Total Rewards (Comp & Benefits)

Salt Labs, a rewards platform, secures $8 million in seed funding

The startup aims to boost loyalty among frontline employees by granting rewards based on the number of hours worked.
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Courtesy of Salt Labs

· 4 min read

Salt Labs, a startup that aims to help frontline employees earn rewards for the hours they work, recently closed an $8 million funding round, HR Brew has learned exclusively.

Third Prime, an early-stage venture firm that focuses on financial and industrial technology, provided funding for the seed round. Salt Labs launched in March 2023 with $10 million in pre-seed funding from partners including Fin Capital, which led the round, and Anthem Venture Partners.

Co-founder and CEO Jason Lee told HR Brew that Salt Labs plans to use the funding to start rolling out the platform to large US employers following a successful pilot in Puerto Rico.

What is Salt Labs? Lee said he views Salt Labs as a potential solution to the “fundamental disconnect” that exists between employers and workers. He noted that even as wages have ticked up steadily in recent years, turnover hasn’t gotten better—the US quits rate climbed to a record 3% in November 2021, and has since returned to its prepandemic level of 2.3%.

After leaving DailyPay, an earned-wage access platform he co-founded, Lee started having more conversations with workers and employers about this disconnect, he said. “Employees don’t feel very loyal to their employer,” he said. “It’s a highly transactional relationship…The question I asked myself was, could you incorporate some form of loyalty into the actual workplace environment?”

The answer Lee came up with was Salt Labs, which he compares to loyalty programs available at major retailers like Starbucks or airlines such as United Airlines. Employees who use the app earn “salt” for every hour they work, which they can then redeem for goods or services. This might look like NASCAR tickets, a trip to Disney, or a savings product, such as a treasury bill, Lee said.

After Salt Labs tested the product among a pilot group of about 75,000 users in Puerto Rico, the results were promising enough to introduce it to employers, Lee said. The company is now working with 10 to 15 companies that employ about 80,000 workers across the US collectively, and have either launched Salt for their workforces or are in a pilot phase. He said the early results have been promising, citing turnover rates that were 72% lower among Salt users at these companies compared to non-Salt users during the month of November.

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Workers remain dissatisfied with their pay. Even though the US saw record wage growth in recent years, the majority (60%) of employed Americans say their pay hasn’t kept pace with inflation, according to a recent Bankrate survey. Low-income workers were more likely than higher income workers to report receiving neither a raise, nor a higher paying job, since October 2022. A separate survey by on-demand payment and banking company Clair found 45% of frontline workers say their income doesn’t cover daily costs.

Such trends raise questions about why frontline employers would invest in a platform like Salt, rather than grant additional wage increases to workers or expand access to traditional benefits like healthcare.

Lee told us he doesn’t see it as an either-or question, adding that Salt only aims to solve one problem. He also posited that giving workers more control over the rewards they receive could result in a higher engagement rate compared to traditional fringe benefits such as student tuition reimbursement, which may only be relevant for a small share of the employee population.

Lee further noted that the types of benefits that typically reward salaried employees or knowledge workers for sticking around at their jobs—like 401(k) accounts or equity compensation—aren’t typically available to hourly workers. “What we want to do is preserve the work that you’re doing into the future,” he said.

Quick-to-read HR news & insights

From recruiting and retention to company culture and the latest in HR tech, HR Brew delivers up-to-date industry news and tips to help HR pros stay nimble in today’s fast-changing business environment.