Technology has changed so many things in the workplace, from the way we communicate, to how we get things done. It was only a matter of time before HR and benefits evolve as well. Avi Karnani, CEO of Alice, is changing the way employers and employees manage their benefits by automating pre-tax spending on benefits like healthcare. He joins us to discuss everything from current tech trends, to the best ways to encourage tech adoption at work, to AI’s role in the future of HR.
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Brandon Laws: Hey, Brandon here. Welcome back for another episode of the Human Resources for Small Business podcast. Hey, we have a guest coming up in a few episodes, Erica Keswin. She is the author of a new book called Bring Your Human to Work, which is really popular right now. So I’m excited to have her on the podcast.
In gearing up for that episode, I want to do a book giveaway of her book and I want to do that for anybody who would give an Apple Podcast review or Stitcher review and I will do a drawing out of that for three books. So go give us a review. Screenshot it. Shoot me an email or a LinkedIn message with a screenshot of the review that you provided and I will put you in a drawing for one of the three books that I will give away. For her book, Bring Your Human to Work.
OK. So on to today’s episode, I have a conversation with Avi Karnani. He’s the CEO and co-founder of a company called Alice. And he is in the tech space and they’re really transforming the way employees would interact with benefits and things of that nature.
So we really have a whole conversation about how technology is really forcing employers to think about how employees are interacting with them as it relates to communication, payroll, benefits, anything like that, that’s really people-oriented.
Technology has really given us the ability to reduce administrative tasks or the burden that it places on us and it’s just really fascinating. So he’s a wealth of knowledge in this space and I am a geek – I’m not afraid to admit that. So we have a really fun conversation and I honestly could have kept going for an hour or more or so. But in the sake of just keeping this to more of a commuting type of podcast, where it’s like 25, 30 minutes, I definitely had to cut it short.
But I think you’re really going to enjoy this episode. I know I did and let me know what you think about the podcast. Give us a review or shoot me a note. Connect with me on LinkedIn, Instagram and all those places. So enjoy the episode.
Brandon Laws: Hey Avi. It’s so great to have you on the podcast. Welcome.
Avi Karnani: Thank you. Thanks for having me.
Brandon Laws: Yeah. So you’re in the tech space and I want to pick your brain on where things are going as it relates to people practices for the small and medium-sized or even medium and large businesses. I think that technology is invading every aspect of people’s lives right now and I think expectations for really good technology is just ever present in our lives right now.
I think as employers, now they’re having to really make a shift – applications, communication tools. Even five to ten years ago, we didn’t have really any of this stuff as it relates to today. I wanted to know from your perspective. What is the trend right now as it relates to technology and what employers need to be providing their employees from either a communication standpoint or even on some of the people practice stuff – paychecks and performance management, things like that? What’s your perspective on that?
Avi Karnani: You know, the thing that sticks out to me is – the short answer is – employees are – they expect the way they interact with their employer, and the tools that they have from their employer in an HR context, look and feel a lot like what they do on their phones as consumers.
So I think there’s a sort of closing of the space between like how – I don’t know, like Instagram or an app on your phone functions and what you expect of your staffing app or your company communications app or your HR benefits to sort of look and feel like.
The idea that there’s a great consumer experience in one part of your life and in the other, you’ve got like forms and paper and maybe more paper stuff.
Brandon Laws: Yes, yes, exactly.
Avi Karnani: I think it’s going away. There’s this data that I saw the other day that kind of blew my mind. It was the sort of first time in American history that there are sort of five generations in the workplace. So you’ve got post-boomers, baby boomers, Gen-X, Gen-Y and millennials.
Really quickly, it’s going to go back to sort of two or three again because the post-boomers and the boomers are going to retire. Gen-X is going to be the sort of aging guard and you have post-millennials coming and these are people who grew up in like a digitally native way, to use that buzzword.
I still remember like playing baseball outside of my house when I was seven years old and like maybe the best thing we had going for us was like Atari or Nintendo. I think it was Nintendo back then and you just sort of – the world is different and you’ve got people today who are entering the workforce and they’ve always had a device. They’ve always had text messaging and they’ve always had these interactions that they’re used to as consumers. So it almost doesn’t make sense why there wouldn’t be that at your workplace.
If you don’t have that, then maybe you should be wondering if you should work there, right? Like a sense of – I love this idea of ambient belonging where people get a sense – people have a pretty good sense if they do or don’t belong somewhere from the environmental cues and the interaction cues of being there. So if you’re like a digital native post-millennial and you’re working somewhere where they have like lots of forms – that probably feels wrong.
Brandon Laws: Who would work there? It sounds archaic and not progressive, whatsoever. I resonate with everything you said there because I think about, OK, my buying behavior. This is true about most people, right? They’re comfortable with Amazon. The one-click, purchase anything you want that you could imagine and I think the expectations of like you can get basically anything on demand and just the user experience is so flawless, that we almost expect that now in every part of our lives.
Employers quite – like really aren’t quite there yet. There’s a lot of amazing tools that are making their way into the HR space but I don’t think we’re always experiencing that because you just said that there are forms and people just cringe at that, right?
Avi Karnani: I think there are two ways to sort of interpret that reaction, which I 100% agree is what people are thinking about as employees in a workspace. I think one reaction is, is say, “Hey, you know what? That’s really entitled. Just fill out the form. It will be fine.”
Brandon Laws: Yeah.
Avi Karnani: Like what’s wrong with you? I think the other way to look at that is people are – people want to know that where they’re going to work values kind of who they are and the contribution they’re making and it’s sort of the little things. Like if a company can’t be bothered to have a decent way to communicate with you or an easy way to sign up for payroll and benefits or like clock in and clock out of work, then maybe they don’t care as much about what you’re contributing. And maybe that means they don’t care as much about who they are in the marketplace and who their customers are, what kind of experience they’re providing out in the market.
I think that sends a really strong signal and you almost want employees who look to those cues because those are going to be your contributors.
Brandon Laws: Well, it’s interesting. I’m on the marketing side of the world and care deeply about the client experience. But the employee experience should really be thought of no differently, right? I mean especially in the labor market that we’re in, where it’s just – finding talent is hard and the unemployment rate is really tight right now. So finding people is a challenge. Well, wouldn’t you want every aspect of the people side to be completely a great experience …
Avi Karnani: Yeah, like let’s keep the people we have.
Brandon Laws: Yes. Are people comfortable using a lot of the technology that we have nowadays? So like there’s – let’s say an employer made an application or they’re rolling out some new communication tool or even texting. Like our – do you think the trends are saying that people are really comfortable using things like that?
Avi Karnani: You know what we see – I actually think people are more comfortable doing this in the workplace than they are elsewhere. Like think about a time you downloaded an app or used something as a consumer and then you had an opportunity to tell your friends about it. Maybe you’re like seeing some people at a happy hour or you go to a birthday party or something like that.
It’s kind of sporadic. You can’t really predict when it happens. I mean it’s great word of mouth for those businesses and products when you do talk about them. But like, it just sort of happens organically. Whereas in the workplace, everybody who’s around you, eight hours or more per day or however many hours you work at that place, that’s what they’re doing. And whether you see them in the break room or at the water cooler or a shift changes, that’s when people are together and they’re interacting and they’re talking about the experiences of being in that workplace.
It’s almost like if you were forced to see all of your friends on a regular basis and talk about what it’s like kind of interacting with other consumer products. So it just happens much more, much more concentrated, much more frequently in the workplace. So what you get is like a propagation that starts with somebody who’s willing to take some risks, maybe somebody who is younger or somebody who is more tech-savvy or lazier or what have you, and then pretty quickly the rest of the workforce is hearing about their experience and that’s reinforcing where you’re kind of like, “Oh, I should obviously do that too. This person who I see every day, they’re getting on just fine doing that and they seem to like it.”
Brandon Laws: That’s an interesting point because I was thinking, “Oh gosh, if you implement too much technology, there are so many different generations in the workforce now as you had mentioned.”
I think you want to meet people where they’re at to some extent, right? So if you just rolled out and said, “Everybody has to use this,” I bet you half the people would be really happy about that and the other half would be really irritated because they don’t – maybe aren’t as comfortable adapting to the change of technology.
But the way you described it was maybe you get some people rallied around it. They start talking about the experience and then everybody else feels comfortable. Is that how you would probably introduce new technology into the people side of the workforce?
Avi Karnani: Yeah, because you mix up a lot of different types of people in the workplace, who may not normally be talking to each other about their daily consumer experiences. Different generations, right? Like different interests, different – you know, front of the house, back of the house.
These types of folks are doing their own thing in their individual consumer lives. At work, they’re all together and they get to hear about each other’s experiences and they’re taking lessons. Nobody doesn’t want to do the thing that that other colleague of theirs said was really valuable, especially if he said it was safe, right? You trust that they wouldn’t do anything too crazy – if it’s working for them it should be working for me.
Brandon Laws: Yeah, there’s such a social aspect with technology. It’s like, OK, I saw somebody else went first. I’m going to jump on now or they said it’s a good experience.
Avi Karnani: And work is so transactional, right? You don’t go to your job because you’re hanging out and so maybe you do or don’t care about like the brand your friend is bringing up, that they’re a big fan of right now. You’re actually at work to derive some really specific value. So if somebody is like, “Hey, I’m getting even more value out of work doing this, doing a thing or using this tool,” then that just helps you get more out of what you’re there for.
So I actually think like work is an amazing place to propagate new technologies and have that kind of be more universally used in a faster pace.
Brandon Laws: You said transactional and that is such a good point. I think like – OK, let’s say I’m an employee and I’m like, “What’s my PTO balance right now?” Well, to go talk to an HR person or to go look that up somewhere in an archaic way, it doesn’t make a lot of sense. It’s a really transactional thing. But nowadays, I would think – I don’t know if this exists or not, but you would – you can text somebody or maybe there’s a bot that you can interact with that says, “What’s my PTO balance right now? Like how much time? Could I take off next Friday?”
Shouldn’t that be a – it’s a transactional process – but shouldn’t that just automatically take place somehow in technology? Maybe that’s happening…
Avi Karnani: I feel – because when I think about when I want to use PTO, it’s usually like 2:00 in the morning and I’m in my pajamas and not like right outside of HR. I’m wishing I was sort of like on a beach somewhere. So I like what you said before, right? You want to meet people where they are.
Brandon Laws: What are the areas that are the easiest to streamline from a tech standpoint to a lot of the people side of the business?
Avi Karnani: Well, the first – basic information just like you’re saying, right? What are my vacation days? What’s the company policy around this? How much can I reimburse for this or that? That’s the kind of thing where you can just sort of free people from having to interact with that information.
Your HR team, they super care about the business and they get the sort of wonderful privilege of sort of caring about it in terms of the people and not necessarily just the products or just the dollars. So it almost sort of sucks to have to be like a gopher for information. That like machine should just move around. You didn’t get into HR because you wanted to like look up people’s PTO balance.
Brandon Laws: Exactly.
Avi Karnani: You went into HR because you thought like the way companies and experiences can be great because they’ve brought together the right people and by helping those people fulfill what they’re looking for out of work, you can create like a great business and a great experience and a fulfilling life. I don’t think any part of that was like, well, how do I look up what the HSA limit is or how many days off I’ve got?
Brandon Laws: I think that’s such a good point. I think that technology should basically take away the administrative or low value tasks that HR or senior leaders have to deal with on a regular basis, or managers. They shouldn’t have to do this and with the right type of technology, it frees them up to really focus on being a true business partner, somebody who’s thinking strategically, right? That’s the way I think about it. I don’t know how – if you think about it that way. But it seems like it’s just economics 101, right?
Avi Karnani: Yeah. I feel like my friends who are HR professionals, that’s what they enjoy about their job and I think that’s where they make the biggest contribution.
When you think about contribution also, you want people to use the stuff you put in front of them. Sometimes just the forms and the acronyms and the questions, it’s so complex that employees, who are busy people, living their lives, sometimes just don’t access, don’t use. Maybe technology makes it easier for them to go, “Oh, actually I can use that and that can be helpful for me in some way. I should take some time off and not burn out and recharge or I should do this thing for me and my family. It’s going to save me some money.”
You want that because as an HR professional or business owner, you work hard to find and pay for those tools.
Brandon Laws: So the big question is, is a lot of this technology available to just a regular, small, medium-sized business? A lot of the enterprise companies that could develop their own technology, I mean there’s a lot of enterprise level software out there that they can adopt. But is this type of stuff available to even the smallest companies?
Avi Karnani: The great thing is this stuff is available and it’s – because it’s tech. You know, often the tech doesn’t super care if you’re a big company or a small company. But the challenge I think for a small company is having the awareness of what these things are and where they are and getting the time to turn them on and tell people about it. That’s always a challenge because you’re busy running your business and sometimes you put on your HR hat and you’re like, “What can I do today?” I don’t even know how you get started. That’s a real tough one. There are some platforms that are trying to do many of those things, especially in spaces like multi-unit food service and coffee, like Square for example.
They seem to be really good at like integrating different types of technology that’s working into one big platform, so people can access it without having to go like – become experts and sort of shop for and then connect different things. But that’s still a challenge.
Brandon Laws: Do you ever recommend that a company would like develop their own application for all this or is it better off like you’re buying from somewhere or you’re subscribing to a different type of application and it’s like a fully integrated system that does your payroll and time keeping and all this other stuff? You know, even if you’re just looking up information, like what’s the best route to go?
Avi Karnani: I definitely wouldn’t build my own software if I’m not a software business. I mean it’s a little bit like building a business to run just one part of your own business. That’s almost crazy. And making good experience in software is just like making good experience in any other business. It’s all-consuming. It takes a whole team, a lot of time, a lot of money and I think it would just be unbearable. Don’t build software unless you absolutely have to.
Brandon Laws: There’s a lot of software options out there, especially in this HR space now. What should really good software do? What components are non-negotiables at this point? I mean you obviously want a foundation for a really good user experience on the HR side, the payroll side, benefits probably.
What’s your experience? Maybe that’s a good segue to talk a little bit about what Alice does. You’re the CEO and co-founder of that organization. I would love to know more about what you’re doing and what you’re just seeing across the industry from that perspective.
Avi Karnani: So you know what just riles me up? A story of a time I went to look for an apartment with an ex-girlfriend of mine. It was the first time I was moving in with someone. We went looking for apartments on like a hot New York day and we get to this one that was like a great price and a great neighborhood. We walk in, open the door and she goes, “Uh-oh!” I’m like, “Well, wait, wait. We haven’t even seen it yet. We’re just at the front door of the building.”
She goes, “I don’t know. But look at the way they keep the stairs. Those are just some dusty stairs. I mean it’s like leaves kind of in here that blew in. What’s going on here with these stairs?” I’m like, “I don’t know. Let’s just go see the unit.”
We ended up living there over her objections and it was a terrible idea. It didn’t have heat on some of the time and it leaked. So when I think about finding software, I think about those stairs. If the sales process like where somebody reaches out to you and tries to get you to use their product isn’t really clear, if the on-boarding process isn’t really fast and when you flip through it, if there are just parts of you, you feel like you maybe need to go back through again or you need a manual to figure it out, I think that’s telling you something about how those people think about their business. And that’s probably going to happen in their tool and you don’t want to be in the middle of January without –
Brandon Laws: Fascinating. Yeah, I like that. So what kind of work are you doing at Alice right now? What areas of the payroll and HR side are you – is your software doing?
Avi Karnani: What Alice does is it – we make pre-tax spending automatic. What that means is as an employee, you connect your credit, debit, prepaid card or cards and when you spend money on a pre-tax eligible thing and there are 10 categories of expenses that are kind of everyday expenses that most Americans are spending a lot more money on than they want to. When you spend in one of those areas, whether it’s commuting or childcare, day camp or eye glasses, dentists, copay, all of those things, Alice discovers those transactions and we do what we need to do to make that amount of money that you spend tax-free on your paychecks.
So under the hood, we are CRAs, FSAs, HSAs, HRAs, COBRA, all of these acronyms that are normally kind of a headache, that you have to think about as a business owner.
Brandon Laws: A lot of compliance, yeah.
Avi Karnani: Oh man, yeah, so much compliance. But software is really good at managing those types of workflows, keeping them compliant, recording the right things. But it’s also good at making all of that easier. So our brand promise is no forms, no math, no acronyms. Instead of like putting forms in front of you, instead of an open enrollment meeting with doughnuts in a conference room, you’re going to get – you get messages. You get text or you can message us on Slack or on Facebook Messenger or email, however you’d like. And we collect the information that’s necessary without like using complicated benefit terminology.
We don’t throw acronyms at you. We almost don’t even say the B word because benefit sort of turns off most people, right? They’re like, “Oh, yeah. I got some benefit stuff. That’s like a thick folder that somebody handed me and I guess I got to do something about that.”
That’s not what we want that experience to be like. It shouldn’t be like a pain. It should feel like hey, here’s this stuff you spend money on. You take your kid to daycare. It’s super expensive. You ride the train – the cost keeps going up. You need to do all those things, so you can get to work and this product is going to make that easier for you and it’s going to raise your paycheck because we were able to optimize what you’re already doing with this free money that was always available to you. But before you had to do the work to connect the dots and your employer had to do it too. Software is good at automating those things and we build that software.
Brandon Laws: What does the employee feel on the communication side? How are they interacting with your software?
Avi Karnani: With joy. So we send out this great message every pay day that says, “Hey, Brandon Co just raised your paycheck by $51 because you bought a train passport for $125,” or whatever, “Keep on rocking on.”
Employees get so animated and excited, whether they’re saving $50 or $5. People send us emojis. They get real like – there’s a lot of attitude and joy that just sort of comes back where they’re like – it’s called Alice, so people would just sort of assume everybody here is named Alice – and they’re like, “Alice, you go girl! Keep bringing me that money.” They send us like GIFs from GIPHY.
Brandon Laws: Oh, so these are text messages that like Alice the tool is sending text messages. Is that how I understand it?
Avi Karnani: It’s sending text messages but it’s actually just sending messages. Whether those messages are delivered to you by text because you’re a texter or they hit your email because you’re an email person or you’re in Slack or you’re on Facebook, like we want to be like you said where you are.
Brandon Laws: That’s amazing. That’s really cool. So people could probably change their delivery preferences or does it hit all those at the same time if they’re using them?
Avi Karnani: Oh, no. They get to specify and we want to do what’ easy for them. So basically you go out and spend money on these ten everyday expense categories. You want your paycheck to go out. If you ride the subway in New York City, you’re going to get like a 50 cents an hour raise for free. You didn’t have to ask your employer for more money and you don’t have to work any more hours. If you dropped your kid off at daycare on the way to work and also go to the dentist because you’ve got eyes and teeth, you’re getting like hundreds and thousands of dollars back just added into your paycheck, every pay period all, year long, every year forever.
Brandon Laws: With your software – because I’ve never heard of anything quite like this. Is Alice like – is that a persona that you’ve developed, that that’s who the end user is always communicating with or is it somebody on your team? They will actually specify their name and they’re interacting through the Alice software. Which is it? What do people feel?
Avi Karnani: Yeah. This is a thing you got to think about a bunch when you design a way for people to communicate with a tool. So for the most part – we chose Alice because it’s an easy-to-understand name. You can say it in English. You can say it in Spanish and it feels friendly. So that just makes it accessible.
When we tell you that you save some money, we actually do it from your employer. So we’re saying like, “Hey, Brandon Co. just raised your paycheck by XYZ amount of dollars,” because we want you to realize that it’s Brandon Co. and an HR person who put the stuff together for you.
Brandon Laws: Yeah.
Avi Karnani: I mean you didn’t get the 50 bucks because of us. I mean we facilitated it and that’s great. But it’s because somebody at your company cared about you, your experience, wants you to take home more of the money that they pay you, wanted more of your needs. So I want that love to come back to the employer, right? I want you as an employee, when you think about switching jobs and going across the street, to go, “You know what? They grass actually isn’t greener.”
Brandon Laws: Yeah.
Avi Karnani: Because this company is actually trying to meet the needs of me and my family. Incidentally, the way pre-tax spending works is not only do you save money as an employee whenever you spend in one of these categories. Like you buy eyeglasses. Your employer also saves money on payroll taxes. So it’s a win-win.
Brandon Laws: Yeah. I love that. So I want to end this conversation by asking you something I like to ask when I talk with people in the tech space. What’s the future of technology with the way we’re using it as employees? What do you expect? What are you sort of planning for – in your business? Is there an AI component that’s – maybe you already have that. How much of that should we be looking forward to? What can we expect?
Avi Karnani: I remember reading a book where, it’s a sci-fi book and this character is traveling through space, and he lands on a planet and he gets out of this amazing, gleaming spaceship and everybody on the planet is like, “Wait. Who are you? How do you have this ship? Is there anyone else on it?” He just travels from planet to planet. Who are you? He’s like, “Oh, I used to do this thing back on earth and I worked in the government. So I didn’t have to pay for anything. So my salary has been managed by computers back on earth since I was fairly young and I’ve been traveling around at the speed of light for forever and because of that, it has been 300 years back home and so I’m like a trillionaire.”
This is like a random detail in this book that no one probably paid a second mind to. But that blew my mind and I thought that’s exactly how this is going to be. In my lifetime, I’m going to see computers taking over running over your money. Instead of you learning about the difference between an FSA and an HSA and trying to optimize this stuff – machines are good at that and we want to build those computers, right?
That’s what makes – finance is a core human technology, like farming. It just needs to be widely available and really smart and not just only for a certain segment of the population. So those are the two themes that we care a lot about. Everyone needs this technology. If you put it in software, you democratize it. If you make it so that people don’t have to learn complicated things, then everybody can use it and then you can’t sort of say to someone, “Oh, well, you maybe could have more money. But it’s your fault for not being financially …”
Brandon Laws: Yeah.
Avi Karnani: Right? I think that’s a great gas-lighting fraud perpetrated on by the American population. You shouldn’t have to understand the difference between an HSA and an FSA and all of its intended rules any more than you think about the alternator in the Uber that maybe drove you somewhere this week. You just get in your car. It gets you there.
Brandon Laws: Avi, I’ve got to be honest. That gave me chills a little bit with how you described how technology should be. I mean that is such a good point. I think it makes us – if we ever get to that point, technology with the right kind – especially if it’s smart – it makes us all richer by not having to worry about stuff that we should all have access to.
Avi Karnani: Yeah.
Brandon Laws: Like FSA, HSA, I don’t want to have to deal with that. My mind should be on more productive things, not only trying to determine what the best course of action is.
Avi Karnani: Ten years from now or sooner than that, I hope we’re going to have a conversation that’s going to go like, “Do you remember back when people used to miss out on stuff because they didn’t fill out the right form?”
Brandon Laws: Yeah.
Avi Karnani: And then hopefully the youngest person around the table is going to be like, “What’s a form?”
Brandon Laws: Yeah, yeah. That’s a good way to put it. I love that. Well, Avi, this has been a lot of fun. I love this discussion. I could honestly geek out with you for probably a couple more hours. Where can people learn more about you, about Alice or anything that you want to point people to? I think you probably have a lot of good stuff out there that people can consume. Point people to that if you don’t mind.
Avi Karnani: Yeah. We’re at www.thisisalice.com or if you Google “Alice pre-tax spending,” you will find us. We’ve got a great team here of people who think about taking the boring stuff, but the important stuff, sticking it into the background so it just works. So you can live your life.
Brandon Laws: Avi Karnani, thank you so much for being part of the podcast. This has been a lot of fun. I appreciate you coming on.
Avi Karnani: Hey, it’s my pleasure.