HR Technology Column

How Much Money Do You Make?

Nobody will tell you that, right? But TALX has been quietly collecting that data for years and now has it for 50 million people. Parent Equifax wants to use it to re-invent the credit reporting business. Plus create some new services and incentives for HR that may seem scary at first but could help employees, particularly now.

Monday, April 4, 2011
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These days, Americans will talk about just about anything in public -- at parties or even on television -- alcoholism, sexual infidelity or dysfunction, mental illness, child abuse . . . whatever.

All those once-taboo subjects are just fine for polite conversation, except for one last topic: How much money do you make? What's your net worth? It's the one Puritan stricture we have left.

Nobody talks about that still, even between close friends, except in protected relationships with a lawyer, accountant, and investment adviser, or with a spouse and family member -- these last two often only during troubled times.

But that's exactly what Dann Adams, the new President of TALX, a division of Equifax, wants to know.

He already knows a lot because of the unique service TALX started before he got there, which is the reason, in 2007, that Equifax bought the company some of us still remember as the HR pioneer in IVR (Interactive Voice Response).

Years ago, TALX created a unique, free service called "The Work Number," which freed HR of one of its most mindless and onerous tasks: verifying someone's employment and income for a potential mortgage lender.

In the past, that meant HR had to verify that JPMorgan Chase (for example) was really the party on the phone, and that the employee had agreed to release the information, and then had to go get it!

The Work Number used IVR, of course, and an employee code to verify the caller and his or her consent, and gave the answers automatically, hands-free. Huge adoption.

For it to work, TALX had to have the employee's consent and then collect and store all the company's payroll records for all the employee's years on the job to verify dates of employment.

Last summer, when Adams joined TALX after being president of another Equifax division, it had the records of 30 million people; now it has 50 million people plus another 150 million "historical" records of those no longer working at a particular company. Records from about 2,000 companies in all.

Is he just nosy or what?

No, he wants the data on how much you make and what you're worth so Equifax can create the next generation of the 100-year-old credit-reporting business.

You've all seen, or at least heard, about your credit report. It's like "your permanent record" that teachers in grade school or high school always threatened you with for misbehaving.

It chronicles your payment history for every credit card you ever had, for every loan you got (mortgage, home equity or car) and probably bounced checks, if they were to pay a bill. Plus where you've ever lived, under what names and your total outstanding debt, which naturally varies by the time of the month!

But all that is just the "credit" side of your life, your liabilities and debt. And for 100 years, reporting agencies like Equifax, Experian and TransUnion (plus Fair Isaac Co., producer of the famous FICO score) have judged your credit-worthiness mainly based on those criteria (plus others too maddening to describe!) and your resulting risk of defaulting.

And lenders have decided to give you the loan at a better or worse interest rate (or not at all) based on those scores.

What the reports have never had -- incredibly for all these years -- is your "collateral" (assets and net worth) and your "capacity" (income and employment). Bingo! The data in The Work Number has capacity, which is why Adams says Equifax bought TALX four years ago, something I'd never understood before.

Today, when a bank decides whether to grant you a mortgage, it collects all that information but from four places: your credit report or FICO number, your tax returns, your own proof of your net worth, and your employer or The Work Number.

Adams is evangelical about the benefits of having this information all in one place, what the company calls Equifax Decision 360. Equifax already has the credit data, The Work Number has the capacity data, and collateral or net worth is being estimated in various esoteric, high-tech ways.

"Employees, employers and lenders need transparency," he says. "Credit is a function that drives consumer sales, drives small business profits and drives employment."

A pretty good point during our nearly jobless recovery, where credit is increasingly hard to get (especially for small businesses), and consumers are shrinking their debt. While the last is certainly good for the individual, it's not great for an American economy based so largely on consumer spending.

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So what's in it for HR? Adams wants to provide new low-cost but high-value employee services around "credit health." Think of them as wellness programs for your employees' wallets, rather than for their bodies.

Most particularly, Adams is thinking about companies bartering employee data (with their consent) in return for lenders offering those employees better interest rates through secure internal portals.

Or running credit stress tests for an entire employee population based on Equifax's new, more complete scoring. And then if the numbers are bad, providing online credit and borrowing education to employees.

Adams says a couple of companies have agreed to a pilot, which will start in the second half of this year.

It all reminds me of the moment that companies finally admitted that their new defined-contribution plans or 401(k) would never support employees through retirement the way old defined-benefit pensions would. And that they needed to start giving them some retirement-planning advice.

Oh, the hysteria that ensued about the potential liability of offering employees investment advice! Well, we got past that or shifted the risk to a third party.

We may see a little of the same thing for offering credit education, not to mention actual loans. I believe in the end companies will see the self-interest in helping employees stay financially healthy. Certainly the companies already requiring credit reports on job applicants should!

While no one still tells anyone how much money they make.

HR Technology Columnist Bill Kutik is co-chairman of the 14th Annual HR Technology® Conference & Exposition, October 3-5, 2011 in Las Vegas. He's still working on the program, but you can see the funny new video and learn some early program highlights. You can comment on this column at the Conference LinkedIn Group , which does not require prior attendance to join. He is also host of The Bill Kutik Radio Show®. He can be reached at .  

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