Deanna Shimota 00:00:05 Welcome to the HR Tech Spotlight podcast. I'm Deanna Shimota, CEO of GrowthMode Marketing. The HR technology market is crowded, and we know it can be hard to find the best software solutions for your business in the sea of sameness. On this podcast, we shine a spotlight on some of the best up and coming technology options out there. Check it out if you are interested in learning about new, innovative solutions available in the market. And if you are with an HR tech company and interested in being considered for a guest spot. Stay tuned for details at the end of the show.
Deanna Shimota 00:00:46 Hello and welcome back! After a short recording hiatus to bring you more innovative HR technology solutions on the show, in this episode, we are shining the spotlight on Candidly, an AI driven student debt and savings optimization platform that addresses the full lifecycle of education expenses and empowers employees to make simultaneous progress on paying down their student debt and building wealth. Here to talk about the company and the platform is Laurel Taylor, co-founder and CEO of Candidly.
Deanna Shimota 00:01:18 Hi, Laurel. It's great to have you on the show today.
Laurel Taylor 00:01:21 Hi, Deanna. Great to see you. Thanks for having me. Yeah.
Deanna Shimota 00:01:25 Of course, of course. So, Laurel, tell us about your background in the HR tech space.
Laurel Taylor 00:01:31 Yes, Deanna. Well, I never thought that I would be in the HR tech space. HR tech found me as a result of leaving the problem that we solve. So I had a ton of student debt. I, between my mom and I missed out on two decades of compound interest on wealth while paying down debt. And the data show we are not unique. That's what over 80% of those with student debt do is a first pay down their debt and then they save for the future. And so as I thought about the best way to tackle the student debt and savings retirement savings crisis, I was leading a global business unit for Google and realized that I did not want to go direct to consumer because that is a very, very expensive proposition.
Laurel Taylor 00:02:18 And actually, the most intuitive channel was to go to market through employers. And the big bet that I made at the time, beyond the digital experience, which is obvious that was needed, was that policy levers would be pulled to incentivize employers to offer solutions within the workplace right alongside their four-week plan, right alongside their tuition reimbursement plan. And so I decided to go to go to market, partnering with employers and helping them distribute benefits that address the full, spectrum of wellness within the workplace.
Deanna Shimota 00:02:52 Let's talk a bit more about the regulatory piece of it. Obviously, Student loan debt is a lot bigger than it used to be. I mean, you know, I know when I went to college, the cost then versus fast forward 25 years is significantly different, and a lot of people are coming out of college with more debt than the job they're coming into. Right? Like from a regulation standpoint, from a candidate standpoint, you know, tell us a little bit about that and what employers need to think about.
Laurel Taylor 00:03:26 So we have it's a great it's a great question because it's a it's a complex it's a complex answer in that there is so much going on in the world of, in the landscape of student debt and education financing. So let's talk about the challenges and then let's talk about the opportunities. The past four years have truly been historic in terms of complexity around student debt. We were in a moratorium on student loan payments. I was extended eight times over a three-and-a-half-year period. We then moved into a period called the onramp. So last October of last year, 43 million Americans had to start paying down their student debt after a three-and-a-half-year kind of payment holiday. We're right in the middle October. During this onramp period, the servicers were not reporting lack of payment to the bureaus starting in October. the servicers will start reporting lack of payment. And so unfortunately, what that means with the highest non repayment, status in really the history of student loans is that we're likely to come into heavy periods of delinquency and default about six months from now.
Laurel Taylor 00:04:46 So what we see when workers come into the Candidly platform and speak with our coaches, the four common sentiments are fear, dread, worry and confusion. They really do not know what the heck is going on with their student loans, and they need to pay them. Do they not need to pay them? Is the save program which Biden, which Biden introduced? Is that viable? Are they processing applications or people being put into forbearance? When will we know about the save income driven repayment program? There have been multiple waivers on the public service loan forgiveness and deadlines over the past year to submit. I mean, it's just really, really complex. And so what we're seeing is, in addition to difficulty navigating, really reengaging and paying down debt, we're hearing the that the majority of borrowers are pulling back on things like groceries. So we're starting to really see food insecurity, you know, when you haven't paid $353 to Dollars to $800 a month for three and a half years, and all of a sudden you have to find that in your budget.
Laurel Taylor 00:05:56 Again, it's really difficult. Now, fortunately, there are federal programs that can help lower monthly payments commensurate with income. Some of those programs, like Save, are being challenged, but others are still available. So that's you know, part of what we do is help workers very quickly navigate that ambiguity and receive guidance so they can make informed choices. On the positive side. since March of 2020, the CARES act was introduced and extended, and now there is a permanent extension that has bipartisan support as well, which helps employers leverage their tuition reimbursement budget, which is called their section 127 plan, and use the same exact budget, which is $5,250 annually. That budget can be used to upskill, so future education, current education or prior. So we have facilitated over $80 million of employer contributions to help employees pay down their student debt. And that's tax free, to the employee and tax advantage for the employer. The second at bat for employers to really introduce benefits that address student debt within the workplace with advantageous tax treatment is called the secure 2.0, which is setting every community up for retirement.
Laurel Taylor 00:07:21 Secure 2.0 enables employers who are offering a retirement match to make that retirement match more accessible and inclusive, so those who have student debt are largely on the sidelines of retirement savings. The perception, or the reality, is that population within the workplace doesn't feel or cannot afford to lower their income and lower their cash flow for a future, event. Retirement. And so security 2.0 enables employers to offer a retirement match for employees who are paying down their student loans. So while employees are doing what they have to do, which is pay their student loans, they are now, you know, rather than student debt being a blocker, it's literally becoming a booster. for the majority of Americans, their first time to receive a retirement matches as a result of secure 2.0, which is truly transformative as we think about half of all American households having zero in retirement savings and student debt being the number one, cited reason for employees to not participate in those plans.
Deanna Shimota 00:08:33 That's really interesting. And obviously it's a lot more complex than it seems on the surface, right.
Deanna Shimota 00:08:39 With everything that's happened in the last few years. And you bring up a really good point. You know, younger generations don't always save for retirement because they are having to pay back really high student loans and, you know, all the other things that come with life and becoming an adult for the first time, right?
Laurel Taylor 00:08:57 Right, right. And, you know, when we look at the data, what we see is that student debt is age and wage agnostic. So when we think about student debt, it's one of my least favorite terms because it's actually mom debt. It's dad debt. It's spousal debt. It's grandparent debt. What we see in the workplace when we pull the data is that the highest outstanding balance, from tech employers to healthcare caregivers, the highest outstanding balance is largely those over the age of 50, because they're taking on Parent Plus loans, or co-signers $97,500. This is the average outstanding balance that we're seeing for those over the age of 50. And so to your point, in the beginning, when compound interest works, its greatest magic, your first ten years out of school and in the workplace for Forgoing compound interest on wealth to pay down debt is devastating, and so secure 2.0 helps employees while they're paying down their debt, get that retirement savings match that that employer is offering and wants that younger generation in the workplace to value and to benefit from.
Laurel Taylor 00:10:07 And then you think about the last ten years before retiring, which is counterintuitive. But many of these parents and grandparents paying down student debt, whether it's their own or for the next generation is, again, the last ten years that that that boomers have an opportunity to save before retiring. So it's a you know, it's a really exciting opportunity to. And what we see is if, for example, let's talk about that younger generation, the enter the workplace. They're paying down their debt. They get a retirement savings match. Let's imagine that they only get a retirement savings match for 50% of the time they're paying down their debt five zero. Let's imagine that individual never contributes to their retirement savings plan, so they are only getting the match through a ten-year period. When they're paying down their student loans, that worker will have an average of $450,000 at the time of retirement. That's four times what boomers have today in retirement savings. Wow.
Deanna Shimota 00:11:13 That's great. So tell us, Laurel, how is Candidly different from the other similar platforms out there that employers can look at to support, you know, paying down student debt for their employees?
Laurel Taylor 00:11:26 Sure.
Laurel Taylor 00:11:27 Yes. So Candidly, is the only platform strategy available in the market that addresses the full lifecycle of education financing. And so we are really known for is our excellence in helping employees who already have student debt manage and pay down their debt. And we've generated $1.8 billion of impact for the users and the workers that we serve today. We've gone well beyond managing and paying down student debt, really as a result of customer customer feedback. So employers and plan sponsors shared with us that, yes, they want to help their employees who already have student debt become debt free. And they really want to help families that are preparing for planning and paying for college in the front end of that journey. So about 45% of the workplace are parents who have children under the age of 18. So there's a very large cohort of workers and employees, whether they just had a child and they're thinking about 529 plans to they're ready to send their kids to college, and they're thinking about scholarships and grants and how to even think about different colleges and what the ROI is around colleges and coaching.
Laurel Taylor 00:12:47 And so we enable that planning. Preparing and paying for student debt with coaching in that college planning, coaching around student debt as well as the full digital experience. And then our one of our newest releases is emergency savings again based on employer ask of employers really want to address the full spectrum of wellness or lack thereof within the workplace. There's broad recognition that 60% don't have $1,000, for an emergency. And so an emergency savings, offering that helps employees tuck away for a rainy day from payroll. And then finally, with secure 2.0, we're right in the middle of the retirement plan. Given that the that 70% of graduates are graduating with student debt and entering the workplace, and we do offer also a retirement plan assessment so that employers, whether at 70 or 80 or 90%, can really understand who is taking advantage of their benefits offering and who's on the sidelines. And it's no surprise it's women and people of color who are traditionally outside of, benefiting from the benefits that are being offered.
Deanna Shimota 00:14:06 What type of companies.
Deanna Shimota 00:14:08 Would you say are the perfect fit to work with Candidly?
Laurel Taylor 00:14:12 So we work with companies of all sizes. Our average employer today has 22,500 employees. And so, as you know, in this space that's called the Mega Jumbo Ultra Size Plan sponsor community, which is really exciting. Had you asked me that question a year and a half ago, I would have said our average employee size was about 2000 employees. So that's really a symptom of demand. Large employers. This is a top three requested benefit across all sizes of employers. Employers. Also, in terms of how Candidly serves employers, it's highly variable. So some employers are really looking for a digital tool and experience to help them manage their student debt, lower their monthly payment commensurate with income, and help plan on the front end of the journey. Other employers want to offer student loan repayment. That's tax advantage to up to 5250. Others want to offer the secure 2.0 retirement match on student loans. Many employers want to get started on an easy onramp and then layer in contributions later.
Laurel Taylor 00:15:19 So we are serving we're the dominant category leader. we work with employers directly, but we also primarily go to market through the ecosystem already serving the employer. So our partners are firms such as Empower and Lincoln Financial Group, One America, PNC Vanguard, TIAA, New York Life, Guild, Education, Milliman, and so as you think, you and several others I'm not yet able to announce. But as you think about the landscape and the ecosystem serving employers, we really want the employer to be able to offer Candidly to their employees and whatever method makes the most sense for them. So anywhere that employer looks, if they want to work with us directly, if they want to work as through their 41K43B provider, if they want to work with us through their tuition reimbursement, tuition assistance provider through their life insurance provider or group insurance, we are everywhere to make it easy for that employer to adopt and deploy.
Deanna Shimota 00:16:28 So of the employers that do work with Candidly today, whether directly or through one of the partners, what impact have you seen organizations have and like their experience working with Candidly.
Laurel Taylor 00:16:41 Yes. Thank you. Great question. So we are in PES scores from an implementation and onboarding perspective are above 80, which is unheard of with really 40 NPS scores of 40 being the benchmark. When we think about impact, we measure impact in days in dollar shaved off of debt. We talked about the $1.8 billion of impact that we offer. When employers think about impact, they think about that from a number of dimensions. One is the financial wellness of their employees. And Candidly, is not only yes, we have content, but Candidly offers a heavy bias to action where there's a personalized option that is presented. We believe in micro actions and transactions to transform outcomes, so these are hard, quantifiable outcomes. They received a retirement match. They received a contribution. They lowered their payment by $453 a month. These are these are hard, quantifiable, dollars that we're measuring in terms of impact to employees. The number one problem employers are solving is acquisition and retention of talent. And so when we look at the efficacy of the benefit of offering student debt benefits and solutions and that full lifecycle, what we see for employers offering a contribution is a 76% reduction in turnover.
Laurel Taylor 00:18:10 And this is actually in the health care vertical. We're measuring the most difficult vertical with the greatest level of hypermobility. And we are seeing a 76% reduction in turnover when that employer helps that employee pay down their debt in a tax free way. for employers offering public service loan forgiveness or Candidly, it's a 56% reduction in turnover A our tools with no contribution. It's a 33% reduction in turnover. the retirement match on student loans is a bit too early to measure the impact on acquisition and retention, but intuitively, we know it'll fall somewhere between 40% to 76%, which we think is going to be toward the upper end, because this is a population that has typically, not been able to benefit from receiving that free money from their employer. So, you know, CFOs love us because the benefit pays for itself many, many times over on the actual outcomes that we are generating, both for the employer as well as for employees.
Deanna Shimota 00:19:22 That makes sense. Obviously, you've seen some great results from organizations that you've worked with.
Deanna Shimota 00:19:27 Yeah. What is your vision? Laurel. for Candidly, in the future?
Laurel Taylor 00:19:36 So my vision is multifold. Number one, as we think about the overall impact today, we've been measuring days and dollars off of debt, $1.8 billion of impact. For the first time this year. We had a KPI on wealth generation so secure 2.01 effect went into effect on one 124. And as we look to the amount of wealth, wealth is not just for the wealthy. Wealthy is truly wealth is now truly available for everyone with secure 2.0. If you offer a contribution to emergency savings so you can get a retirement match. If you're paying down your student loan, you can get a retirement match. If you're deferring into the plan, you can get a retirement match, because some are participating but not maximizing and they can top off with their student loan payments. We are focused on generating $1 trillion in wealth within the next 30 years because of the magic of compound interest on wealth as we get new participants into plan first time and first time.
Laurel Taylor 00:20:42 Maximizers. So it's not just thinking about the impact we can make in the next 3 to 5 years. The purpose of the company is to create financial freedom, and really, we will be able to measure and grade ourselves on our ability to do that as an ecosystem 30 years from now, which is, you know, a little wild, but also really exciting.
Deanna Shimota 00:21:10 Yeah, that is pretty cool. As we close out this conversation, Laurel, what final thoughts do you want to leave our audience with.
Laurel Taylor 00:21:17 The final thought. So what I would love to leave the audience with is the offer to provide a complimentary retirement plan assessment. Even if you're at 90% and you think you're nailing it. What we have found is that employers were surprised by the story in their own data. That just really has, not benefited from the level of analysis that we can provide in terms of who's in plan, who's out of plan, what does that look like by age and wage? And to even if you have no budget for a contribution, that there are really powerful ways that you can get started that help your employees manage the number one stress they're experiencing in the workplace today, which is that full life cycle of education financing.
Deanna Shimota 00:22:10 Excellent. So where can our listeners go to learn more about Candidly and request that free audit?
Laurel Taylor 00:22:15 Absolutely. So you can come straight to me Laurel Loral at jet Candidly.com.
Deanna Shimota 00:22:24 Excellent. And what's your website I'm assuming it's Candidly.com.
Laurel Taylor 00:22:28 It is Candidly.com or git Candidly.com.
Deanna Shimota 00:22:32 Excellent. We will post those links in the show notes. Thanks so much for joining me on the HR Tech Spotlight. Laurel. It was great to learn about. Candidly.
Laurel Taylor 00:22:42 Thank you Deanna. Thank you for having me.
Deanna Shimota 00:22:50 Thanks for listening to this episode of the HR Tech Spotlight podcast, where we showcase some of the best up and coming HR technology options in the market. If you are an HR tech company leader who would like to be considered for a guest spot on this program, please contact me via GrowthModeMarketing.Com or reach out to me, Deanna Shimota, on LinkedIn. And if you found this show informative, subscribe, connect with us on social media and leave a review. This is Deanna with GrowthMode Marketing signing off. Thanks for listening.
Deanna Shimota 00:23:24 We hope you'll tune in again next time.