How to Combine Financial Well-Being and Diversity and Inclusion Initiatives
What can employers do to make sure their financial benefits attract and serve a truly diverse workforce?
This is a question many employers are asking as the COVID-19 pandemic continues to shed a harsh light on the pervasive economic inequalities embedded in society and the workplace. Just consider that the average white family possesses eight times as much wealth as an average Black family and five times as much wealth as an average Hispanic family, according to the Federal Reserve’s 2019 Survey of Consumer Finances. And a landmark 2016 report from the Brookings Institution found that Black students owed $7,400 more on average than white students at graduation, and over the next few years that gap more than tripled to $25,000. Helping employees achieve financial well-being means helping all of them, no matter what the current status of their finances may be.
That’s why it’s important that diversity, equity, and inclusion (DEI) programs and financial wellness initiatives are effectively combined to help address the problems of economic inequality throughout every segment of your workforce.
Where Do Financial Wellness and Diversity, Equity, and Inclusion Intersect?
You probably know from experience that financial well-being can be just as important as physical wellness when it comes to employee engagement, productivity, and positivity.
You’re also likely aware that effective diversity and inclusion programs can be key to many employers’ successful recruiting, retention, and workplace equity efforts. The reason for this is clear. More than 86% of job seekers cite workplace diversity as an important factor in their job searches, according to data from ZipRecruiter.
Understanding how these two human resource pillars work together can help amplify the relevance, effectiveness, and success of both programs throughout your workforce.
Traditionally, financial well-being programs have focused on retirement savings and education programs that were also geared toward long-term savings and investing for retirement. But it’s becoming increasingly apparent that this approach doesn’t meet all the needs of an increasingly diverse workforce currently in the midst of a public health, economic, and racial justice crisis.
Depending on the individual, financial success can come in many forms, not just having enough for retirement. Success might also include paying off debt and saving for emergencies, among other possibilities. Understanding your workforce and its diverse needs–as well as understanding the importance of a broad-based definition of financial well-being–helps put you at the nexus of your DEI and financial wellness goals.
Can Financial Well-Being Initiatives Enhance Diversity, Equity, and Inclusion in Your Workforce?
The answer is an overwhelming yes–as long as your financial well-being programs are designed to be customizable for employees on different financial footings with various financial goals and stresses. Here are some steps you can take to integrate your financial well-being and DEI programs.
Ensure Fair Pay for All Employees
This may seem like a basic concept, but it still needs plenty of attention. Doing everything you can to close the race and gender pay gaps in your organization shows your commitment to both DEI and financial well-being–and to making them work together.
Embrace Flexible Financial Contribution Programs
Personalized, relevant financial benefits can help you meet your employees where they are in terms of financial challenges and goals. When you offer a range of financial well-being benefits, you give employees the power to choose the financial programs that can help them the most.
The pandemic has highlighted for many people the need for short-term, goal-oriented savings as well as long term investing. Emergency savings accounts, student loan repayment programs (including 401(k) matches for employees paying off student loans), and debt management tools can and do resonate strongly with today’s diverse workforce and its many needs. Established college tuition and retirement savings programs are also vital parts of a holistic financial wellness program.
Don’t be afraid to think out of the box when it comes to expanding financial well-being programs so that you can include all employees. Many employers are reimagining traditional approaches to leaves and paid time off–for example, allowing employees to transfer unused PTO balances into accounts like emergency savings or 529 tuition savings plans.
Creativity is also important when it comes to education efforts. Simply offering new programs is not enough. Education efforts should be accessible, interactive, and customized so that each employee can find the information he or she needs and act on it.
SoFi at Work has noticed that some employers are adopting a “learning journey” approach that allows them to choose their own paths depending on where they are on their pathway to their individual financial goals and aspirations.
Choose Credible Partners for a Sustainable Program
To provide this extra support and guidance across a broad spectrum of financial needs, you’ll need to choose credible partners that can provide expertise, platforms, and cost-effective services in specific areas. Good partners can help you launch personalized and sustainable programs that are accessible in the short-term, but also build the foundation for your department’s long-term goals.
Employers can play a key role in ensuring that all employees have the same opportunities for financial success and control of their own financial futures. Democratizing financial well-being can not only help create a more diverse and inclusive workforce, but ultimately a more equitable future for all of us.
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