Supporting Diversity With an Inclusive Financial-Wellness Program

BY Erika Riley | November 02, 2022

During the post-pandemic labor shortage, power in the hiring game has shifted into job seekers’ hands, enabling them to demand more support and benefits from employers. So if you’re looking to attract new talent, it’s imperative you offer benefits and a financial wellness plan that appeals to a diverse range of employees.

“Frankly, the pressure is on to offer more than just a 401(k) in the last few years as the mounting financial needs of Americans continues to change. While benefits used to mean health insurance and a retirement savings plan, employees have grown to expect and need much more support from their employers,” said Harlyn Croland, the head of business operations and strategy for Betterment at Work, a platform to help employees meet their financial goals.

At From Day One’s August virtual conference on offering workers dignity, purpose, and fulfillment, Croland presented a thought-leadership spotlight on how employer commitments to diversity, equity, and inclusion (DEI) can be supported by having innovative and thoughtful financial-wellness programs.

While the Great Resignation has eased in recent months, employees are continuing to leave their jobs en masse, seeking better pay, benefits, and better work cultures. A Betterment study estimates that one in four employees will leave their job this year. At the center of this issue is DEI, which Croland said is vital for companies to prioritize.

“Unfortunately, like many other areas of work in life, financial wellness has an inclusivity problem. Underrepresented minorities seem to encounter disproportionate barriers to entry towards financial stability,” Croland said. DEI must not only factor into a company’s hiring practices, but also into its benefits and financial-wellness plans. Companies can focus on three areas of financial wellness to help diverse employees: student-loan debt, wealth-building options, and personalized financial literacy.

The Long-term Burden of Student Loans

Student debt doesn’t just affect entry-level and younger employees; many people have student debt well into their later adulthood, with the average borrower taking 20 years to pay off their loans. “By acknowledging that student loans affect diverse populations differently and offering a broad range of student-loan management options, you’re signaling that your company values are meeting its employees’ needs no matter their demographic group," Croland said.

Betterment at Work offers student-loan management plans that allow employees to manage their loans in one place. The portal offers advice about which loans to prioritize and how much to contribute to monthly payments to reach their financial goals. Employers can also choose to match their employees’' contributions in the Betterment app.

A Diversity of Needs and Resources

Wealth-building options, retirement savings plans, and financial literacy can vary significantly between different groups. For example, only 39% of women have three months’ worth of living expenses saved, compared to 55% of men. “If you want to build a loyal diverse employee base, help them build for the future through wealth-building options that serve their specific needs. What better way to show your employees that you want them to stay for the long haul than by supporting them for the long haul?” Croland said.

Harlyn Croland, the head of business operations and strategy for Betterment at Work (Company photo)

When it comes to saving for retirement, Croland considers the 401(k) the bare minimum a company can provide. But the 401(k) can be used as a step towards employees’ financial wellness. The Betterment platform encourages users to save for the lifestyle they want to reach or maintain in retirement, in addition to saving for other life events such as a down payment or a child’s education.

Employers can offer financial benefits beyond the 401(k). According to a Betterment survey, the top three most-requested benefits from employees were a high-quality 401(k), matching programs for retirement or charity, and flexible spending or health-savings account. Employer-sponsored emergency funds and student-debt repayment programs also ranked toward the top.

“You could be missing out on diverse talent by not acknowledging these discrepancies and offering financial well-being programs that help combat them,” Croland said. “If an individual’s most important big-ticket items are not met, they may very well begin to look at opportunities elsewhere.”

Making Benefits Visible and Accessible

Even if employers already have these benefits, it’s essential that they educate your employees about them. Croland suggests adding visibility to benefits by creating a Slack channel where employees can ask questions about finances and benefits, and HR can post any updates. Betterment hosts weekly town-hall meetings where they often discuss benefits, knowing that the entire company is present.

Financial education in the workplace can take many forms. Holding biannual 401(k) workshops is one way to encourage employees to think about their retirement savings beyond just tax season. Doing so can help them “reassess goals, address unforeseen financial occurrences, and learn more about legislation that may be impacting their savings,” Croland said.

These workshops can also help employees understand their 401(k), which can be confusing for many not already familiar with them. “Learning about how to take advantage of a 401(k) can be confusing and filled with jargon,” Crolan said. “And maybe someone is a little bit embarrassed that they don’t understand the difference between a safe-harbor contribution or an employer match.”

Croland’s concluding suggestion was to survey your employees to see what benefits they’re aware of and where they may need more support. Doing so can help you guide any changes to your benefits or outreach initiatives. “Although adding a financial well-being program won’t solve every financial problem, it can make a positive impact,” Croland said. “Additionally, many companies taking these little small steps can lead to a much bigger impact for their employees down the road, and it’s clear that employees want their employers to promote diversity, equity and inclusion.”

Erika Riley is a Maryland-based freelance writer. 

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