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Beyond the Paycheck brings you candid conversations with CHROs and top people leaders who are rethinking how compensation and benefits impact more than just employee bank accounts. From the first paycheck to financial wellness programs, we explore how money shapes identity, equity, purpose, and power at work, and how forward-thinking companies are using pay and perks to transform lives, not just attract talent.
This podcast is sponsored by Aura Finance, the financial wellness platform designed to help employees feel confident, secure, and in control of their money.
See more at aurafinance.io
Beyond the Paycheck - Chuck Heaton
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[00:00:00]
Kelsey Willock Jones: Welcome, Chuck Heaton, vice president of human resources and chief compliance officer at Perma-Pipe.
Thank you so much for joining us this afternoon. To kick us off, I'd love for you to share a little bit more about your career and background to your current role and where you're calling in from today.
Chuck Heaton: Kelsey, thank you so much. It's a true pleasure to be a part of this discussion, and I was very honored that you invited me. So I'm a human resources professional. My degree is in HR management, so I'm lucky enough to pursue a career in something I studied in college. I've been working in human resources for over 30 years in a multitude of industries, from textiles to retail to oil and gas, energy-related.
Pretty strong domain knowledge in manufacturing. That's where a lot of my career has been. Perma-Pipe, the company I currently work for, we are an engineered services pipe company. And what we do is we don't make the pipe, we make it better. And so our product [00:01:00] typically is insulated or coated for different applications.
About 60% of our business is what we call distributive heating and cooling, so for office buildings, hospitals, airports et cetera, so steam and water and fuel, et cetera. And then 40, 40-plus percent of our business is oil and gas, so the movement of oil and natural gas and liquid natural gas, et cetera.
And we're beginning to see some opportunities in the water market as well. So we make pipe better to either for corrosion purposes, insulation purposes, et cetera, and we have a multitude of products. And for example, our pipe is in the White House, our pipe is in the Burj Khalifa. So yeah.
So it's a company you probably don't hear a lot about, but it's-- you probably have been somewhere that has our pipe in it
Kelsey Willock Jones: Just some small projects here or there.
Chuck Heaton: Not a big one, not the big one, so
Kelsey Willock Jones: It's such a pleasure to have you, and I have so many questions. You have such a unique and interesting background, [00:02:00] especially spanning so many different, industries, especially ones that are the lifeblood. When I think about automotive industry, it's transportation. Water, it's, the lifeblood of human beings, so really excited to get there.
But before I ask you all those questions, I wanna take a step back and learn a little bit more about your background. So tell me a little bit about your first job and what you spent your first paycheck on.
Chuck Heaton: Oh, boy. So my first job out of college, I was a corporate recruiter for the world's largest carpet company called Shaw Industries. And I remember my first starting salary was 21,997. And as a college student who had lived on Steak-umms and, tortillas and stuff, that seemed like a lot of money.
Wow. And I moved to this town in northwest Georgia. I rented an apartment. I was gonna get married in three months, and I got my first paycheck and I'm like, "Where's my money?" And I remember going [00:03:00] into my boss going wow, I thought I would be making more money than this." And he said, "Hey, listen, taxes.
You gotta know that the government takes a percentage, and then Georgia takes..." I was living in Georgia, so they take a percentage, and then Social Security and Medicare. And I had worked in college, but obviously my paycheck was so small that those numbers were minuscule. And at the time for a college student, I was wow.
Fortunately, I make a little bit more than 21,997 now. But at the same time helping employees understand their paycheck and what is taken out of it and... But also to encourage them to we talk a little bit about benefits and invest your money and... 'Cause what I tell employees all the time about this free-- what I call free money, which is 401match in the US.
And we do a similar plan in Canada and do, the, where we operate internationally. So we operate in seven different countries. So w- we're a smaller company, but we're very complex, and benefits look different in [00:04:00] each country and how they're structured, and the US is the most complex of all those countries
Kelsey Willock Jones: And how do you think your early career and relationship with money directly has influenced how you show up for your people and think about making decisions in terms of HR benefits and more?
Chuck Heaton: I think sometimes when you climb the ladder, you tend to forget that people live paycheck to paycheck, right? And I can tell you about a time in my career, a particular company I worked for that I had a big group of hourly people, and we kept have- having problems with payroll, and the corporate payroll manager kept telling me you know what you need to do?
You just need to give them some financial training so they can live better than been dependent on their paychecks." And I about blew a gasket at the time because, literally people, if the paycheck wasn't right, they were counting on money to pay rent or a mortgage or a car payment or... And I was a real [00:05:00] thorn in the side advocating for my people and my peers would look weird at me sometimes because I was, like, so strong about making sure we get payroll right, and if we screwed up, getting them money that day.
So they can wait till the next pay period." And I said, "No, they can't." I said, "They're gonna pay fees and all this other stuff." And I never have forgotten that experience of being the first-timer and then living, paycheck to paycheck. I have never forgotten that lesson, and so if we screw up payroll in any way for people, I am the first one to say, "All right, we gotta fix it now.
We cannot wait to do that." And so to me, that was a important lesson that has served me well, in my career
Kelsey Willock Jones: And we often forget that a paycheck isn't just always about one individual. There can be so many different dependents, whether it's, family members, children, and more. So it's such an important reminder that a financial literacy lesson isn't gonna check all the boxes in terms of all the different [00:06:00] circumstances that people come from.
Chuck Heaton: Yeah. And, it's interesting when you do, like, when you do benefits open enrollment, a lot of times you need to make sure that you do information sessions when spouses or partners can attend, because a lot of times the primary employee is not the decision maker when it comes to benefits.
And so you either respect that or not, and, sometimes I get more questions from spouses than I do the actual employee or vice versa even, right? And the makeup of the workforce has changed so much too, that it's there's a lot of non-traditional arrangements or relationships, et cetera, that, you have to navigate that and be adaptive to those needs
Kelsey Willock Jones: Speaking of non-traditional, we're operating in a world now where companies are focusing heavily on supporting the whole person. So it's no longer just about the paycheck itself or even just retirement. It's supporting mental health, it's [00:07:00] supporting physical health, it's financial health. Can you tell me a little bit about a program that you've introduced, whether it's at this company or prior employers, that you're particularly excited about?
And I'm also really interested in the perspective of the trade-offs that need to happen in order to support a whole person.
Chuck Heaton: Yeah, that's a great question. So I think whether it's, in a previous company we may have purposely put in a gym for people to be able to work out and-- or when we were building a new facility, making sure that we had space for at least a treadmill and some weights or whatever, and understanding what those liabilities are, et cetera.
I've been in larger companies where we rolled out a whole wellness program, but they don't always get the greatest return. So I think a lot of times it's about incentivizing people to make sure that, for example, your yearly physical is basically paid for. It is a standard benefit that most companies will offer.
You go get your yearly physical because when we [00:08:00] see the cost of pharmacy related to high blood pressure and diabetes management, et cetera, people going to the doctor regularly, knowing where they're-- and understanding their health is critical to benefits cost management, in my opinion.
So educating and encouraging people to get that yearly physical and then, hey, if you have issues, diabetes management, et cetera, try to educate people a lot on their programs. The, the insurance companies are pretty good about different programs that they offer as part of their package, that people can get help with managing their condition, right?
So if you can do a good job of encouraging people to take care of themselves and utilize the benefits that we do provide, then... And that goes into a whole discussion about total rewards, right? I think a lot of companies struggle with articulating what they really do [00:09:00] invest in employees. And I had a strategy around a union contract one time where I educated the union on how much the company was spending to their benefits coverage. And I wanted to negotiate the benefits to come to us so that we could- A, they could get the same benefits as the rest of our employees, and B, manage the cost, and C, educate employees what they were missing out on. So we used that strategy. We used a total reward strategy. I put it out there in front of all the employees, the union guys and ladies, "Hey, this is what we're paying.
Are you seeing that benefit in any way?" And we were successful to, to get the employees on our benefits when we demonstrated to them that we were paying for something that, that they were not seeing a benefit from
Kelsey Willock Jones: And I love that it's such a simple solution in terms of making a change, which isn't introducing a new program. It's introducing the concept of this is the value that we're [00:10:00] investing in you. Do you know that? And if you're not seeing it, perhaps a change needs to be made. But your paycheck is not just, the cash compensation you receive.
It is the value of that, annual checkup. It is the value of your pension. It is the value of healthcare for your spouse that we often don't even know the value of unless it's on pen and paper in front of us.
Chuck Heaton: Yeah, and even then companies it's a challenge that when you do educate or you send emails or flyers or mailers and stuff and that's why I'm big about still doing mailers to the house, again, talking about that spouse or partner component of making sure they get the information, A, open enrollment is happening.
Somebody needs to make sure they renew their enrollment, but B, this is what your options are. And, we have three different plans, three different medical choices and I believe that's important and fully transparent [00:11:00] about what the cost differences are, right? And we're like a lot of other companies.
We give seed money around an HSA.
We have FSAs as well, but we seed the HSA to incentivize people to take high-deductible plans. But hey, if you wanna pay that cost for a PPO Plus plan, you can, but this is... Look at the differences, right? But this challenge that we were talking about earlier around benefits costs this is another Armageddon year, as some benefits brokers might say, around, increases anywhere from 15% to 50% in benefits renewal costs
Kelsey Willock Jones: So I wanna double click on that. We were chatting a little bit about before this conversation. And typically I end on this but I think I cannot help but ask the question now. Do you think that this is something that most employers aren't ready for? And can you talk a little bit more about that kind of Armageddon angle?
Where are we currently at, and what are employers missing about this major shift?
Chuck Heaton: I think some ways we've heard [00:12:00] it, just like we heard about the generational shift, right? The big shift change. 10 years ago, the oil and gas industry, all they were talking about was the big shift change, and it didn't happen, and then bam, it happened. And so you've seen major leadership changes, especially in the energy industry.
Same thing with benefits. We've heard it, accepted it, we've altered, we've we've flipped all the different things that we can around the benefits cost, but if we see 15 to 50% increases. We'll-- you play the game, you change a carrier or you change two carriers or, and then you gotta worry about, coverage and networks and then it gets to the point of you change deductibles and all this other stuff. But, it's higher than the what in the inflation rate is. And companies are are back to around three, 3.5% wage increases now in the US.
Some companies I've heard have basically said they're not gonna provide a provider, [00:13:00] smaller companies. We're just gonna give you a chunk of cash and you gotta go out and find coverage
So I'm afraid we're gonna get more and more of that happening and We already have a challenge even with high deductible plans for people to be consumers. But if you throw a bunch of people into the open market that don't understand it fully, "Hey, here's your 1,000 bucks or $5,000," or whatever that cash would be that's the Armageddon I see.
And then the other thing that I posed a question to a broker friend of mine and I said, "Are we beginning-- Is this the beginning of the end of company-provided benefits?"
I think it's a legitimate question because at some point companies are just gonna say We can't-- this is unacceptable, but there's such a huge industry, the insurance companies, the hospitals, you're seeing so much consolidation on the healthcare side. I'm not sure there's a very good answer to what...
i'm concerned we're gonna see some pretty big shifts, and it's really gonna [00:14:00] impact people that are not prepared for it
Kelsey Willock Jones: What was the broker your friend or your colleague in the industry at the broker, what was their answer? Super just curious if you're willing to share
Chuck Heaton: So the particular broker that I asked that question to said, "Oh no, it's, it ain't gonna change." And then I asked another broker that I know the same question, he goes, "Yeah, I think you might be right." So having spent the time I've spent dealing with these issues I just, I see change coming and we're really not sure how we're really gonna deal with it
Kelsey Willock Jones: And it gets so complicated because it's not only, at a company level it's also at, state law level. Some states, require companies to provide health insurance over certain sizes, and every state's different. So I certainly agree with you that, we can't keep doing what we're doing at the pace in which we're doing it.
The 15 to 50, I actually have interviewed folks that have shared higher numbers than that in terms of healthcare [00:15:00] cost increase on an annual basis and how many times do you switch. Eventually the switching, it no longer is the solution. So what is long term is a question that we're all scratching our heads around.
Chuck Heaton: Yeah, and the battle, the constant battle between fully insured and self-insured in the US. And used to be it was an easy decision to go self-insured 'cause you could see better cost, you could control, you could carve out the pharmacy and, and do different, PBM incentives and all this other stuff.
And but companies hate it because of the cash flow component and the stop loss. What I've heard about the stop loss market is concerning, because those renewals, there are less companies in the market now, and those renewals are getting pretty expensive. Is self-insured still an option, especially for smaller to mid-size companies, right?
So it's... i've told my broker, I said, "We have to be open to everything this year." I said, "Depending on what you come back with on my renewal," I said we [00:16:00] have to look at everything."
Kelsey Willock Jones: Perhaps you and I have a follow-up conversation post that renewal, 'cause I'm super curious where it lands and where it's gonna land for so many other folks, as well as, what's gonna be the straw that breaks the camel's back to, ultimately majorly shift the industry. So I wanna shift our conversation into the topic of financial health. We talked a little bit about it in the beginning of this conversation, understanding, many folks might be living paycheck to paycheck, et cetera. How important is financial wellbeing for employees to the company?
Chuck Heaton: I think that's a big challenge because I think as we again see this generational shift, we're seeing a group that, what, depending on what numbers you believe, 30% of them are still living with their parents. And so n- because of the cost of housing and everything else.
So I think it's important to educate people about, like you talked about, benefits education, so around health and wealth, health, and then around welfare. And one of the things that we did here about three years ago is [00:17:00] we changed platforms for our 401k so we could get lower fees so that people could keep more of their money here, in their funds, basically.
And so I think there's the whole fiduciary responsibility. If you talk about what's the responsibility of a company for people, part of this is the true fiduciary responsibility that you have is to ensure these plans are maximizing as much as possible the right funds, the right selection. Are we having funds that, A, perform to a certain criteria, and you need to have an investment strategy and all this other stuff.
Two is, are we as doing the best that we can to ensure that our employees are not paying, a chunk of their money to the broker or to record keeper, basically. So it's a constant struggle and so you meet regularly with your advisor you're reviewing the investments you're determining how does that fit your investment criteria.
And sometimes you got to make decisions about changing funds because either they're underperforming, [00:18:00] the basis points are too much on the on the fees, et cetera. So that's also a part I don't think people realize the fiduciary responsibility that a company has for their retirement money
Kelsey Willock Jones: And when you were also talking earlier about, HSAs, FSAs, whether it's seed money or not, there's also that kind of fiduciary responsibility of helping people make the best decisions for themselves, whether it's a decision around healthcare, it's a decision around, savings, retirement, et cetera.
I love that you use the word fiduciary 'cause it, it puts the onus on this is a responsibility of a company to really think through not only who are the vendor partners you're working with, but how does that impact the workforce itself?
Chuck Heaton: Yeah. And those, change is difficult any time and, making sure you educate people on the change and why you're doing it, transparent about, "Hey, w-we're gonna get lower fees so you're gonna see more money in your accounts." The the other piece around that, that union discussion is that, typical union is pension plans.
And so something I've done in [00:19:00] the different union contracts that I've been involved with is introducing 401plans to the union to, "Hey, there's an alternative retirement option for you."
And a lot of times we put the incentive there, we'll match some of the money. Now we're paying some money towards the pension, and so that's where the costs are gonna go, but hey, we'll put a little money here and match you and you get a tax benefit from it, and that money's yours, right?
Different companies have different vesting requirements, but, still that money is yours. And then if you need to leverage it for something down the road... And a challenge with 401plans, especially in a blue-collar population, is they love to lend themselves money out of those funds. And helping people understand what the potential liabilities are for that situation and what the impacts are, that's a constant.
When you've got large blue-collar populations, that's a responsibility to educate people about, okay yes, you can take a [00:20:00] hardship withdrawal. Yes, you can take a loan, but if you take a hardship withdrawal, you're gonna pay a 20% penalty, for example.
Kelsey Willock Jones: And not to mention when you're 65, you're not gonna be too happy with the decision you made at the time.
Chuck Heaton: correct. Yeah where'd my money go? You, 10 years ago or 15 years ago, you took out a chunk to buy a house or whatever, right? So
Kelsey Willock Jones: And my last question for you is, there's so much change going on in the industry and, whether it has to do with the rising cost of healthcare, how we're, operating in an Armageddon, so to say, so much new regulatory as well as innovation shifts happening. How are you staying current?
Are there specific, conferences? It sounds like you're getting a lot of information from your broker, peer networks that you've been a part of that you'd be willing to share and chat about.
Chuck Heaton: Sure. I think, I'm a regular reader of Forbes and Wall Street Journal and stuff like that. being in HR now, you need to be a business person. that's the function has changed so much that you really need to be [00:21:00] engaged with the business.
And because we're an international company, geopolitics and political shifts and all this other stuff you need to be aware of, too. The benefits piece of it, it's having a really good relationship with your broker, and We have a really good organization here in Houston, a peer network called HRLN, and that group of people, we're able to have regular conversations and share best practices and then, I've got a a smaller group that we meet every other...
We have a coffee break every other Friday, and we're sharing, what are we seeing and what are we dealing with, and ideas about this or that. So it's, having a good peer network is very helpful
Kelsey Willock Jones: Thank you so much, Chuck, for the conversation, all of your wisdom. And I I do mean it when I say I'd love to continue this conversation because as we talk about industry shifts happening, it's happening so fast, our conversation will likely look very different in three months from [00:22:00] now. B- so thank you so much for joining us this afternoon.
Where can our network connect with you beyond this conversation?
Chuck Heaton: Sure. I'm on LinkedIn, feel free to that's the easiest, best way to connect with me. If you reach out to me, I'll definitely respond to you
Kelsey Willock Jones: Fabulous. Thank you so much again, and I hope you enjoy the rest of your afternoon
Chuck Heaton: You too. Thank you