Jeri Hawthorne

▶0:01HostWelcome to the Built by People podcast, where we share the stories and insights of the world's top HR leaders. Join us as we dive deep into the minds of HR executives, uncovering their strategies, challenges, and triumphs in shaping today's workforce. I'm excited to welcome Jerry Hawthorne, CHRO at Aflac, to the Built By People podcast. Jerry, as a starting question, I always love to ask you to tell us a little bit more about your career journey and some of the pivotal moments that you remember from it. And how those have shaped you into who you are today?

▶1:04GuestYeah, and that question always, it always makes me laugh a little bit because when I think about it, it makes me realize where I am in my life stage. And I sometimes, that's not always the best feeling, but, you know, I got into human resources in a little bit of an unplanned and back, you know, backwards manner. And, you know, when I started, it was really, less human resources kind of as it is today, and almost— I wouldn't say it was personnel management, but it definitely wasn't the science and the focus that it has become for organizations. I started in training and development, in cross-cultural training and development, and, you know, coming out of graduate school, and then moved into international human resources, which is a little bit unusual, working with expats and expat management and international assignments. So I started in a couple of pretty specialized areas and then didn't move into kind of general HR till probably about 10 years into my career. I took some time off for family and, you know, having kids and getting married and things like that. But I was probably at least 10 years in before I became a true business partner and kind of moved into that, the talent management and the model of HR that we, that folks know today as CHRO. So I was hired with the intention that I, if everything went well, that I would move into this role after a few years. The pandemic, of course, you know, bumped that around a little bit, changed everybody's plans. So it delayed it probably a little more than I think he, or I expected it to. But I've been in this role for almost 3 years now, leading HR for all of Aflac, all of our folks within the organization.

▶2:46HostSure. I know the focus of our conversation today is financial vulnerability and how it's on the rise. So I want to switch gears and start discussing that topic. And my first question is, how have you observed the shifts in financial vulnerability among employees, especially in the post-pandemic era, and what are the key factors contributing to that increase?

▶3:10GuestYeah, I mean, that— I think the key factors contributing to that Even though inflation has stabilized over the last couple of years, prices of goods and services and products continue to outpace wage growth. So that, combined with the fact that health and healthcare expenses go up about 8%, I think they're expected to go about 8% in 2025. And it's really that expenses are outpacing wage, wage growth. And so What we've seen here at Aflac is that, you know, our employees, like many, are having to make difficult decisions between things like, can I pay an out-of-pocket medical expense or go to the doctor, or do I put gas in my car? The Aflac Workforces Report, which is something that we've done for about the last 15 years now, we actually found that almost half of the folks we surveyed, employees that we surveyed, they don't have more than $1,000. They can't afford more than $1,000 for an out-of-pocket medical expense or a planned one. And so when I think about, you know, and I think it's an equivalent percentage, couldn't go one month without a paycheck, right? And so you've got this population, and Gen Z is probably impacted the most. They're living month to month. They're living paycheck to paycheck. And when you're living in that sort of environment, The stress that that can create, the anxiety that that can create, kind of the unknown that that creates because you really don't have any buffer for an emergency or an unplanned expense. And we've seen in particular folks have to make decisions, those decisions between, should I go to the doctor, should I do this, or should I make a payment on my credit card is an example.

▶5:03HostWhat specific steps have you taken to address the growing financial concerns of Aflac employees? And are there particular programs or initiatives that are designed to help them build financial resilience?

▶5:17GuestThere are. If you ask my employees, they would all just say, believe me, if I could, I think we would pay everybody more. What I do is to think about it through the lens of we need our employees to maximize the offer, to maximize savings programs, in the 401(k), in your health savings accounts, things like that, to become almost better educated consumers of the different programs and services that we offer in order to try to limit those unplanned expenses, right? So we have a big push around our wellness efforts. And the whole idea with that is it's not just about fun and fitness and, you know, getting people engaged and being healthy. From a business perspective, it's that health expenses, healthcare expenses are one of our top expenses as a company. And we know that the later people go to the doctor for health events, the more likely it is that those health events will be larger. That creates things like absenteeism that's more expensive for our employee. It's more expensive for Aflac where our, you know, when I talked to our CFO about our healthcare expenses, So all of those things tie together. So we have said, look, what we want to do is try to get in front of that as much as we can. And we want to educate. And we have— we really think about it through 5 pillars. So we have financial wellness, we have health, physical wellness, we have emotional wellness, social wellness, and spiritual wellness. And we've kind of taken a holistic approach to say, you know, we want our employees to be educated and/or to have access to information and services through any of these different pillars when they need and at a time that they need. But again, in the spirit of it, it's that trying to be preventative about that. So we would rather have, you know, we have a partnership with the Corporate Chaplains of America, EAP, that most companies have. We started this conversation, you and I, by saying, where are you based? And I said, we're in Columbus, Georgia. You know, I do my slots in Atlanta. We have a population here that would prefer to talk to a non-denominational chaplain than maybe to a traditional EAP. So having those chaplains walk around our call center so that when someone's getting off a difficult call with a customer who may have cancer or something to that degree, and they can turn around and talk to that chaplain, that is a preventative service. That's an in-the-moment, kind touch way to help that employee deal with that emotional stress that could then lead to other mental health issues that could then lead to physical issues and so on and so forth. So we've really tried to take it in all of those pillars through, hey, how do we get in front of this as much as we can to both save the company money, but mostly to help our employees to be well?

▶8:09HostThat brings me perfectly into my next question, and that is, how do you balance the need to support employee financial well-being with the company's own financial health? And are there any challenges or trade-offs that you're seeing involved in that process?

▶8:27GuestYeah, you know, I would say we're, we're in a really fortunate situation as a company where we're financially very stable, and, and we're an insurance company. And so it makes my job in some ways as an HR leader easier. Those two things because we want to be a premier employer when it comes to benefits because that's what we do. That's the core of who we are. Our CEO actually has a statement that is, if you take care of the employees, they'll take care of the customer and the company. And so, again, that makes my job easier because I have an executive leadership team that believes in helping take care of our employees. And knows that there are fiscal benefits to the organization. So for us, it's really a balance, and we do try to get creative where we can with things. So a good example is the SECURE 2.0 Act has created some different opportunities for organizations to help their employees from a savings perspective. One of those is around student loan assistance. So we actually have a program that we're starting in 2025 whereby if you have student loan debt and you're one of our employees, which we know more than half of our employees do, you can actually pay down your student loan debt rather than contributing to your 401(k). And then if you document that and demonstrate to us that you did that, we'll still put that— put the company match that you would have received had you put that money in your 401(k), and we'll do that at the end of the year. And so that's a way where we're saying to our CFOs, our, you know, my CFO and to our senior executives that we want to get creative to help our employees. We know that we know that we don't have unlimited resources. We're in a good situation and that we have good resources, but we don't have unlimited. But so what can we do to help our employees think about this in a way that they're planning both short-term financial stability and at the same time not sacrificing their longer-term financial stability. The other thing we do is, you know, we're a supplemental health insurance organization. Our employees are on supplemental policies. And supplemental health insurance— health insurance is not, is not created, was not created to cover all the costs of healthcare. It just wasn't. And as healthcare continues to rise, supplemental health insurance continues to become more important. And so, you know, we educate our employees on that. It's easier for us because it's what we do. But it's something that's very important because employees are actually— they're going to the doctor for a physical, they submit a wellness claim, they get $25. You know, that's a great thing. We educate them to say, hey, you know, we have this Marathon Anywhere app, which is our online healthcare provider. If you use this after 5 o'clock and, you know, because you're not feeling well, that's free. If you go to urgent care after 5 o'clock because you don't feel well, and you have a headache or whatever it is, that's $50. So, so we try to educate them. So we try to have a mix of offerings, again, from a preventative perspective that may cost the company a little bit. But we've made the business case to say, yes, it's an upfront cost, but down the road we're saving on things like production, we're saving on things like healthcare costs, lower absenteeism, lower turnover rates. All of those things tie together. And so that's how we try to— that's how we try to educate our executive partners. And again, very supportive because of the industry that we're in. But we try to work with them to say, yes, we're being generous, but we're being thoughtful and trying to be proactive and preventative in what we're doing.

▶12:14HostJeri, what role does technology play in your efforts to help employees manage their finances and Are there any innovative tools or platforms that you're leveraging to provide financial education and support?

▶12:27GuestYeah, so we have, I mean, like most companies, you know, we have all of the online educational tools through our online learning partner around, you know, 401(k)s, around health insurance, around the different products. And then our actual, the partners that we use, so our 401(k) partner and some of the others, they'll have online tools. For savings planning for the future, for different, you know, if you're just trying to decide which health policy you think you want, we have calculators. We have calculators to help you to determine how much should I be saving for my FSA on an annual basis. So we have online tools. I would like to say we're cutting edge with that. I would say we're probably right in the herd for where organizations are. A lot of our tools are intended to kind of get baseline, the next, let's get you in contact with someone either virtually or, you know, kind of via the old landline approach or even in person to have that conversation. The Aflac Workforces Report actually found, I think, that 3 out of 4 folks who are enrolling in benefits in 2024 said that they actually wanted to work with a benefit advisor. And so what we try to do is we try to leverage technology as an intro and then augment that with a human to help to answer those more technical, detailed questions.

▶13:50HostLooking ahead, what do you see as the biggest challenges and opportunities in addressing financial vulnerability in the workplace, and how can companies like Aflac continue to adapt and evolve to meet the changing needs of their employees?

▶14:05GuestYeah, I think it is, you know, a lot of organizations go through this process of trying to offer more and more and more. And we're not unlike that, but because we have a nice array of offerings for folks, I actually think it's really— the thing that organizations can do is try to help their employees to become better educated consumers of what they offer, as opposed to adding, you know, all of these different programs and services without a lot of forethought and tying them to something. And so, So I think it is, you know, so as an example, we have programs that when we decided to bring in a vendor or a partner or offer a certain type of wellness or offer a certain type of counseling, the chaplains are a great example, that's for a subset of our population. And we knew that when we made that partnership. And so it's really, I think it's about knowing your population, understanding who they really are, demographically, financially, education levels, etc., age, all of those things, who they are, what their wants and needs are. You know, the Applied Workforces report found that the sandwich generation, the Gen Xers, are kind of— they're taking care of kids and their parents. And so they're facing different challenges than Gen Z, etc. So what are those challenges? What do those folks have? And then when you bring in those programs and partners to augment that, really focusing on how you educate those population to become better educated consumers of what you're offering so that they're getting the maximum benefit. Because again, short of companies having unlimited resources to increase everybody's pay and/or, you know, pay 100% of costs of all health insurance, which again, I think everybody would love it. Companies could do that, but most of us can't. It's really about how you help these folks to become better, more knowledgeable, better equipped, and support them in how they're using these tools and services in the most economically efficient way at the appropriate time. So you're kind of doing it in a just-in-time way.

▶16:18HostAny parting advice that you'd like to share with other HR professionals as they navigate financial vulnerability in the workplace?

▶16:25GuestYeah, I think it is understand the nuances of the programs and policies, understand what is important to your population. I read an article about an organization that, you know, an HR leader made a decision to increase an out-of-pocket expense for emergency room care, and the employees almost revolted. And that's, you know, that's, it was a fiscal finding, and I'm sure it was one that they, that that person didn't think, or that team didn't think would have a big issue on their population, but it actually did. So my advice is know your population, know your programs and policy, become educated yourself, understand the financials and how it all ties together for your organization, and make sure that you're talking to your business partners, your financial partners, as in their language, as financial partners.

▶17:20HostGeri, thank you so much for joining us on the Built by People podcast. It was a pleasure having you involved.

▶17:25GuestThank you so much. I really enjoyed it.