” (BNPL) services. While they can be helpful for some, they can also result in high interest fees if you rack up debt. It’s important to make sure you have a clear understanding of how your available and outstanding balances match with each other before using alternative credit.

Given your wealth of experience, what personal advice would you offer to our readers who are striving for improved financial wellness and success in the dynamic field of HR technology?

For those involved in implementing HR technology for their employees, the first step I always advise is to listen to your employee’s needs. Every team is different, but by providing a range of tools to help receive on-demand pay and to set up better financial habits and savings practices, your organization will be moving in the right direction.

Considering your extensive expertise, are there any additional insights or recommendations you would like to share on the broader topic of financial wellness within organizations?

By implementing the option of a financial wellness program, employees can have a source of education and employers can drastically change the costs of accessing capital for their team The option to decrease an employee’s annual expense towards bank and credit card fees by 5-10% can create incredible differences to a person’s financial status.

To conclude, we would be grateful to hear any final thoughts or key takeaways you would like our audience to remember from our discussion on financial wellness, HR tech, and employee engagement.

As the economy cools off and the front-line job market stays strong, consumer savings are still low. Employers are already struggling to meet wage demand, which means they’ll need to get even more creative with new ways to add value and help employees get more out of their pay. That’s where financial wellness benefits can add a ton of value. Our mission at Clair is to be a trusted, free resource for your leadership team to engage with employees and move everyone towards a year of financial wellness.

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