The intersection of diversity, equity, and inclusion (ED&I) and financial wellbeing is a critical issue that’s often overlooked. The harsh reality is that certain employee groups experience a disproportionate burden of financial stress with regards to pay and pension. Women and ethnic minorities, for example, often face significant financial disadvantages compared to their peers. Additionally, neurodiverse employees can struggle within traditional workplace structures that prioritise a one-size-fits-all approach. This disparity manifests in both the pay gap and the pension gap, creating a ripple effect of financial stress and further inequality.
Financial wellbeing is more than just a buzzword; it’s a powerful tool in addressing these disparities. Financial wellbeing is a foundational element of employee satisfaction, retention and productivity, with the potential to help mitigate pay and pension gaps in ED&I groups.
What's in this blog?
The gender/ethnicity pay and pension gap
Did you know that women are disproportionately affected by financial stress? Research shows that 48% of women reported being ‘very’ or ‘somewhat’ financially stressed compared to 31% of their male peers. It also shows that the gender pay gap persists, with women earning significantly less than men on average, contributing to a wider wealth gap over a lifetime.
Ethnic minorities face similar challenges. These groups often experience compounded disadvantages, including lower wages and higher rates of unemployment. According to the ONS, ethnic minority workers in the UK earn on average 9.7% less than their British counterparts.
Gender and ethnic disparities can be addressed through these key areas:
- Financial literacy: Financial literacy tends to be lower amongst underrepresented minority women. Access to both literacy and education can build better understanding of financial wellbeing and the options available through government and employers.
- 1-1 coaching: This type of service provides a safe environment for employees to openly discuss their financial situation, goals, aspirations and fears. 1-1 coaching includes assisting employees in using their employee benefits to the maximum potential.
The need for better understanding of neurodiversity
People’s brains work differently, meaning they have different ways of thinking, communicating and approaching problems. Neurodiversity is a rich resource in the workplace that organisations can take advantage of. By understanding your neurodiversity landscape, you can choose financial wellbeing tools that fit multiple styles of employees, ensuring equal opportunity for everyone to be empowered financially.
In terms of financial wellbeing, there are several ways your employee benefits can serve all employees in a beneficial way:
- Consider a personalised solution: this ensures employees get a tailored experience that helps their specific needs and concerns
- Explore solutions which offer 1-1 coaching and 24/7 support: different employees will find value in different types of help services. A solution that offers multiple ways to learn and get support will bring you the best value for your money
- Choose a solution that is easy to use and understand: industry jargon can become complex for employees that have little understanding of financial health. Solutions that offer videos, webinars and ‘gamification’ see better uptake and usage.
Creating a safe space for ED&I to flourish
MetLife’s 2024 Employee Benefits Trends Study reported that 78% of employees who feel good about their financial health are more engaged with their employer. So getting this right is a critical business requirement.
By prioritising financial wellbeing, organisations can take significant steps towards bridging these stark gaps. When employees feel secure about their finances, they are more likely to:
- Negotiate confidently: Financial knowledge empowers individuals to advocate for fair compensation.
- Make informed decisions: Understanding financial products and planning for the future can lead to better outcomes.
- Increase productivity and engagement: Reduced financial stress translates to a more focused and motivated workforce.
Investing in financial wellbeing programmes can yield substantial returns. By providing access to financial education, counselling, and resources, organisations can empower employees to take control of their financial futures. This, in turn, can contribute to a more equitable and inclusive workplace.
