With Kabbage, Kathryn Petralia upended small business lending.
She wants Keep Financial to do the same for compensation and employee engagement.
Petralia, who, with Rob Frohwein, founded Kabbage in 2008, said Keep Financial is based on many lessons they learned while running Kabbage, which was sold to American Express in 2020. They spent the most time on employee recruitment, retention, and compensation.
After Petralia left AmEx in May of 2022, she spoke with Frohwein (who left in December 2021) about his idea to bring new compensation methods to the marketplace. Companies provide earned wage access, but Frohwein and Petralia wanted to go further. Why not give them money they haven’t earned yet?
Keep Financial’s flexible compensation methods as a motivational tool
Even though personnel has many different sets of personal circumstances, they only get compensated in a few ways, Petralia said. Younger folks are paying off student debt, saving for a mortgage, and planning families. Older ones want to help kids with college and ailing parents.
By providing more flexible compensation options, Keep Financial is helping companies attract, retain and motivate their best personnel. Maybe it’s a cash bonus that vests over four years. The employee gets it all so they can pay off that debt or put down a mortgage. If they stay the four years, they don’t have to repay a cent. If they leave early, they return a percentage based on their departure date.
“I think it is important because everybody’s not the same,” Petralia said. “We all have different needs, and we’re all willing to take different levels of risk. And we all have different levels of financial baggage coming into our jobs.”
KEEP Performing adds flexibility
In early December, Keep Financial introduced KEEP Performing, the newest addition to the Keep Employee Engagement Platform (KEEP). It lets employers create “performance challenges” that can be attached to an employee’s vesting cash bonus. The vesting timeline can be accelerated if the challenge’s defined goals are met.
Stock options aren’t for everybody, especially right now. They may take a while to accrue value if they ever do. But cash is cash. It has present value and is easy to understand.
That’s an important motivator at a time when only 20% of employees say their company’s performance management system drives them to excel (according to Gallup research). By gamifying that engagement, companies can see 21% higher profitability, 41% lower absenteeism, and 17% more productive employees.
Petralia said that activity is tracked through the Keep Employee Engagement Platform, which simplifies administration and tracking. That ease of use also helps companies effectively address the growing issue of compensation equality and equity.
“The reason employers haven’t done this before is… because they haven’t had a tool to do it,” Petralia said. “It’s really hard to know that if you provide compensation in return for commitment, you’re going to get the commitment or get the money back. It needs to be compensation that actually works.
“And that hasn’t existed until now.”
Plenty of room to grow
Looking ahead, Petralia envisions more integrations with human resource and payroll platforms, making it easier for HR professionals to manage their systems. There are some additional plans in the works too.
“We did a survey asking employees what they want from their employers, and financial advice is near the top of the list,” Petralia concluded. “People are really hungry to understand what they can do to maximize their financial situations based on their current income and future plans.”
