Join us for a 30-minute fireside chat with ZayZoon's President and Co-Founder, Tate Hackert, to explore the latest trends in employee financial wellness, including:
- The rise of financial stress and its impact on productivity
- Shifting employee financial priorities
- Generational differences in financial well-being
- The hidden costs of financial stress in the workplace
- The link between financial and mental health
- Why financial wellness programs are a smart business investment
Transcript:
Alyssa Place (
Hi everyone. Welcome to our virtual Summit Financial Wellness, the Foundation of a Stronger Workforce. I'm Alyssa Place editor-in-chief of Employee Benefit News, and we're so happy to have so many of you here today to dive into the challenges employers and employees alike are facing when it comes to their financial wellness. Thank you for joining us and thank you to our supporting sponsors, Ramsey's Solutions, tap Check and ZA Zoom. We're grateful for your partnership in making today possible. Some staggering statistics to start us off today around where employees are at with their financial wellbeing. According to a 2023 report by Bank of America, only 42% of employees would rate their financial health as good or excellent, A 10 year low, and between 60 to 78% of all Americans are living paycheck to paycheck. As employers consider their values when supporting their workers, it's clear that simply offering a paycheck is not cutting it.
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Today we're going to explore the elements of an effective financial wellness program, how to navigate the stress and uncertainty of today's economic landscape on your employees and your business and tackle solutions that span a multi-generational workforce. I'm excited to dive in and I'm looking forward to interesting conversations and discussions with all of you. We have some brief housekeeping items. This event is SHRM certified for up to 2.25 PDCs towards SH RM CP or S-H-M-S-C-P recertification. To earn that credit, attendees must log into and attend each session in full, participate in session engagement and complete and submit the evaluation form by Monday, April 28th. The form will be available after the first session on the event website or on the main page of the attendee hub. You'll only need to complete it once for all sessions. Certificates will be emailed within two weeks post-event by horizon. We also have a variety of free resources available to you today.
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In the resources section of the attendee hub, we've added resources for each session. ZA Zoom has their state of wellness report, nudge has its planning and launching a financial wellness program, and summer is providing an overview of student loans. Lastly, feel free to engage with our sessions by sending questions via the chat. We do have a lot to cover, but we'll do our best to answer as many as we can today. We'll hold responses until the end of each session. If you have any other questions or need help, please use the chat, but don't send it anonymously. My colleague Heather, is managing both chat and q and a and won't be able to respond without knowing who you are.
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To kick off our event today, I'd like to welcome Tate hacker, co-founder and president at ZA Zoom, who will be joining me for a fireside chat on the state of employee financial Wellness. Za Zune is an employee engagement platform focused on providing earned wage access, financial wellness and recognition programs to help empower employees and motivate workplaces. As a pioneer in earned wage access, Tate founded Zazen as a way to combat payday loans while still giving people relief between paychecks. ZA Z's product allows employees to instantly access their earnings ahead of their regularly scheduled payday without debt or egregious fees. Today, more than 6,100 businesses across the US leverage ZZ to reduce employee financial stress and improve key organizational metrics such as productivity and retention. Welcome, Tate. Thanks for joining us today.
Tate hacker (
Hey, thanks for having me.
Alyssa Place (
So let's dive in and let's level set a little bit. It's obviously a really challenging financial time for many employees and Americans in general, and it's likely to get even more challenging with various economic circumstances like tariffs and continued layoffs and things like that. What kind of impact is this having on employees and their ability to afford their day-to-day expenses and also save for the long-term future?
Tate hacker (
Yeah, we discovered a long time ago that there's two things. There's an income issue and there's a cashflow issue. Many times it does end up being a cashflow issue where simply bills just aren't lining up for individuals and they're trying to find different ways to accommodate the expenses that they have. They can do that in a couple ways. They can use a product like earned wage access, they can use credit if they have it available, but all of these products, and this is coming from someone that is in the industry, all of these products are really reactive versus proactive, and it's okay. It's okay to sometimes have a proactive solution and be able to find that relief between paydays, but ultimately we need to figure out how can we get people in more of a proactive approach. Their finances, like you said, 60 to 70 or 60 to 80% of individuals, depending on what stats you look at, are living paycheck to paycheck. And again, some of that is due to cashflow. A lot of that is also due to income and the inflation that we're seeing and the cost of living is rising. And so I think as employers and as HR professionals, there's certainly a huge area that you can play to increase the financial lives of your employees. And that doesn't always just mean increasing their pay, but it can mean giving them the available resources or tools to help their money go further.
Alyssa Place (
And when someone is getting their paycheck and is spending every last cent or sometimes spending more than they actually have, that's obviously a very stressful situation for many people. And we've been talking so much over the last couple of years about the importance of employee wellbeing and employee wellness. Let's talk a bit about financial stress and the toll that takes on employees. How does that manifest itself in the workforce and trickle down throughout the business as a whole
Tate hacker (
Wheel? We learned early on that financial stress and actual physical health are so closely correlated. Some of our very first customer testimonials and customer use cases were around individuals wanting to buy medication, needing to buy medication. And so for us, that was this really interesting moment where we go, oh, this isn't just for whatever other necessity and obviously medication's a necessity, but we had these preconceived notions that people were accessing their pay early for various other things. And it turns out that one of the main reasons people access their pay is actually to combat the physical health side of things. And so I just find that so interesting how closely correlated they are. And of course we know that those that are financially stressed, they don't show up to work as much, they turn over more from their job. They're in that constant state of fight or flight where they're looking for the next thing that maybe they can go across the street for 25 cents an hour more, which by the way might not always be the best decision.
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And so yeah, I definitely think that there is this compounding effect where someone that's financially stressed ends up having sort of a large sphere of influence within a workplace where it affects the productivity, retention and overall morale of that employer. And so as an employer it's like, well, how do you combat that? It's a super, super difficult thing to do, but I do really think that it's about providing that short-term relief to an employee through a reactive solution and then ensuring that you're following up with proactive solutions and not just checking the box on these items, but you're actually providing solutions and ingraining them and embedding them into your culture to the point where employees know where they are, know where those benefits are, know how to access them, know how to take advantage of them. That's a huge thing that we see missed very often with our clients, but also internally at zz.
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Right? ZZ is a small business in and of itself. We're a couple hundred employees. We have benefits of course for all of our staff, and it never ceases to amaze me when there's a financial struggle. It does happen. Of course it happens even at a financial wellness company when there's a financial struggle and someone's asking like, Hey, we need this sort of resource available, or I wish we had financial counseling or I wish we had this. And it's like, we do have this, don't you remember we presented on this four months ago? But that's exactly it. We presented on it once four months ago and totally forgot about these individuals living their day-to-day lives and not being able to keep all these things top of mind. And so it's really important to take those resources and continually, I guess, ingrain them into the culture of your organization. Yeah,
Alyssa Place (
I think it's really interesting and thank you for being transparent about that. This is even something that you struggle with as a leader. Can you share a bit your approach as a leader? How are you combating that sort of forgetfulness or it's too much information for employees to take? How are you doing that at Z Zone and how would you counsel other employers to keep those benefits top of mind and accessible and available all the time?
Tate hacker (
I think the first thing that you need to do is determine whether the benefits that you're providing are the correct ones or not. To begin with, I'm going to say check the box often probably, and it's because I so often see employers literally check the box. They go, okay, well, we need this. Okay, we got this check, it's done. It's out of my hands. We're offering it all as good. But the truth is, is that actually what your employees need? How does this differ from your competition? Just because one organization has one set of benefits and another organization has another, it might not be the same as what you need based on the demographics, based on where in the country you are, et cetera. And so I think first just understanding what's actually needed. We do that at Zazen through intensive surveys, feedback mechanisms, and then also just making sure that it's part of one-to-ones that ultimately gets surfaced back to people team.
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And so I think all of that stuff is important to actually understand what your people want and what they need and what you need as a business to stay competitive. So that I guess is step number one. So then assuming what's actually required and what you think is going to at least cover the 80 20 of your workplace, and the more you can close that 20% gap, I think the better just because it allows for more and more customization and really hitting home with your staff. But once you sort of have that 80 20 covered, then yeah, it's about selecting that provider and then ultimately to your question, how do you keep it top of mind for them?
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I'll use Zune as an example. Again, just again, we're a couple hundred employees. We do this crazy thing called the daily standup, so we're fully remote and yet every single day for 15 minutes, we have the entire team, all 200 of us on a Google meet. And it sounds like chaos, it's not, it works beautifully, but part of that 15 minute meeting is announcements period. And so we use that announcements period to really act as that town hall for speaking of the new benefits. I think it's really beneficial to not just speak to the benefit, but also use an example of how it's been used and then reinforce that in proceeding if we have this health spending account feature, and if I go and use my health spending account as something as co-founder and president of this company, I'll use my health spending for something and I'll post in Slack like, Hey, super stoked that we have this. I just used my $500 for this and it's a good reminder. It's a good contextual setting. And I think that's what I mean by ingraining into the culture where it just becomes part of everyday communication where people know like, oh yeah, we have that, and Oh yeah, I could use it for my rock climbing shoes because I saw our co-founder do that. So hopefully that helps. I don't know if that fully answers what you're looking for.
Alyssa Place (
Yeah, I mean, I think that brings up another point. One of the challenges that benefit leaders and benefit managers are having right now is that one employee might be using their stipend for rock climbing shoes. The other might be using it for childcare. Financial needs are so different depending on where you're at in your phase of life. So I'd really love to get your thoughts on how to find the balance between what is it now five generations in the workplace and all of those different needs. I know it's important not to have a check the box solution, but how do you find a solution that's not checking a hundred boxes because those are all the individual needs that people might have. Have you experienced that challenge at EZ Zoom and how are you overcoming that either with the product and also in your company?
Tate hacker (
Yeah, it's super tough, and this probably sounds very familiar to everyone on the call. Our youngest employee is probably, I don't know, 22 or so, 2023, and our oldest is, I don't know, close to 60 if not 60. So you're completely right. It's difficult to provide benefits that are going to check the box for everyone. I think that goes back to that 80 20 principle. You're never going to make everyone happy, unfortunately, but it's just the truth. One thing that we've tried to do is we've tried to be more generalized in some of the benefits. And so I think the spending account, the health spending account is a really good example of that. So instead of trying to litigate and really go through the process of, well, should we have this much for massage, massages and physio and well then some of our employees wear glasses and so we want to make sure that we have a good eye plan, et cetera, et cetera.
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That stuff can all exist still. But then to sort of cover the outlier cases and as well as give the majority even additional benefits you can put in place is just generalized health spending plan that then allows people to be really flexible in what they want. And I think that flexibility is super important. Going back to the beginning of the intro there that you gave we're in the earned wage access industry, earned wage access is 100% about flexibility. It's about providing employees the power to get paid when and how they want. And I think that's so important. And as a first principles or principle thought process as you're planning out a benefits solution or just planning out workplace engagement, I suppose to me, flexibility is that first principle's, core thinking that you should really have just to ensure that your employees can take control how they see fit.
Alyssa Place (
And just to steer it back to the financial wellness aspect of this, I had read somewhere, and I might be getting the stat wrong, but close to 98 or almost a hundred percent of employers have said it's really important for them to provide benefits that address the financial wellness of their workers. I don't know off the top of my head how many actually do. So why is this an area that employers are so invested in and why should it be an area that employers continue to be invested in?
Tate hacker (
Yeah, I don't know a lot of these stats super well, but I do know this stat because it comes out of our employee financial wellness report that we did earlier this year or maybe late last year where we surveyed thousands of HR professionals and employees. And yeah, it was 96% of employers believe that financial wellness benefits boost satisfaction retention, but for whatever reason, only 30% actually offer any sort of program. And so I think was your question, why aren't more offering that or am I taking that and making it up now?
Alyssa Place (
Yeah, I guess the question is why is that gap so huge and how can we start to close it?
Tate hacker (
So my belief is kind of twofold. So one is we talked about the need for you to really understand what's actually required. And so when we say financial wellness benefits, well man, there's so many of those. And so it's almost this paradox of choice that's just anxiety inducing where you're like, what am I going to do? There's so many of these, you know what? I'll just ignore this and kick the can down the road. And so I think that's part and parcel to not actually knowing exactly what's required by your employees. And so that goes back to our comments around getting the appropriate feedback input from the workplace to figure out what that is. So that's one. And then the second piece of it is once you actually know what's required, it takes time and energy and dollars in a lot of cases to put these programs in place.
(
And I do think that there's a lot of financial wellness programs that have existed and that do exist that are viewed as arduous and expensive. And I think upon a little bit of research, employers can find that I'll use earned wage access. An example, again, earned wage access is free for the employer. But then the second thing that comes up, and this is a huge, and the reason I say this is because I think it could potentially help certain employers change or HR professionals change their mindsets, but one of the major objections we get as a company is, oh, earned wage access, so that means it's going to affect our payroll. And I remember the last time I did something with payroll, it took three months to get through and there's this full ERP implementation and they just related to this very convoluted, confusing, time consuming structure when really it's not at all.
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It's a flip of the switch. It's on within 15 minutes and it's completely set it and forget it for the employer. And there's a lot of benefits like that. They just need to be surfaced appropriately and sought out or come to you. And so I think I would say if you're of the belief that offering financial wellness is difficult, I know for a fact that it's not, and there are lots of solutions that are extremely turnkey and hands off and easy, and so that at least tackles that side of the thing, and that really just leaves you as an HR professional to go through and figure out what's the 80 20 of what my workplace needs.
Alyssa Place (
Yeah, I think another misconception that perhaps some workplaces have is that it's not really their role to teach basic financial education or to be in the business of how employees are actually spending their money and if they need help getting that earlier for whatever reason. Can you talk a little bit about that kind of bridging the personal and the business side and how financial wellness fits right in the middle of that?
Tate hacker (
So I think that it's foolish for an employer to believe that they don't need to live within that employee's financial life. Of course, the major component of employees financial life is their salary, and the employer is very much involved in that. However, I did a presentation recently on the comparison or the analogies of gig work and the desk list workforce. And so a lot of clients that we go with, they're in the manufacturing space or quick serve, restaurant space or home healthcare. So a lot of desk lists not in the office workers. And the gig economy is really interesting when you look at what they provide to the workers, they provide flexibility. They provide flexibility in the form. Of course, you can pick your own shifts and work when you want and how you want, but you also can get paid on demand in most cases every single day.
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Uber, for example, allows you to access your pay up to five times a day. They provide banking services, they provide financial counseling and health courses for employees. There's a lot of things that gig economy platforms have taken and really consolidated into a single app experience for the employees or for the contractors, for the gig workers. Why that's important is because that's who your competition is as an employer. And so if you're thinking that I don't need to cross that line and be involved in my employee's financial life, well, I would say that the gig economy is expected to we by 2027 or 2028. I think I could be off slightly on that stat, but in any case, it's expected to grow immensely. And so if you're not offering those benefits and being involved in those employees financial lives, your competition is. And so I think that's just something to think on.
Alyssa Place (
And when you look at your competition perhaps, I mean, what are some of the emerging financial wellness solutions that are really cutting edge or pushing the envelope a bit? What are some of the emerging trends that you're seeing as you're looking at what employers are asking for and what would move the needle on financial wellbeing for people?
Tate hacker (
So a big trend that I'm seeing is there's these workplace rewards programs. So that's a big one, just being able to extend the wallet share of an employee by giving out rewards or gift cards that have a bonus attached to them. So we're seeing that both in the nature of earned wage access, where an employee can access their pay early, they can choose to access their pay sometimes in the form of a gift card, and that gift card actually is a bonus attached. So it not only is giving them flexibility, it's also giving them extensibility in their income, but it doesn't have to be tied to that earned wage access program either. So we're seeing these perks, marketplaces and rewards and recognition tied to gift card solutions as being really sought after and sort of popping up more and more, and especially workplace recognition that's given in contextual settings.
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So being able to personalize that gift based on what you actually know about the employee that you're giving it too, I think is really important. The second piece, of course, is earned wage access. It's completely exploded. If you go back to 2019, Walmart adopted earned wage access and that was sort of this initial big beachhead employer. And the trickle effects from 2019 to now have been immense because Walmart does it. Every other big employer wants to do it. And then there's solutions like ours that come in and help the SMB adopt that same technology that the enterprises have. So I find that really interesting and very topical, and obviously it's an industry that I'm a part of and it's moving so quick, it's just so exciting. And then the last thing is the health spending accounts, but done in a really smart way. And so I'll use AI in quotations because we all have a different understanding of AI and its abilities and how it's used, but using AI to effectively match your spend on certain things and make that health spending completely automated and seamless for the employee and for the employer, I think is the future wave for the next couple of years here as well.
Alyssa Place (
Great. We do have some questions coming in and I want to leave time for that, but I just wanted to sort of finish our conversation with going back to what we were talking about at the beginning, all those stats of paycheck to paycheck and people are so burned out. What keeps you optimistic about financial wellbeing and what kind of motivates you to keep innovating in this particular space?
Tate hacker (
I mean, me personally, I'm an entrepreneur and entrepreneur's job is to continually solve problems. Financial health has always been an issue, and so there's always a problem to solve there. I believe that it just kind of got accentuated throughout covid. I have this theory that prior to covid finances in the workplace were more taboo post. I mean, you're sitting there on a zoom meeting with your boss and you're both in your pajamas. It's sort of this leveling effect where I think it all of a sudden brought finances to the forefront, or at least it made it less happy to talk about, because again, everyone's sort of on a level playing field, at least perception wise when you're both sitting on that zoom meeting. So yeah, I think what keeps me really optimistic is employers are seeking it out now, like you said, 96% of employers recognize that financial wellness can help with workplace retention. Sure, only a third are using it. But to me, that gap between that third and 96%, that's a problem to solve, which is super exciting. And I believe us in particular, we have a great solution that those 96% can adopt turnkey and at least solve part of the financial wellness in the workplace problem.
Alyssa Place (
Great. Alright. We do have some questions from the audience and of course if anyone else would like to add their questions, we'll be spending the next 10 or so minutes doing that. Let me pull these up. Alright, we have a question that came in. Do you have any early results from this year's survey? And do you expect to see any changes in financial stress due to the overall state of the economy and the world?
Tate hacker (
That's a great question. I do not. It's probably something that I should have grabbed, but when that is released, I'm sure we'll do a post on the differences between last year and this year. I know that we did that the year prior and then kind of more macro based. Yeah, I mean we're seeing, we have this free tax filing product and through that we're able to get some insight on tax filings and we refund rates and all of that. And what we're seeing is refund rates have increased this year. The number of tax filings have increased this year. And so in theory, that should mean less need for short-term liquidity options. If people are getting refunded more and their refund is 5% greater than it was last year, we should see the effects on our business in that way. And we have seen that in other years where tax return season comes the need for short-term liquidity, the need for earned wage access drops and it drops off for a couple months and then it comes back This year, that drop was a lot less and it was for a lot shorter period of time.
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So that tells me, even though people are making more money, IE getting more tax return, it's not going as far. And I think that's pretty common knowledge cost of living is rising and wages aren't rising at the same amount. And we're definitely seeing that in our data.
Alyssa Place (
I only got a dollar back from taxes, so I will not be spending that all in one place for sure. Another question we have, you mentioned earned wage access, obviously. Do you find that not only hourly workers are accessing their wages but also exempt employees?
Tate hacker (
So yeah, we see employees of all demos use our service. It's definitely more predominantly hourly workers certainly. So it's probably about 70 ish percent hourly. But yeah, employees of all demos are using it. And that goes to income levels as well, right? About 12% of our customers make more than a hundred thousand dollars a year. And so it's not always reserved for the individuals who we would historically think of as living paycheck to paycheck, but there are high income individuals that also live paycheck to paycheck and use our service.
Alyssa Place (
Yeah, that's interesting. I have a follow-up question for that in terms of why hourly workers are more likely to use that, do you have any insight into why an hourly worker might need their paycheck earlier than someone who has a more set schedule with their paychecks coming out?
Tate hacker (
Yeah, just variability to pay. So you can think of earned wage access as an income smoothing product where someone can sort of, when they're down a little bit, they can pull from it and when they're up, they don't need to pull as much. Bills come you're paid on the 15th and 30th, say, well, your bills are coming out on the third, fourth, eighth, 18th. It doesn't line up. And so they use it as this pressure release valve. And so there's just a lot more variability in an hourly workers' life.
Alyssa Place (
Interesting. Alright. Another question we have, and you touched on this a little bit earlier, but what voluntary and fringe benefits can employers offer that go beyond the traditional healthcare vision, dental and 401k plans?
Tate hacker (
It's a good question that I don't have a great answer to. I spoke a little bit about what we offer at Day Zoom. Yeah, I could definitely pontificate a little bit, but I'm not going to have amazing answers that are going to go beyond probably what a lot of the professionals on the call already have knowledge on.
Alyssa Place (
Sure. For Zazen in particular, in the current economic environment, what are you doing to ease any employee angst that you're experiencing or hearing about?
Tate hacker (
Yeah, so we do a couple things. One, we do biannual compensation reviews, so that doesn't mean that bi-annually individuals are getting raises, but it does mean that we're looking at their salaries or their wages in comparison to market. And if there's a great departure from market, we will adjust and give raises, and we do that again twice a year. So that's one thing. The second thing is just continuing to get that feedback from employees and having that really open stream of communication so that we can adjust our benefits packages for that reason. And then thirdly, we of course have zazen in-house and that means they have access to their pay went early when they need it, but then they also have access to our financial education courses and our rewards and recognition tool, and they can send gift cards and things like that. So those are some of what we've implemented in the last little while.
Alyssa Place (
Great. We have another question about the survey. Can you share any connections that the survey has made between financial stress and mental health and what the correlation is and how that improves as financial stress lessons?
Tate hacker (
Yeah, so we know that financial stress definitely impacts workplace morale and mental health. I think it was almost 80% of these individuals were reporting that their financial stress impacts that. And then 84% were saying that financial stress is actually leaving them exhausted and burnt out, which I would argue is, or in a similar vein at least, of mental health issues. And so yeah, ultimately there's a ton of findings in there. If you haven't fully read this survey or haven't fully read the report, I highly encourage you to because yeah, it was eyeopening for all of us at zaine and it was one of the first times that we've actually gone out and surveyed not just our clientele and our customers, but we went out and pulled a bunch of non zian clients and customers as well, or non Zoom clients and employees I should say. And so yeah, it was quite eye opening in that regard. I think there's a second part to that question, but I'm not recalling it at the moment.
Alyssa Place (
I was asking about as their financial wellness improved, did mental health improve as well?
Tate hacker (
Oh, got you. Yeah, it certainly does. So we actually have, I don't know if that's in the survey or not, but we have ran just surveys inside our own environment app. Yeah, so there's a definite correlation. There's a correlation with using earned wage access and a reduction in payday loan usage and overdraft usage, which then gives you a reduction in costs or gives you, I guess cost savings. But we absolutely do see those that are using earned wage access report having a lower rate of financial stress than those that aren't.
Alyssa Place (
Another question is based on your work with employers, what is the most typical financial wellness benefit offered to employees these days and what is the one being asked for the most?
Tate hacker (
So there's sort of like your typical, your 401k matching plans and stuff, and I think that's something that we're all likely familiar with. If I was to focus on benefits 2.0, it really is like that earned wage access piece that's super desired now. And again, that's driven by the larger organizations like a Walmart or a Walgreens offering it. And then it's sort of the trickle down effect to everyone else. So we've seen a shift in the market from us needing to sell hard or go out and really capture business to now that business comes to us. And so I think that's a really good indicator of a maturing market and sort of a market that's crossed that chasm into the early majority, and people are really seeing value there.
Alyssa Place (
Interesting. We have another question here. Have you seen much interest in employees seeking home purchase financial education? And if so, do you have any tips on the right approach to providing employers with a solution?
Tate hacker (
I haven't personally. That's really interesting though. So I guess that would just be they're looking to buy a house or they're looking to eventually buy a home, and there's sort of the steps that they're looking to get educated on that way to home purchase. Interesting. I haven't seen it anecdotally or specifically, I guess in my workplace or with our customers. We do have an education course with, and part of that is inclusive of a home buying course and tool set. There's a mortgage calculator and saving for your first home and all of that. I don't know the stats off the top of my head. I can definitely, if you want to ping me on LinkedIn or my email or whatever after this, I can actually look at our stats and give you the specifics of how much that course is getting looked at versus others. But yeah, I don't have that off the top of my head.
Alyssa Place (
It's your next business idea.
Tate hacker (
Yeah, exactly.
Alyssa Place (
All right, great. So we're almost at time. Thank you Tate so much. This is super interesting. I learned so much. I hope everybody else did too at this point. Attendees, you can exit the session and you'll return to the main page of the attendee hub and we'll take a short break after 10 minutes, log back on and we'll get started with our next session.