The top challenges for employers in today’s job market
Alight CEO Stephan Scholl joins Yahoo Finance Live to discuss the labor shortage and top challenges facing employers.
Video Transcript
JULIE HYMAN: Let's talk to somebody who knows a lot about all of this. Rick is going to stay with us. And we're now joined by Stephan Scholl, who is CEO of Alight, which is in HR and benefits software company. Stehpan, let's start with the child care piece first of all. What kind of benefits changes have you seen on your products and platforms that would reflect maybe an increase in child care-related benefits or maybe not?
STEPHAN SCHOLL: Yeah, good morning, Julie. Great to be with you. And listen, the child care element is top of mind for so many. Yet it's just one piece of a larger benefits challenge that most companies are dealing with.
And when you think about the challenge corporations are dealing with, it is about keeping Americans more financially secure and healthy. And the challenge is that is a fragmented world of technology. So many of my customers-- as you know, we serve half the Fortune 500. And I've been able to get in front of so many of the Fortune 100 CEOs over the last year.
And time and time again, they're spending enough money on these benefits programs. They're just not getting the engagement. There's no existence today of a health and wealth platform that's integrated today for an employee to go to.
And I connect the dots across health and wealth, for something as an example, around mental illness. It is a health crisis. But when you dig into the details of mental illness, it starts a lot with financial crisis. I can't pay for child care. I don't have enough money to pay for rent. And so that deals with anxiety and depression. And that has a big impact on a lot of employees.
But you need the integrated data sets. You need the analytics to build a personalized experience for the employee. Up until a year ago, that didn't exist. And that's what we've been focused on here for so long now.
RICK NEWMAN: Stephan, what is your view of the so-called labor shortage? Is there really a labor shortage? And if there is, we know there are plenty of people in the workforce who could be taking some of these open jobs, and they seem not to be. What will it take to get them into some of these jobs?
STEPHAN SCHOLL: Just three weeks ago, I had a fascinating conversation. I mean, Generation Z and the Millennials make up about half the full-time working force population, and increasing from here on, of course. And one of the CHROs of the largest manufacturers in the United States, we were talking about building a program for the next college recruiting cycle to go in and say, in the past, an engineer would have between three and five jobs in their career.
They're now waking up and realizing that, actually, engineers want to understand, can I spend 25 years in my-- can I have one career at this company? So having a conversation around paying for your future kids' education, paying for your retirement benefits programs, making sure that you are healthy and financially secure through that lifecycle. That is something that was never done during a recruiting cycle.
So I was fascinated to see that they're seeing a big cycle shift from the old days where you were lucky to keep an engineer for three to five years to now the cycle being one where how do we build a platform of engagement across health and wealth that keeps employees wanting to be engaged and excited about a 20, 25, 30-year career at a company.
BRIAN SOZZI: Stephan, the great resignation, it really does continue. What are you seeing your clients do to keep the workers they have inside their own four walls?
STEPHAN SCHOLL: They're spending a lot of money on technology and innovation. I said this is now the decade of the employee. And I've been doing this for 25 years. And most of the money corporations have spent over the last two decades was all about servicing their clients better. And it's understandable.
We've all seen the digital disruption and the personalized experience. All of us are consumers. It's amazing what you can do online as a consumer, buying goods from a company.
As an employee, some of my companies I deal with have 50, 100 different point solutions that they have to stitch together. So the good news is, it's finally at the CEO level. CEOs want to understand how many of their employees can stitch together $500 in a moment of crisis. Most of them don't know that today. And that is an important element around productivity, improvement, keeping employees happy.
But to do that, you need an engagement platform that is integrated across all these health and wealth dynamics. And if you look at all these point solutions, most CEOs I've talked to have realized two or three years into some of these investments, that they're getting between 2% and 3% and 4% engagement rates across their employees.
Every one of us here on this discussion has an employee assistance program. The average utilization of an EAP program is less than 2% to 3%. That doesn't work for the average employee who wants more help in this moment of crisis that we're in.
RICK NEWMAN: Stephan, I'm wondering if we're not over-complicating this to some extent. What if you just give people more money? I mean, you can have these support systems along the way. But aren't workers responsive? Just pay them enough, keep raising pay until you get them to come in, and then let them take care of themselves?
STEPHAN SCHOLL: I think here's the interesting thing. There is enough money being spent. As I said earlier, after salaries, benefits is the biggest expense of every company. The challenge you have is when you start getting into the benefits programs.
Some of my biggest clients, most of their employees that have less than $40,000 in income, don't have the right critical illness programs. Why? One company, I talked to the CEO. They spent billions building 22 new programs during the pandemic. $40,000 and below employees, 90% didn't take one because they couldn't connect the dots of information because of the complexity of those programs.
And frankly, only two of those 22 programs were the ones that the employee making $40,000 or below needed. But the employee wasn't capable of sifting through all this information.
Now think about health care spending accounts. You start thinking about payroll deductions. And if you do the right decisions on your benefits deductions, you can actually take more pay as a net basis because you can write it off on the gross amount of your payroll. So that connective tissue across all those complexities of 401K, HSA, benefits, there is a lot of money being spent on that. There is enough there.
It's just demystifying it, to your point, and keeping it simpler so that you maximize the value. And that recipe, by the way, is different whether you're making $40,000 or whether you're a new college graduate, whether you're ready to retire. So it's making it a personal experience for the individual company. That's the focus of what we've been doing. And that's got to be the future of how we drive better engagement.
RICK NEWMAN: One observation, just for the sake of the discussion, I mean, I have heard from people working at other companies that sometimes, workers just get bombarded with so many emails, surveys, and things like this--
JULIE HYMAN: [LAUGHS]
RICK NEWMAN: See, we've all heard it.
JULIE HYMAN: I don't know where you've heard that from, Rick.
RICK NEWMAN: We've all heard it through the grapevine, haven't we? Why do companies do that?
STEPHAN SCHOLL: Because they're grasping. Listen, this digital disruption on the human capital management side has never been there for 20, 25 years. Listen, we talk about ESG. We talk about diversity and inclusion. We've been focused on the big S, capital S.
Social responsibility begins with investing in the employees. And again, I'm a technologist by trade, analytics and AI. We've never treated employees at the same as we do our clients. And if we just do that, the next decade has to be about the employees, simplifying the experience, building a consumer-grade experience for an employee that they can log in into one space--
I mean, by the way, just one of the biggest indictments, to your point about surveys, 70,000 searches a minute on Google on health-related matters, 70,000 a minute. That's an indictment of this entire health industry because Google, as I think we would all agree, is not the system of record or the standard that we should look to on who's a good doctor and where should I go for care. That's the problem we have to solve for.
JULIE HYMAN: As you were talking earlier, I was just thinking, my phone, just as an example, in the system, the iOS in the phone, very simple, intuitive to use. Whenever I log on to my corporate HR platforms, whether it be wealth, health, any kind of communications, it is just a thicket of complexity. So your point is well-taken that consumers, employees, clients are all treated very differently.
Stephan Scholl, thank you so much for joining US, CEO of Alight. And our Rick Newman, an interesting discussion there.
