Optimizing Income and Benefits for Part-Time and Independent Workers

The workforce is evolving and if you visit the website of Steady, you’ll find some of the most interesting facts about how it is changing.  Most of the jobs created in the last 10 years (over 90 percent) operate outside of the W2, meaning they are either contracted or part time. Moreover, by 2025 that number is expected to make up half of the U.S. workforce. Steady is stepping in by helping these workers discover new opportunities, increase their incomes, acquire new skills and earn rewards for their work. Adam Roseman, co-founder and CEO of Steady, discusses how Steady is making an impact and how Fintech71 is playing a role. Adrian Becker, director of strategic partnerships at Steady, joins him.

Steady was the Money 20/20 USA 2017 Startup Pitch Grand Prize winner.

What does Steady do?
Roseman: Steady is an actionable income optimization platform, but what we’re focused on is helping support the shifting labor market. Half of the western labor force is becoming part time. There is an increase of part-time, flexible, hourly laborers and it will grow exponentially by 2025. This is a result of full-time job loss due to automation and a desire for a flexible workforce that matches supply and demand. The impact on workers is substantial. The end result is that most workers are becoming underutilized and falling short of full time work. In some instances, that could mean that they have only 20 hours a week of work. In other instances, like Uber, they could be waiting for a certain number of passengers, but only pick up a fraction of what they want. The impact to them is very similar in terms of them not achieving income levels that would be consistent with full employment.

Our business model revolves around helping these individuals gain full employment, which in many instances, involves them working for multiple employment platforms. Steady will also match them with the employment platforms that are appropriate based on their skill sets, their qualifications, their interests, their behaviors and put them in an environment where they end up optimizing their income potential. What we also do is provide the independent worker with suggestions and transparency around our scoring model so that they can learn how to move up the value chain over time. This could involve upscaling, obtaining additional qualifications, and other actions in line with what we learned about them through really studying and understanding them.

What is Steady’s story? How did Steady come to be? What sparked the idea?
Roseman: It was a collaboration between myself, and my mentor and investor in New York, a gentleman named Michael Lobe. Michael is a highly successful entrepreneur who has built and exited three businesses north of a billion dollars, the largest being priceline.com. Michael and I have been working together for about a dozen years.

Michael supported my two previous entrepreneurial endeavors, and his most successful business currently is the largest pharmaceutical discount card business in the U.S., which provides wholesale pharmaceutical pricing to 13 million uninsured or underinsured Americans. It has helped save them billions of dollars over the last eight years in pharmaceutical costs through a partnership with United Healthcare.

Michael and I started talking at the end of 2015 about what I was going to do next because I was in the process of selling my last business. I looked at the success he had with his discount card business called ScriptRelief, and wanted to figure out another way to tackle the economic problems that a large portion of the population is having. He had done this initially by helping them to save money, lowering their expenses through pharmaceutical purchases. We then decided to tackle the income side, asking ourselves: “How do we increase their income levels?”

That’s how Steady came about. We started studying research on this concept called “the future of work,” which is really a catchphrase used to define migration of workforce from fully employed to part-time independent labor. Once we started studying the research and focused on understanding the impact that this migration was having on workers, the idea came about.

Why is Steady important?
Roseman: They’re going to go from a median income of roughly $50,000 a year, to being only half employed and making $25,000 annually. With that, they’re losing health insurance, they’re losing paid time off and they have a complicated tax scenario. In many instances, they’re left wondering, “What do I do? How do I get myself out of this situation?”

It’s not easy. There is no place for them to go to receive support. From our perspective, we are focused on insuring helping those who are on the wrong side of the income gap – a very widening gap that’s only going to increase. Without a platform like Steady, the worker would be left behind.

When you’re a part-time worker, there’s no clear path to ascension. Previously, you started in a job out of college – you had a clear path. It didn’t matter your job, you understood what your path was and how you could move up the ladder. That is disappearing. The only way you can move up that path is to take control of your own destiny, and that requires the individual to understand how to actually go and achieve that.

That’s what gets us so darn excited when we wake up in the morning. We have the ability to impact potentially tens of millions of Americans, let alone the global opportunity.

What are Steady’s goals as a company?
Roseman: Over half the U.S. workforce will be legal workers by 2025, and we’d certainly love to help them all. Our goal is help and support as many of them as possible and I think we’re a little bit too early to forecast what percentage of the population we want to target.

We are launching the business in partnership with financial institutions including banks. Not only does this massive migration of workforce have an enormous negative impact on consumers and the workers themselves, but also on banks for a number of reasons.

There could be an outstanding credit, it could be a home loan, an auto loan or a credit card, to an individual who all of a sudden loses a job and becomes an hourly worker. Then their income drops and they can’t pay their bills. The bank ends up in a situation where they have a default on a loan and have to write-off that credit and where they lose the long-term value of that otherwise very well intended customer. From a bank’s perspective, it is very important for them to enhance income levels and increase the potential earnings of their customers. I had a strategic partnership from one of the largest banks in the U.S. tell me point blank, “If we don’t change our credit models around the financial products and loans that we’re issuing, 10 years from now, no one is going to qualify for any of our credit products.”

From a financial institution perspective, it’s important for them to understand how are they going to get their arms around a centralized view of the earning of an independent laborer, and that’s something that we’re providing from a data perspective. One of our near-term goals is to secure as many partnerships as possible with banks and financial institutions who are going to help us reach their customer base.

What are the biggest fintech trends? Which of these fintech trends is most likely to impact Steady?
Becker: In recent months and years, we’re seeing many fintech shifts popping up that offer savings and budgeting tools for customers where they will automatically put aside your earnings – retirement, tuition – and tell you what expenditures you have are wasteful. Many of these fintech firms are popping up, and we noticed that we offer something to the consumer to raise their income. It’s very different from just saving and budgeting what they currently have.

How did Steady hear about Fintech71?
Roseman: We were trying to figure that out ourselves! We subscribe to a lot of fintech newsletters and I believe it was in one of those.

What appealed to Steady about Fintech71?
Roseman: We found it incredibly exciting just given the pure number of financial institutions that were participating. We have seen many other fintech accelerators with perhaps one bank behind them, but that wasn’t very interesting for us because we are in a fortunate position where we don’t need external money, we’re self-financed. For us, participating in an accelerator was very much, “What could we get out of it?” in regard to resources, support and, most importantly, introductions to financial institutions. We sought guidance in terms of how to best optimize partnerships with them.

What is Steady hoping to get out of Fintech71?
Roseman: One of the big ones for us, other than the financial institution partnerships, is having a chance to collaborate with JobsOhio.  It’s an area for us to explore how to work with government, private and public partnerships that will be impacted by workforce migration. We wanted to know how we partner with them to help deploy our solution to increase employment and increase income levels in their local areas. Given that we’re here for a period of time, it would be very interesting for us to explore with JobsOhio or any other workforce development agency, how we could even use Ohio or certain miniature cities in Ohio.  These could be pilot locations for collaboration with either government or public, private partnerships.

Have you been to Ohio before?
Roseman: No. I’ve been to every corner of the world except for Ohio, and this is my first trip. My paternal grandfather is from Akron, so I’m glad to be here for the first time. I hope to stop by there at some point.
Becker: I’ve been to Ohio once when I was a child. I barely remember it, I don’t even remember which part – I think it was Dayton or Akron, one of those. I basically consider this my first voyage to Ohio.

What was your perception of Ohio before Fintech71?
Roseman: Only positive thoughts and that I had family connection here. When I was growing up, I was a little brother in the Big Brothers Big Sisters program – my big brother was from Dayton and he was an Air Force guy. He worked with me for about four years of my childhood. He got me to be a Bengals fan. I obviously knew it was a large state from a population perspective and an influential state from a political perspective and from a financial services perspective. I’m pleasantly surprised to learn how many large-scale employers are here.

I knew about Procter & Gamble in Cincinnati, but I didn’t know Kroger is based here. Limited Brands and all of the quick-service chains are here. Ohio has a lot.

Becker: Probably the first thought is LeBron James. I’m a big sports fan and, I try to equate geographies with their respective sports teams. I’ve always viewed Ohio as a blue-collar state filled with hard-working people. Now that I have been exposed to some of Ohio’s industry and its numerous financial retail headquarters, it’s interesting to see everything it has to offer. Of course, The Ohio State University is also here in Columbus. I don’t want to ever refer to it as anything other than that.

What do you like about Ohio thus far? How does Ohio have a fintech advantage?
Roseman: We’re still learning. The geographic location is sort of wonderful. Ohio has major financial services institutions and it’s close to the big cities as well – they’re just a hop, skip and a jump from here. It’s also close to our base in Atlanta. Maybe an hour and nine-minute flight. I was surprised how close it actually is. I was also surprised that there are three major cities in Ohio – Cleveland, Cincinnati and Columbus. They’re all a few hours or less from each other. The number of financial institutions and insurance companies here is also excellent.

Becker: I don’t think anyone realizes it until they are here just how centrally located Ohio is. It’s not only close to large hubs like New York and Chicago, but also Pittsburgh, which is growing rapidly.

Roseman: And Hyperloop One has plans to connect Columbus to both Chicago and Pittsburgh. An even faster way of transportation.

The Steady App will launch for iOS and Android in Q1 2018.

Interested in learning more about fintech, Fintech71 and financial services in Ohio? We invite you to visit our financial services page.