Welcome to the Use Case Podcast, episode 270. Today we’ll be talking to Rachel from Canary about the use case or business case for why her customers choose Canary.
Canary helps businesses prioritize employee financial wellness.
Give the show a listen and please let me know what you think. Thanks, William.
Show length: 25 minutes
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Welcome to RecruitingDaily’s Use Case podcast. A show dedicated to the storytelling that happens or should happen when practitioners purchase technology. Each episode is designed to inspire new ways and ideas to make your business better as we speak with the brightest minds in recruitment in HR tech. That’s what we do. Here’s your host, William Tincup.
William Tincup (00:26):
Ladies and gentlemen, this if William Tincup, and you are listening to the Use Case podcast. Today, we have Rachel on from Canary, and we’ll be learning about the use case, the business case that her customers and prospects use for purchasing Canary. Rachel, would you do me a favor, audience a favor, and introduce both yourself and Canary?
Rachel Schneider (00:45):
Sure, I’m happy to. I’m so looking forward to this conversation. What Canary does is we help to deliver tax advantaged emergency payments to people in crisis. This is, I’m sure not quite common knowledge, but almost common knowledge to folks or people who experience crises of different types. Sometimes, it could be that they live in the path of a hurricane or wildfire, could be personal events that are similar to that, like a major medical event. People do step in and want to help each other in those moments, and doing so within the workplace is complicated. So, what Canary’s done is we’ve made it really easy for a workplace to set up a shared emergency fund. And then, when an individual has a crisis, they can come and ask for help and we can facilitate getting them that help as quickly and efficiently as possible.
William Tincup (01:41):
First of all, that is just God’s work. That’s fantastic. Crises could be defined in a lot of different ways, I’m sure, for different people. I’m sure I could probably define that in my own life in a few different ways. So, the company sets up a shared emergency fund. I’m assuming that employees and the company donate or have money taken out, whatever that gets. Well, why don’t I stop assuming. How does the emergency fund get funded?
Rachel Schneider (02:14):
You were headed in the right direction. This is really a charitable activity that we’re facilitating. The company can either donate money directly or they can do a fundraising drive internally. Often, we see a combination of those things, because people do really like the idea of contributing to each other. This is a way for a company to say, “We have your back. How can we all help each other?”
William Tincup (02:40):
Okay. Now, we understand how the emergency fund comes about. We all understand the importance of the fund. Who makes the decision? Who runs the fund?
Rachel Schneider (02:54):
Yeah, that’s really where Canary comes in. We built a very easy to use platform so that an individual who’s experiencing a crisis can essentially apply for funds. And then, it is Canary staff, people who are making the decisions, yes or no. Our objective is to make it as obvious as possible, so there should be no discretion left in it. It really should be here are the eligibility criteria, you meet the criteria, so now you’re going to get these funds. That’s what makes this feel fair to everyone and clear. But [inaudible 00:03:27]-
William Tincup (03:27):
Also take some of the personal, if Sally in HR, or Jim in finance, or any of those names, if they’re making that decision, there could be the potentiality for bias.
Rachel Schneider (03:40):
Exactly. Bias. Also, it’s a tough position to be in. Nobody is coming to apply for funds who’s not experiencing some challenge. And so, to have to be the person who says no, just because it doesn’t… The person experience a challenge, it just doesn’t happen to be the kind of challenge that a fund like this can view as a charitable donation, that’s a really painful position to be in. It’s also painful on the employee’s side. People want to put their best foot forward at work. They want to seem like they have everything under control. So, you don’t really want to come to your HR leader or your direct manager and say, “This thing is happening for us, and I might not be able to pay my rent next week.” Those are really the kind of stories we hear. I might not be able to pay my rent. I am in danger of having my car never work again.
William Tincup (04:33):
Rachel Schneider (04:34):
All repossessed. Right, exactly. Even though often it’s because of something that’s entirely out of the person’s control, it still feels bad. It feels bad. And so, it’s better for both sides if it’s somebody other than the employer who is sitting in between the employee and the fund.
William Tincup (04:57):
Well, a couple things come up. One is privacy, the vulnerability that comes along with crisis. A car being repossessed is a great example. Do I want any of my coworkers to know that that happened? Just because it’s loaded. It’s loaded with a bunch of other things in there. Could be just a simple mistake or it could be tethered to other issues going on. How do we make sure that employees can feel vulnerable without exposing themselves too much, if that makes sense?
Rachel Schneider (05:36):
Yeah, exactly. That’s why we keep all the information that people share with us completely anonymous, private. We’re really careful with the data. What a company sees is an aggregate anonymized version. They see X number of people applied for funds. They had these types of problems. They see basically a chart of the uses. They don’t see anybody’s individual story. And when we communicate about it with a company, we will sometimes share quotes or anonymized more detailed explanations of what’s happening in a person’s life. But we really make an effort to have it not be identifiable. It’s really the goal is to help people feel that this is useful and understand why it’s useful while protecting everyone’s dignity.
William Tincup (06:25):
Can I equate that to anonymous?
Rachel Schneider (06:28):
Yes, absolutely. I mean, we know who it is. At Canary, we know the individuals because we have to make a payment to them and we have to verify that the person is really an employee at the place that they are applying from. So, we need to know and we need to see some documentation that what they’re describing happened really happened. We are seeing information, but we keep that entirely anonymous from the perspective of the employer. One of the benefits here is that our staff is really trained to deal with these kinds of issues. So, our staff works really hard to be empathetic and supportive and caring, because you are dealing with somebody who’s experiencing a challenge of some kind.
William Tincup (07:12):
Yeah. It could be trauma. It could be a health trauma. It could be all across the spectrum. I see something really political. Again, you can avoid it at any point by just saying, “William, I want to go dive down a different path.” But Roe v. Wade was overturned, which I never thought would happen in my lifetime, but it don’t really matter because the listeners of this podcast are on both sides of this thing. Here’s the deal. What if that’s a crisis for someone? In either in direction, what if that’s a crisis for someone? How do they express that vulnerability and how does that get reconciled?
Rachel Schneider (07:57):
Yeah, it is. I take a deep breath because I know this is so touching for people. But we do… Yeah, it’s very challenging.
William Tincup (08:03):
We have friends and loved ones on both sides of this issue, so that’s not the point. The point is with something that’s… It could be something outside of that. Something that’s difficult. How do we deal with something that’s difficult? Now, the easy stuff, I was in a car accident and I can’t pay my medical bills. Okay, that’s relatively straightforward, I would assume. But something that’s not as straightforward, how does that get triaged?
Rachel Schneider (08:37):
A few ways. One thing is that we’re setting up these charitable funds in partnership with an employer. The employer does have some say so about what kinds of events they think this charitable fund should cover. From a legal perspective, needing to travel out of state for an abortion or having an unplanned pregnancy or having a pregnancy that is causing physical danger to the mother, all of those things can be included as a medical emergency that is unexpected outside of individual’s control, which are the benchmarks that matter for the tax treatment that we’re driving here. And so, that can be considered a crisis within the Canary platform. So far, the employers we’ve been working with, to the extent this has come up, it’s come from people who are saying, “We want to be able to help our employees if they need to travel, or if they need to go seek care that is more difficult for them to get where they are.” And so, we have employers who’ve been airing on the side of, “Let’s include that within the use case.”
But the other feature of the way the funds Canary sets up works is that in order for something to be considered an emergency, it also needs to be causing a financial hardship. So, the funds are really going to, in the case of a charitable fund, to people who are really experiencing, either they cannot pay for the event itself or they cannot pay for basic living expenses as a result of paying for the event, if that makes sense. So, it’s all people who are struggling. Now, that’s sort of side steps… It’s a real political issue for the employer to decide, yes, we’re including that, no, we’re not including that. Canary can implement it in either direction.
William Tincup (10:35):
We’ll get away from Roe v. Wade for just a second. The criteria is set by the company. Is that criteria transparent? Meaning, I know some they get to just… As they should, especially if they’re contributing a lion’s share of the money. They’re setting the criteria. Is that made public to employees in the sense of what is and isn’t fundable?
Rachel Schneider (11:07):
Yeah, it should be. Because we want it to be as transparent to people as possible so that they only apply if they are going to be eligible. The worst cases, you waste your time applying but you’re not eligible. So, the criteria really set up by the IRS. The broad picture is set up by the IRS, which is that there has to be an unpredictable, unavoidable event, and that event has to be causing financial hardship. Now within that, we can decide what events are covered and what events are not covered.
William Tincup (11:37):
The IRS, just for the edification for the audience, why the IRS is involved as this is non-taxed.
Rachel Schneider (11:45):
Exactly, right. I’m so glad you said that, because we at Canary could just as easily manage the same exact kind of fund but have the funds be taxable, and then, it really can be anything. You would be free from those constraints I just described. And then, you could really be broad which we think is a great way to think about this, but people are often attracted this idea because they can make charitable contributions into the fund, and individuals who are receiving payments can receive payments that aren’t considered taxable income. Everybody likes, “Oh, it seems like this is tax efficient.” We’re all attracted the idea that you might be able to do something and not pay taxes.
William Tincup (12:32):
Right If it’s a $1,500 car challenge that they’re having, et cetera, unforeseen, et cetera, if it meets the IRS criteria, then you don’t have to mark that up so that it’s taxed. You can just give them $1,500 to then take care of the car issue. If you were a tax voice, the company would have to either give them less money, pay the 1,500, but they’d receive $1,250, whatever the tax rate is. Or they’d mark it up, so that they would then take care of that tax. This helps the company stay within the guidelines of the IRS and get the people exactly what they need for that emergency.
Rachel Schneider (13:18):
Exactly. I’m so glad that you explained that so clearly. I think I get into the weeds of it and it’s like…
William Tincup (13:23):
I don’t think I did. I don’t think I did. No.
Rachel Schneider (13:24):
No, it’s so perfect. No, it’s great. I feel like… Yeah, luckily this is recorded. We can just put that on our website and people will understand it.
William Tincup (13:34):
You did mention that best practices that the criteria should be disclosed.
Rachel Schneider (13:40):
William Tincup (13:41):
Do you have clients that prefer not for the criteria to be disclosed?
Rachel Schneider (13:48):
I don’t think that we do. There’s plenty of ways to do a program like this without hiring Canary.
William Tincup (13:55):
Right. Good point.
Rachel Schneider (13:57):
Certainly, employers who are running programs like this on their own may have made a different choice about what to share and what not to share. One of the reasons why I launched Canary was I thought this is a hard thing to do on your own. The fact that companies are doing it suggest there’s a real need.
William Tincup (14:14):
Yeah, I wouldn’t do it alone. A, I just think that there’s too… In universities, they call it [inaudible 00:14:20], where it’s an independent objective third party that’s within the university, paid by the university generally speaking, but can mitigate really difficult situations, and they’re not beholden to anybody. Which, again, I think, when it’s done internally, it’s that perception was a hint of impropriety as impropriety. Just the mere hint of doing it internally, I just think I would avoid that at all cost just because having an independent group like Canary that just says, “Okay. No, here’s the criteria, then apply.”
Rachel Schneider (15:01):
William Tincup (15:02):
We’re out of it. Hope your emergency gets funded, if it does, if it meets the criteria and the funds are there. Great.
Rachel Schneider (15:11):
Absolutely. What we hear from employers is, “Look, our people ask us for help.” Every person I’ve ever shared this idea with who has been a manager of peoples has had some point in their career where somebody said, “I’m having X, Y, Z crisis, can you help me?” For the manager or the leader of the company, you don’t want to say no, you really can’t say yes. So, it’s much better to say, “Go over there and ask these people, and they’ll manage it for you.”
William Tincup (15:42):
Yeah, and there’s expertise there too. I mean, it’s also not just the independent an objective part, it’s also these people do this every day. If it was HR, HR is putting out fires every day when employees come to them, and they do every day. They come with emergencies, then it’s hit-miss, and it looks arbitrary, which just a perception of it looking arbitrary. Oh, by the way, they don’t do it every day.
Rachel Schneider (16:09):
William Tincup (16:11):
I wouldn’t expect this to be in any job description for people ops or a CHRO to then be able to make these decisions. Let’s talk about the other side of this just for a second, for the software side. When you show Canary to folks, I would assume that you probably talk to finance, you probably talk to C-suite, you talked to HR, you talked to benefits, you talked to probably a lot of different people, a cadre of personas that you talk to. What’s your favorite part of the Canary demo? What do you love to show people?
Rachel Schneider (16:46):
I love that question. I love showing people the administrative console that an HR leader or somebody internally at the company can see because what they see is so beautifully laid out, but also, it’s just the information that they want and need. It’s searchable in the way that they need it to be searchable. So, what an HR leader is going to need to know is how many grants were made in the last 12 months or whatever period is right for them. They have the ability to adjust the dates, but through which they see data, and then they’re going to see exactly the highlights of how this program is going that are relevant for them. That’s really exciting.
I mean, the piece that faces individuals, we’re also really proud of. One of the things that’s challenging, to be honest in the sales process for this is that our user and our buyer are not necessarily the same people. Your average employee is who is struggling is going to be the person who comes to the part of the website to apply for money. We’ve worked really hard to make it very easy to use or beautiful to look at, all in the spirit of, we think that increases the dignity and efficiency of the process for people. But there is some distance there between buyer and user, so it’s really fun to show the administrative console where the person on the other end of the call is getting their direct needs met.
William Tincup (18:14):
I can see them falling in love with that just immediately. Just like, “Oh my goodness.” I mean, why would they have that? Take us into some customer success stories. You don’t have to name names of course, but just things that have happened, things that got funded, things that have been resolved that might not have been resolved before Canary.
Rachel Schneider (18:35):
Yeah. One of our CEOs, I know he tells this story a lot when he talks about why he did this program, we were able to give a grant to a home healthcare worker who was pregnant at the time and had a major income disruption in her life and was really concerned about being evicted. So, here’s somebody who is at the end of her pregnancy, worried about what the stress is doing to her pregnancy, and worried about where is she going to live. Her job is to show up for other people and to help take care of them. And so, where’s the emotional bandwidth to do that when you’re so worried about your own life?
Through the Canary Charitable Fund that her employer had set up, we were able to give her a grant. She was able to pay her rent, buy groceries for her family, really alleviate her stress. She reported back to us, “This is what saved my pregnancy,” because she was starting to experience hypertension and was going to need to then be on bedrest, was really worried about how the rest of the pregnancy would go. But her stress level dropped. She had a really normal delivery and was able to get back to work.
We just all felt so gratified by that. Here’s somebody whose job it is to care for others. And so, to have her feel like she’s also being taken care of was really consistent with this company’s brand and way of being in the world and what they wanted to do for their people, but can be hard to implement. So, we all felt really good about that particular story. But most of the people we’re helping, I can tell some version, maybe a bit less dramatic, but some version of that. I was so worried about my own crisis. How am I going to show up and be there for other people?
William Tincup (20:30):
I wanted to go back to the fund. We’ll go backwards. First of all, that was a wonderful story. The fund itself is funded by employees as well as the company, or each company determines… Just for clarity for the audience. The fund itself, how do we decide how much to put in the fund and who puts money into the fund?
Rachel Schneider (20:56):
Often, a company is making a direct contribution out of its P&L. Or if they have a foundation, they can make a contribution. We also really do see employees giving into a fund. One of the things that’s so nice about that is that then when you receive the funds, you don’t feel like, “Well, this was a handout.” You feel like, “Well, this is something I’ve contributed to also. We all put this in place to help all of us.”
William Tincup (21:21):
That’s a good point.
Rachel Schneider (21:23):
It just feels really good. One of the things that it’s easy to forget about America, we’re all sort of criticizing ourselves a lot lately, is actually charitable donations in our country are really high. People really give to the causes that they care about. Especially at lower income levels, people give. And so, we’ve had people who received a grant. Maybe it’s a $1,000 grant, and then they’ll say, “I’m going to give $5 every paycheck until I’ve also given in $1,000 to this grant because I want to pay this forward. This is so important for me, and I want to be able to help others the way this helped me.” So, there is really an instinct to give as well as to request.
And then, in terms of how much money you actually need, usage tends to be much lower than people expect. You think, “Oh, well, we made this money available to anyone who has a crisis. We know people are living on the edge financially. We’re going to see huge numbers of applications.” But you really don’t, because people understand this is for an emergency, and this is for all of us, and it’s a shared resource, and I should only ask if I really need it. So, we tend to see usage in the low single digits percentage-wise of any population. Under 5% of an employee base will ask for money in any given year. And then, we help companies figure out what’s the maximum grant size they can offer given what their resources are and what we think the usage is going to be.
William Tincup (22:54):
Love that. Last question. Prospects that have never interacted with Canary or even something like Canary, what questions should they ask of you, buying questions? What should they be asking you that’s probably not even on their radar?
Rachel Schneider (23:13):
That’s a great question. I think they should be… I mean, I was like, “What should be asked?” No, totally. The questions we get most are, what people are most worried about is how much is this going to cost me. That’s the bottom line for people. It sounds like a really good idea. But then, people immediately go to how much is it going to cost. I think what we would like people to be asking us is, what are the impacts people achieve? One thing we do is we survey people after the fact and say, “Well, how did these funds affect you and your life? What outcomes did you have?”
I’d love to see people really focus there because the kinds of outcomes that we see are, of course, things on the company side. “I feel more loyalty. I feel appreciative of my company for doing this. I feel engaged with my company.” But also really big deal, nuts and bolts things like, “I was able to avoid late payments on my rent, and I was able to avoid being evicted, and I was able to avoid downgrading my food choices.” We see really core things. So, I’d love for people to be focused there. The hardest question we get is, why should a company do this? Why? Well, it’s the most basic way-
William Tincup (24:29):
That’s the easiest question.
Rachel Schneider (24:36):
Yeah, the easy and the hardest. Because when we get that question, it’s coming from a, “well, if we pay our people enough, why do they need this? If we have health insurance, why do we need this?” That question I think is also a good one. Yeah, I’m glad you have that wow response. That question to me is like, “Well, everybody experiences moments when they’re just short, and we need every possible way in our society to step up for each other.”
William Tincup (25:01):
Rachel Schneider (25:03):
Sometimes it’s like, “Why my company instead of government?” Or, “Why my company instead of the person’s family?” To me, it’s like, “Well, why not everybody? We should all step up for each other in every way we can and not make choices Like, ‘Well, stepping up for that person is somebody else’s job.'”
William Tincup (25:19):
Drops mic. Walks off stage. Rachel, thank you so much for your time. This has been fantastic.
Rachel Schneider (25:25):
Thank you. Thank you so much for your time. I love this conversation and really appreciate what you’re doing on your podcast.
William Tincup (25:30):
Absolutely. Thanks for everyone listening to the Use Case podcast. Until next time.
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William is the President & Editor-at-Large of RecruitingDaily. At the intersection of HR and technology, he’s a writer, speaker, advisor, consultant, investor, storyteller & teacher. He's been writing about HR and Recruiting related issues for longer than he cares to disclose. William serves on the Board of Advisors / Board of Directors for 20+ HR technology startups. William is a graduate of the University of Alabama at Birmingham with a BA in Art History. He also earned an MA in American Indian Studies from the University of Arizona and an MBA from Case Western Reserve University.
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