This June, financial technology banking company Chime Financial Inc. made a bet on a new form of employee savings program with the acquisition of a startup offering hourly workers an automatic savings program outside of a 401(k).

Chime purchased Salt Labs Inc., founded by benefits entrepreneur Jason Lee, to bolster its employer-based offerings with a rewards program “focused on helping hourly workers own the long-term value of their work.”

Salt Labs, which Lee started in 2022, gives employees “Salt” for every hour they work. Salt can be used for a variety of different options set by the employer—whether a weekend vacation, a gift card or to put money in an individual retirement account.

Sam Falletta, CEO of Incept LLC, an outsourced customer service call center, had been using the Salt program before Chime’s acquisition. He says the program, which had been met with some skepticism by his leadership team at first, has been working well among a workforce that can be notoriously difficult to engage.

Sam Falletta

“It is a more interactive way to think about financial management,” he says. “It’s just practical enough to be used as a day-to-day thing, but it’s also not stuffy. It’s not the same thing your parents would be doing [to save].”

Falletta had met Salt Labs founder Lee when the entrepreneur was at his first startup, DailyPay. Falletta had been interested in work Lee was doing giving hourly workers access to money to pay for daily expenses that did not involve raiding 401(k) plans or taking out personal loans. When he found out about Lee’s next venture, Salt, he was all in to bring it to his call center workforce.

“I really liked this concept of people being able to earn their way into savings in a way that is accessible—but not so accessible that they might waste it on bad decisions,” he says.

401(k) Add-On

Lee noted to PLANADVISER in an interview prior to the Chime acquisition that he has been a student of the 401(k) savings system and felt it wasn’t serving hourly workers enough. Ted Benna, known as the “father of the 401(k),” became a strategic adviser to Salt this April.

Falletta had felt his company’s 401(k) program was not a great differentiator for his employee base. But before implementing the “out-of-the-box” Salt rewards program, he had to convince his senior leadership team. He says he leaned on the idea of creating a benefits program that could improve employee retention—a common struggle in the call center business.

“For this industry as a whole, turnover is a monster,” Falletta says. “COVID, for most of us, made that even worse because it made engagement so much more difficult. … Every little bit of engagement helps when you know that you are not just competing with the four employees in your region, but the 500 job opportunities open to remote workers.”

Falletta uses the example of an employee who always wanted to go to Coachella, a multi-day music and arts festival. It never seemed realistic for them to build up the savings to go—but via the Salt program, saving up awards for a Coachella trip could “become a reality.”

For those with less specific goals, Salt can go toward more direct monetary value such as an Amazon gift card.

Retention Tool

An interesting result of the program, Falletta says, is that employees actually tend to forego initial Salt withdrawals in lieu of building up their savings even more.

“It’s a much smaller percentage of redemption than I would have expected,” he says. 

Meanwhile, the program appears to be accomplishing its main goal: employee retention. Since implementing Salt, the firm reports a 61% improvement in tenure.

Falletta says he likes Salt for two additional reasons: One is employee engagement with the program due in part to what he sees as its “gamification” of savings. About 78% of his employees have signed up for the program.

Second, on the business side, Falletta sees the rewards program as providing “outsized value for the investment.” The Salt team, he says, manages the program, including creating bullet points to send to new or existing employees. 

One surprising element of the program, Falletta says, was that it did not stay with just his hourly workers. After seeing it in action, his salaried supervisors also came knocking.

“The supervisors came back asking why they were excluded from the benefit,” he says. “So we went back to set it up so salaried employees could mine the same benefit.”

Chime and Lee, meanwhile, will continue to seek more employers for the program. Along with the acquisition, Chime has launched a new enterprise division led by Lee. The unit is focused on “accelerating Chime’s growth through the employer channel,” according to its June release.