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Most Diversity, Equity, and Inclusion (DE&I) initiatives focus on hiring a diverse workforce and ensuring they feel included, supported, and able to bring their authentic selves to work. Three in four Americans are stressed about their finances, with people of color disproportionately affected, largely due to massive wealth gaps and pay inequities. These money woes don't end when employees punch into work. Financial insecurity is a major burden and source of exclusion for underrepresented people in the workplace.
For example, white families on average have 8X the wealth of Black families and 5X the wealth of Hispanic families, and Black college students graduate with $7,400 more student loan debt than their white peers—a gap that triples to $25,000 in the years following graduation. And the pay gap between women and men is well documented.
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Over 40% of workers say their finances control their life, and they spend more than nine hours a week on the clock dealing with issues related to personal finances. For employers, that adds up to more than 12 full weeks a year, negatively impacting productivity and employees' mental health and preventing your team from doing their best work.
Because this chronic stress takes a significant toll on underrepresented employees' overall health, and ultimately the health of the business, companies must make their workers' financial wellness a top priority. Building financial wellness into your DE&I program helps employees and management understand the unique pressures diverse employees face and reduce their finance-related stress. In addition to helping current employees, a well-designed financial well-being benefit can also be a powerful recruiting tool—especially in a competitive hiring environment where 80% of workers have voiced a preference for benefits over a pay increase given the impact benefits have on improved job satisfaction and overall experience.
Here are six quick tips for integrating financial wellness into your DE&I efforts.
1. Offer equitable pay. Start with the basics. Employees can't overcome financial inequalities if they're not receiving equitable compensation and opportunities for growth. Address salary inequalities to make Equal Pay Day in your organization the same for everyone.
2. Conduct financial health assessments. You can't fix what you don't identify as a problem. Unfortunately, less than half of HR leaders have evaluated workers' financial status, so they have no idea what employees need. Include financial assessments in employee engagement surveys, or using more objective methods like anonymous credit reports, to get a sense of employees' financial situations.
3. Meet employees where they are. Use this data and feedback to make informed decisions about financial-wellbeing programs that fit employees' needs. For example, most companies emphasize retirement planning, but for people who are struggling to pay the bills this week, saving for retirement is the last thing on their minds, and this singular focus doesn't meet the needs of an increasingly diverse workforce in the midst of a public health, economic and racial justice crisis. Address the disconnect between what you offer and what employees need by offering options within your benefits strategies and meet the needs of a diverse audience, whether their priorities are focused on saving for a down payment on a home, paying off student loan debt, or managing healthcare costs.
4. Get creative with benefits. Offer benefits that make a monetary impact. Some options include providing student loan repayment assistance, either through direct payments or offering a 401k match for employees who pay their contribution toward student loans debt instead; providing emergency savings funds or contribution toward a 529 plan as part of their compensation; or better yet, offer more flexible "lifestyle funds" where employees decide where the money goes. Some companies even allow employees to transfer the value of unused PTO to an emergency saving or 529 plan.
5. Provide access to tools. Meeting face-to-face with a financial planner may not be feasible for everyone. Instead, think digital-first to offer more equitable access to financial education with apps and tools that provide a hybrid or DIY approach to managing finances through machine learning based on expert advice.
6. Choose partners that fit your business. Working with partners to offer resources and tools can be a smart, efficient way to give your employees what they need. But the quality of those programs is essential—less than half of employees who use them say they've learned a lot about finances. It's best to pick program partners that can flex with the needs of your business and employees over time. This allows you to start small and scale your offerings over time.
Incorporating financial wellness into DE&I programs helps drive employee engagement and retention, and it levels the financial playing field for underrepresented groups. However, making it happen requires effective collaboration between the CHRO, CFO, and DE&I staff, which too often operate in silos and neglect to see the connection between employee satisfaction, inclusion, financial stability, and the growth of the business. DE&I and employee experience isn't just HR's responsibility—it requires cross-organizational partnerships to drive desired outcomes, and that starts with getting all the key players at the table to address the diverse needs of your entire workforce.
Barrett Scruggs is the Business Lead for SoFi at Work, which serves as a loyal partner to a fast-growing community of 900+ employer partners. SoFi at Work is a holistic and data-driven financial well-being benefits platform that offers a full suite of services, tools, insights, and educational resources tailored to address the unique and evolving needs of each workforce.
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