Financial Wellness Programs Play a Key Role in Diversity Initiatives
From a once-in-a-century pandemic to the fight for racial justice, the last year has taught us that we need to make the world more equitable and fair.
Many businesses have focused on promoting equality through diversity, equity and inclusion, or DEI, initiatives. These efforts largely focus on addressing bias in the workplace and ensuring diverse employees have equal opportunity for advancement. While these elements are the necessary foundation for DEI, companies can further enhance their initiatives by incorporating financial wellness programs.
The importance of financial wellness
Financial education and literacy are the cornerstones of financial wellness. An employee can't properly save, budget and plan for retirement or work toward other important financial goals if they don't have the tools and knowledge to do so.
Research shows that in the wake of the pandemic, financial education has become even more essential. A PwC study found 38% of employees have less than $1,000 saved for an emergency (PDF), and 54% of them also say money is their top source of stress.
While many people are struggling financially, these challenges are worse for certain groups. Women still make roughly 18% less than men on average. Meanwhile, the unemployment rate among African Americans and Latinos is significantly higher than it is for White Americans. At the same time, there's a persistent racial wealth gap—the net worth of the average White family is eight times higher than the average Black family.
Economic inequality is a systemic issue that requires long-term, multifaceted solutions. One way employers can contribute to closing this gap is by not only giving employees a chance to advance their careers but also providing tools that help them take advantage of their financial resources as they progress in their careers.
We often talk about work-life balance, but this doesn't just apply to employees' personal lives—it also includes their financial well-being. When employees feel more financially secure, they experience less stress. When they're less stressed, their focus and productivity are likely to increase. You may even find financial wellness programs boost engagement and lead to happier employees, which ultimately contribute to better business performance.
Bringing financial wellness into diversity and inclusion
If your diversity initiatives don't currently include employee financial wellness programs, there are a few strategies for integrating them. Your HR team can build your own employee financial wellness program, or you can contract with an outside vendor to provide this service.
Financial wellness programs can include a wide range of offerings. For example, many give employees access to free or low-cost financial counseling to help with situations like credit repair, budgeting or preparing to buy their first home. You also could offer 401(k) on-demand education courses that help employees build their investing knowledge.
Along with on-demand courses, you could invite financial experts or representatives from a local bank to your company to host virtual or in-person workshops on different financial topics, such as paying down debt, how to build an emergency fund or the benefits of a health savings account and flexible spending account. Your program also could include employee discounts for various financial services, such as working with a particular debt counseling service or accounting firm for tax preparation. Many companies also are taking a technology-driven approach to financial wellness by integrating software solutions that employees can use to access financial education, personalized coaching and retirement planning.
Financial wellness programs can enhance the benefits you offer employees—and improve your existing diversity, equity and inclusion programs. Economic advancement is an important part of making the world more equitable. By developing financial wellness programs, your company and other employers can empower employees with the tools, resources and knowledge they need to gradually build wealth and secure their family's financial future.
Talk to your trusted business banker about building a diversity-minded financial wellness initiative that works for your company's budget and your employees' needs.
Financial insights for your business
This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.