Should you worry about your employees’ financial health, knowledge, and well-being? How your employees feel about and manage their money can directly impact your bottom line. Empowering them through education and training can provide them with a peace of mind that will cut down on “presenteeism” and make your workforce more productive.
Rich: Our next guest has been providing fee only financial planning services to Maine residents over the last two decades through bank wealth management and retail channels. The first such planner in this business model in Maine, her current role utilizes her planning and advisory experience to scale access to financial planning services, leading to improve financial health and resilience, one person, one business, and one community at a time.
She recognizes there are varying needs for financial advice and access to financial resources, and it should be provided to Mainers in such a way that it meets people where they’re at. This results in services for the financially healthy, programming for the financially coping, and resources for the financially vulnerable among us.
As senior financial planner at Machias Savings Bank, she does not sell products or services. Rather, consumers implement her planning recommendations with their providers of choice. We’re looking forward to diving into what owners need to know about the financial health of their employees and how that impacts their own bottom line within Annette, Lease. Annette, welcome to the show.
Annette: Good morning. Thank you to have me. It’s good to be here with you, Rich.
Yury: You know, we always get excited about guests on the show, but I am delighted to get a chance to interview Annette because we are colleagues. And Annette, I’m really curious, why did you decide to dedicate your professional life to improving the financial health of your customers? And why is this topic so important, especially right now?
Annette: Well interestingly, I started my professional career as a part time traveling teller way back in the day at a credit union. And as you know credit unions are really, their foundation is customer service. They meet people where they’re at. So I got my foundation there.
And then what I learned is that people were really needing more than what the traditional banking services were offering. And just by chance, a lady named Becky Sargent out of Ellsworth at the time with Union Trust Company was on the American Bankers Association board. And what she was seeing on a national basis was this thing called “fee only financial planning”, and it was being delivered to the banking channel previously would’ve been delivered only to the wealthy through investments or brokerage channels. So she hired me on and I was able to then really grow my understanding of what fee only financial planning is.
And having done that for 18 years, I soon learned that fee only financial planning really shouldn’t be relegated and offered just to those who are wealthy or financially healthy. What about the rest of us, me included. And it just so happens that Larry from Machias Savings Bank reached out and said, “Hey, can you develop a plan, financial planning for the rest of us? Just the everyday Mainer, they need access, too.” And through Machias Savings Bank I was able to develop with a great team of support and other channels, some programming for just the Mainer and business owners.
Yury: Wow. That is fantastic.
Annette: I would say that in addition to that, right now we’re in crisis. We’re in a financial health crisis and we need to stabilize folks, and that’s what we’re gearing up to do is how do we offer stability.
Rich: And Annette, Is that specific to COVID or you just mean that the financial education in this country outside of COVID is in crisis?
Annette: Okay. So very good question, Rich. Prior to COVID we were in crisis. We were very unstable. We know that only 70% of people surveyed had $400 available to them. And we learned that through, I believe it was 2018 when we had the government furlough. And the government employees didn’t have these funds, and that started this snowball with research. But since COVID, we know that people have lost their jobs, businesses have closed. And on top of that, there’s been an added stressor for those parents of school aged children, and that is teaching remotely. And what does that mean? How do they work and teach at the same time? So there are a lot of balls in the air and right now we’re in more crisis than we’ve seen in our lifetime. And hopefully we’ll ever see again. S
Rich: So Fast Forward Maine is a podcast about growing Maine businesses. So let’s take a look at this through the lens of Maine businesses. What do you feel are the key indicators that determine financial health? And I’m looking at this from the eyes of the business owner from the business itself, as well as the employees who work at that company.
Annette: Yeah. So there are nine drivers to financial health and way of businesses. And I’ll name just a few.
One is obviously meeting financial obligations, whether or not they have sufficient cash flow, and plans for cash flow variability, which is what we’re seeing right now. We kind of have already been used to this due to the seasonal nature of so many small businesses in Maine. But now is a little different. It’s not just seasonality because those seasonal businesses are not making the money during their prime season, tourism being one. So anything related to tourism, and I would say agriculture goes to the next and fishing industries. Are they able to sustain the debt load and do they have access to capital investments? These are just five of nine indicators that help a business determine whether or not they’re healthy and can sustain this crisis.
If we look at the business owner, the business owner in Maine generally are these mom and pops, they’re self-employed, maybe have one employee and they very much act and behave like a consumer. So if we look then at consumers, we can then ducktail right into the employees of the businesses to look at their financial health. We are gauging or surveying based on how much save, spend, borrow, and plan for the future. And then that tells us where folks are at and can better give us an opportunity to plan for improved financial health.
Yury: Can you speak about the importance of addressing the financial health of employees, and what is the impact of that on the business that employs them?
Annette: Sure. I think we can sum it up in three words; health, wealth and wellbeing. Everybody wants to feel healthy, feel wealthy and be happy. And if we ask, what does that look like? Well, it’s all relative, right? It depends on where you are at this point in your life. And so what it does, if employees feel healthy, wealthy, and are happy, they’re contented. And they’re going to come to their role at the company really being present. And your outcomes, you’re going to be better and they don’t have the stressors that they’re bringing into the job.
You know, when I started my career, we used to say, “Keep your personal life at the door.” And that’s no longer the case. Our personal life is carried on our backs. And with that comes our financial health life and we’re taking that wherever we go, like a shell on a turtle.
Yury: Yeah, especially right now with a lot of businesses or a lot of employees actually working from home. So you definitely cannot really separate work and life balance, it feels like everything just merges into one place.
Annette: It’s a cauldron, we’re in a cauldron.
Rich: So I guess I’m questioning, first off, these people who are having these financial problems, what is the role of the business owner? What’s my responsibility as the owner to provide them with? I mean besides paying them more, which seems like knee jerk reaction here. But what are some of the other things we can do? And pre-COVID when there was 0% unemployment, is there any way to communicate this to people I’m looking to hire, that I’m going to help take care of them, as a way of sort of to help for recruitment?
Annette: Yeah. So. It used to be that employers didn’t touch somebody’s personal life or their financial. Now it’s a given, employees want help from their employer. And we’re not just talking about pay raises and salaries or access to funds. We’re talking about programming, we’re talking about teach me how to fish. That’s been lost in the schools over time and that’s come home to roost.
So if we look at an employer that has a culture of financial health, during the recruitment process the conversation looks a lot different, right? The recruitment process may have a survey involved, in way of determining somebody’s financial health as an employee. And having that discussion when you were hired here, we are going to improve your financial health just by the nature of our offerings and your participation engagement in it. And that is part of being an employee here, because we know if you’re physically healthy and financially healthy, you will be happy here and be productive here. And we will support you in that journey.
So if I were a business owner and I am in the process of trying to hire people in a very stiff environment or a competition that will be a differentiator, that conversation is going to appeal to a potential employee. Particularly if they are in that coping category. And I would suspect that 60 or so percent of Mainers are in that coping category. So you’ve just got the majority of your workforce right there. And I will say that financial health isn’t limited to those people with low incomes or socioeconomic economic. We found that yes, you’d have a six figure household income and you’re still coping.
There was a time when if you had a six figure income in the household, you were considered very well to do in the state of Maine. But with the onset of two working people in the household, dual incomes – which means dual expenses and way of transportation – two vehicles, childcare. And it is an expense that we’ve taken on now that we didn’t have 20 or 30 years ago, somebody staying at home as well as the insurances that go along with that. So it’s going to be a differentiator for an employer who really is looking to see that and obtain that quality employee.
Yury: Annette, in our conversation before this interview, you mentioned a very interesting dynamic or an issue that transpires in the workplace, especially in relationship to contribution to the growth of business. You talked about presenteeism. So, what are the ways to identify the presenteeism, and how would you suggest the business owner can combat that?
Annette: Okay. So let’s take a moment to explain what presenteeism is. That’s when an employee shows up on time, they’re present, they’re not late, they’re there for their eight or nine hour shift, yet they’re mentally absent. And we know that the employees spend between 2-3 hours a week on the job addressing their personal finances. So they’re there, they’re stressed, but their output is going to be less, whether it be the quality or quantity. And we know that if we increased the financial health of somebody, we’re also increasing the quality of output, but also their physical health. They’re not stressed. They’re less stressed, I should say. And with stress comes the cascade of physical health issues that are all related primarily to financial stress.
Yury: So how can we identify that? Like you said, if I have an employee that clocks in on time, clocks out on time, and it seems like they’re doing an okay job, that there may be some concerns. But what can be that indicator for me as the business owner so I can say, I have this person, 40 hours a week, and it seems like the output is okay. But should it be a conversation with your employees? Should there be some additional key performance indicators that can help me understand that it’s time for me to intervene and support my employees?
Annette: I think it’s okay to assume that your employees are under financial stress. I think that’s an assumption. So even though you may have an employee that is presen,t has a decent salary or above average salary, you don’t know what’s happening with the partner of that person. So I may come to work every day and everything seems well in terms of my pay grade on paying my bills on time, but we don’t know what’s happening with my spouse. Did they get furloughed? Did they lose their job? Is the $400 a week plus $600 a week that’s just been lost enough to supplement that income.
I think business owners now have to take an approach of assumed consent. You have the ability and the permission to talk to employees about their personal finances. As a matter of fact, they want to. And I think the first step to take would be to survey them. We understand that now is a new day where we’re in COVID. Post COVID, we don’t know what this is going to look like, but we want to help you and we know this is a stressor for families in Maine. So take a survey, give your employees the survey to determine where they are on the savings, spending, borrowing, and planning, and then you can address their needs from there.
Yury: Are there any particular resources that you would suggest to use as a blueprint for that survey? Because this may be a very new topic for a lot of business owners or something that they have not considered So where can we lead them in order to take the right step in the direction of surveying and understanding the financial life of their employees?
Annette: So it doesn’t have to be scripted. It doesn’t have to be formalized, so to speak. You can just send an email, you can have HR talk to people individually, depending on the size of the business. Just ask, “How is your household doing financially? Have you had less income in your household today than you did January 1st?”
You know, these types of questions without being very pointed and specific gives you a pretty clear picture of where folks are at. What are the biggest expenses have you had over the last six months?
Yury: You know, I also think just having this initial level of empathy allows you to build stronger personal relationships with people that work with you, because you’re clearly indicating the fact that you’re not simply committed to the success of your business, but you’re also considering your personal contribution to the success of the people who work for you. So I think it better bonds, better trust, and ultimately I think if someone is doing something good for you, you probably reciprocate and would want to do the same in return.
Annette: Exactly. And I think you hit the nail on the head there. Empathy, empathy goes an awful long way in understanding what people’s challenges are. As a business owner you’re not going to come into the office and talk about the boat that you just bought or the high end vehicle that you just bought. That’s just inappropriate now. But what you may want to talk about is that you paid off your car, that you have saved money for an emergency, or perhaps that you were able to start an emergency fund account or an education savings account for your child, that you have auto-enrolled in the retirement plan at the company, that you’re meeting the match or you’re able to, um, meet the maximum.
We want to demonstrate behaviors that are financially healthy, and then reward those behaviors of our employees. And you’d be surprised when we give people permission to talk about finances with judgment free zones, without judgment, it can be phenomenal. It’s magical almost.
So think about an employee that might be struggling and you have their colleagues say, “You know, I found that I can go to this website or this app and get coupon discounts”, or, “Did you know our employer just offered some savings in our employee benefit package where I can go to XYZ company and get a reduction in my oil, my heating fuel, or I can get tires at a discounted price, or my cell phone, internet usage”. All of these things are avenues in which an employer can help employees a) start talking about their finances, but b) start looking to ways to reward them and just having an open dialogue. And you’d be surprised. It becomes really catchy. It becomes is as much of a high that we get on spending or for spending, we can reverse that and get that same excitement or high and savings, in paying off debt in, creating better financial health for ourselves.
Yury: I completely agree with the statement of reversing behavior. Several years ago I had an opportunity through Machias Savings Bank to take the Dave Rhames’ program. And that was, for a highly educated person like myself, I was so surprised to discover new ways to like, if I can’t make more than what I make, what are the other ways I can actually “make money by saving money”, and starting to create changes to the way I live. Instead of taking my money and just going and spending it and living paycheck to paycheck, how many subscriptions do I have that may not be beneficial to me, how much am I saving every week, do I have roundups if I use my debit card and can I get a couple cents here and couple cents there. And then at the end of that after two years, I don’t want to brag about it, but my debt has significantly decreased even though my salary remained unchanged. So I can totally vouch for the statement of when you reverse the behavior, you can identify new ways to be excited about your financial life.
Rich: I’m going to play devil’s advocate here. Okay. Because I am a business owner and I have been doing this for 23 years, and I have attempted over the years to bring in people from the outside – our financial advisors – to do trainings and talk to people. And I have not really gotten much buy in. So I would love some tactics on how to do this.
I know you said send out a survey. I run a small business, I don’t really think – and I could be wrong – I don’t really think my employees want to share their financial struggles with me, that they might see it as some way that – I don’t think my employees might think this way – but I think that employees might feel that a boss suddenly asking his or her employees about their financial status almost feels like a negotiating tactic. Like, I really got you. I’m on a short leash now because I know that your spouse was just laid off. So I guess you can say, come from a place of empathy, but I’d love some real tactics or ideas on how do we broach the subject and change the culture of the company so it doesn’t feel like I’m saying, “I need you to save money because I’m not going to pay anymore.”
Annette: So two very good questions in one there, Rich. First of all, as a business owner, are you comfortable talking about your personal finances? Are you comfortable saying that you’re struggling with something, or even if you’re not with yourself, my brother or my sister has this issue, or I have a family member that’s facing this and this is what they’re doing? The first is having a level of empathy and being on the same page.
The second, you make a very good point. Some employees in a very small business are not going to feel comfortable talking about their finances. That’s when you look to providers. So you mentioned having an investment provider or somebody coming in. I think it’s a new day and I fully understand what you’re talking about when we all have our 401k provider come once a year and talk about our investments and what have you. But it’s pretty hard to talk to those people when they come in in a luxury vehicle. We all look at that and that’s okay, that’s not meeting me where I’m at.
So what you want to look at now is the vendors that you have, including your 401k vendor. If they haven’t transitioned into being a PR partner with you during COVID, you need to look for new partners, because it’s a new day with business owners. They want somebody who’s going to help them to the next step. To help stabilize their employee base, to help get them to where their company needs to be. And where they’re going and to be true partners in that. They want to share that vision, and they should share that vision.
So perhaps that outside partner can survey the employees. I know at Machias Savings Bank we did a pilot program with what I would consider a large employer in the state of Maine. And as a third party partner, we were able to go in and survey and those were anonymous. But we were able to give them the survey results and share those anonymously with the business owner.
And what’s interesting, Rich, is what we found is where people self-assess, self-report, and then you have their actual doing their activity. And then you compare the two. And there’s a little bit of a difference there. People tend to self-assess in a way that we are projecting where we’re going or where we want to be, versus where we’re actually at and what we’re currently doing.
Yury: And these are all great recommendations. And Rich, thank you for asking this question from the perspective of a business owner. I want to transition to our next question because it feels like it’s a very critical conversation when we can go on and on and on, but you know, we’re short on time. But this question that I wanted me to ask you is in the recent study published by the Financial Health Network. They identified that 60% of employees surveyed say they’d be more likely to stay at their job if their employer offered financial wellness benefits that help them better manage their finances. So what does it mean for business?
Annette: Well, it means adjusting their culture. And I don’t mean changing the culture. I’m talking about enhancing your culture, enhancing it in such a way where this now becomes a part of an employee benefit. This just becomes who you are as an organization, and it becomes part of your moniker and your branding.
So if you look at small businesses in that regard and you look at the deliverables in that way, you also have to ensure that it’s just not a function of HR. Meaning, it’s not on a list of employee benefits. It has to be lived, grieved, and woven throughout the fabric of the company at every level. And you have to demonstrate what financial health looks like, the challenges as well. We skin our knees, we’re human beings. Share that. Share that we skin our knees. Share that, in my case for example, I just took a bath on a vehicle that I bought and I own it. I have to say I’m a feeling financial planner. I don’t have all the answers. And sometimes I purchase emotionally, and I did, and I took a bath on it. So give people permission to say, “Sometimes we make a financial mistakes, but we can work our way out of them and save our way out of them and decide our way out of them.”
Yury: Gotcha. Thank you.
Rich: So I like everything that you’re saying in that, and certainly I want to empower my employees to have better control of their financial futures, whether they stay with flyte, whether they move on, whatever they want to do. While they’re here, how do I establish a lasting culture of financial health? What are some of the core elements and takeaways that you can give me right now that I can change at flyte for the better for the financial health of my employee base, from their standpoint, not necessarily how my company is doing?
Annette: Yeah. So aside from enhancing your culture, it’s some of the things that you can offer, looking at the real world issues folks are facing and then offering resources or access to resources. Employers aren’t going to have all the answers, but they should be able to offer access, number one.
Number two, then what about programming and tools? Earlier you already had mentioned Dave Ramsey programming. So Machias Savings Bank a few years ago offered as an employee benefit, access to Dave Ramsey’s financial health programming. And essentially it’s a budgeting tool. And it is an app and it comes with videos and whatnot. You take baby steps, the further you go, the healthier you become. That’s an employee benefit. And if you want it, a consumer can go get that for $100 a year, that program. But as an employer, wouldn’t it be great if you could offer that as an employee benefit for as little as $100 a year. And when you teach somebody how to behave differently, they’re taking that beyond flyte. They’re taking that into their homes, they’re taking it into their communities, and they’re taking it on their journey.
Yury: Fantastic. This is a great recommendation on that. As I said earlier, we’re getting almost to the end of the show and I want to make sure that we ask this big question that we ask all of our guests. And the question is, if you were to change one thing in Maine’s business ecosystem, what would that be?
Annette: That would be a culture of financial health, and that we’re rewarded for our improved financial health.
Rich: Awesome, sweet, tight, right to the point. Annette, this has been great. For people who want to learn more about you and what you’re doing, where can people find you online?
Annette: You can email me at ALease@machiassavings.com. Or we have a bank of coaches. If you’d like to reach out to a financial coach it’s, email@example.com, or you can call +1-844-692-7526.
Rich: Awesome. And we’ll have all of that in the show notes. Annette, thanks so much for stopping by today.
Yury: Wonderful. Thank you, Annette.
Rich: Very informative episode with Annette. And as mentioned, you can find the full transcript at our website, fastforward maine.com/61, with all of Annette’s contact information there as well.
This is the part of the show where we share our ‘fast takes’, what was our big takeaway from our guests. So Yury, what was your fast take today?
Yury: Rich, thank you for that. I had a couple of fast takes that I was debating between. But what really made me curious or excited about what Annette shared with us, was the opportunity to focus on be behavior change instead of getting “high” from spendings and buying things that may not be essential or needed – especially in times of crisis – and focusing on the amount of money that you can save. Whether it’s by eliminating your subscriptions, by downsizing the way you like to spend your time outside of work from home environment and constantly going out.
So it is an exciting idea. And for those that focus on prioritizing saving versus spending, it may be a new source of excitement. So that was my fast take. And I actually encourage everyone to think about that and maybe give it a shot and see how much you can save. And in a month or two hit me up on LinkedIn and say ‘thank you’ if it works for you. On that Rich, I want to hear from you, what was your fast take?
Rich: Before we get to that. I want to know, did you want to share your Venmo information, just so people can give you a cut of their savings?
My first take was this, that my responsibilities as a boss, as an owner, for the financial health of my employees go beyond just providing a paycheck. And this is definitely something that I explored years ago and brought in people and didn’t get a whole lot of buy in. But maybe it’s time again, maybe the relationships between owners and employees have changed. Maybe COVID has made these changes and maybe it’s just time to check in.
I’ve got a number of different employees from back then, and it might just be time to have an honest, empathetic conversation with them about what kind of resources can flyte provide that’s going to help them become more financially solvent, stable, and put them into a growth mode above and beyond just paying them more money.
There’s got to be some other options in there. Because just giving people more money may just mean that some people are just going to spend it more. So it’s really about teaching them how to get more out of the money they already have.