Price is Right: How HealthEquity expanded into rural Utah
With unemployment levels along the Wasatch Front remaining incredibly low, employers looking for new talent have few options—and none of them are particularly attractive. They can try to lure employees from their competitors, recruit out-of-state employees, open a location outside of Utah or outsource work to a foreign country. When Draper-based HealthEquity was faced with the tough task of adding dozens of new employees to its customer service team, company leaders decided they needed to try something new. In late 2016, they opened a satellite location in Carbon County, Utah. “We’ve always paid a little more than the average [customer service center] along the Wasatch Front and that has allowed us to get the cream of the crop,” says Steve Neeleman, founder and vice chair of HealthEquity. “We felt like if we could offer a very competitive pay scale in a place where we weren’t going to face the same competition, we could continue to get the cream of the crop.” That place turned out to be Price, Utah—two hours southeast of HealthEquity’s office in Draper.
A good fit
There are several reasons the 8,000-resident town was a good fit for HealthEquity, including access to a well-educated population, thanks to the Utah State University Eastern campus in Price. The town is also home to an unemployment rate 60 percent higher than the state average and local leaders who are quick to welcome new business to the area.
HealthEquity has already hired 30 employees at the satellite location and plans to bring on another 25 by the end of 2017. The company hopes its rural location will not only provide good paychecks today but greater opportunities for its Price employees in the future.
“One of the things we’re most proud of is our internal promotion rate,” Neeleman says. “Right now, these employee may want to stay in Price but in the future they may want to move into another opportunity [at our Draper office].”
Though HealthEquity’s entrance into rural Utah has been a success, it hasn’t always been easy. “The biggest challenge is keeping our culture intact,” Neeleman says. “Whenever you expand, you always need to think about how to help [remote] people feel the love. Communication challenges have been mitigated over time with video conferencing and the use of technology—though clearly it’s nice to see people face to face—but when we’re having a party in Draper to celebrate our team members, we need to be doing the same thing in Price. You need to circle your new people in so they know they are really a part of your culture.”
Boots on the ground
Culture is not the only thing organizations need to focus on when expanding into a new market. Neeleman says it’s crucial to have strong partners who are willing to lay the groundwork for your success.
To launch its new venture in Price, HealthEquity teamed up with Salt Lake City-based Accelerant. Its founders, Dean Lundberg and Joel McKay Smith, built Accelerant as a go-between for large companies who are looking to connect with talented workers in rural areas.
“When we go into a community, we accomplish all of the things the company would do if they were setting up their own operation,” Smith explains. That includes everything from securing a building, to setting up desks, computers and networks, to screening applicants and hiring new employees. “We also advance the community for them,” Smith adds. “We assess the employment situation, work with local agencies and spend a ton of time establishing local relationships. We’re basically the boots on the ground. We provide the company the opportunity to expand to a rural market without really having to worry about it.”
If companies don’t have to concern themselves with the heavy lifting of the expansion, they can focus on the benefits of having a rural location, Johnson says. “Not only is there better availability of workers, there’s definitely a cost advantage of going rural because the infrastructure is less expensive and we take on much of the risk,” he says. “There are also less tangible cost benefits. We tend to see higher retention rates and higher loyalty to the positions in rural areas.”
Not only are workers more loyal in small towns, Johnson says companies also find a greater level of cooperation with local government. “The leaders are aware you’re there and are ready to help,” he says. “And when there are jobs available, the populace tends to jump on board and fill the positions. It’s a different mindset than you have in the urban market.”
Utah leads the way
While HealthEquity’s new call center only accounts for around 100 jobs in one community in Central Utah, the leaders of Accelerant see it as an important step in the right direction for the state’s economy. “We’ve got a great big state and we have the ability to share the prosperity of the jobs that primarily reside in Salt Lake and Utah counties,” Smith says. “There are just not enough people in the Wasatch Front to fill all the jobs. Rather than outsourcing those jobs to another state or country, we should turn to the quality workers in rural communities who can contribute to continued economic growth of the Wasatch Front and the rest of the state.”
After seeing HealthyEquity’s success in Price, Johnson is optimistic that more companies will consider opening up shop in other parts of the state. “Utah has an incredible opportunity to lead out on what is a national, if not worldwide, problem—solving economic challenges of rural communities. As a state, we are extremely cooperative and willing to help each other. We have an opportunity to tap this business idea and solve this problem together,” Johnson says. “Everybody’s eyes are on Utah, watching to see if this works,” he adds. “I think it will work and I believe the rest of the nation will follow. It just makes sense.”