How financial wellness can improve workplace diversity
Tackling diversity and inequality in the workplace should start with helping employees build strong financial foundations.
BIPOC employees face more financial stress, according to the latest American Staffing Association survey of the workforce – 65% of Hispanics and 58% of blacks are worried about being able to pay their rent or mortgage. Of those who identify as white, 44% said they were concerned.
The stress of financial challenges affects a company’s bottom line because of the costs associated with low productivity and poor mental health. Financial wellness services can be a tool to combat financial stress and provide equal opportunities for all employees.
“To make benefits equitable and inclusive, you need to make sure that you are actually thinking about different ways to achieve this,” said Ennie Lim, CEO and co-founder of HoneyBee, a platform for financial wellness perks. “We’re helping employers prioritize financial equity, inclusion and wellbeing in the workplace by closing the gap in financial literacy.”
Lim’s HoneyBee platform offers financial coaching, education and 0% effective loans. According to HoneyBee data, eighty-nine percent of users are women, colored people, or both. More than a third of users say that without this platform they would have taken out expensive loans to solve financial problems. Lim believes the first step in improving diversity and equality in the workplace is to de-stigmatize financial aid.
“Employers are beginning to realize that everyone has a different financial education and a different socio-economic background,” she says. “You have to give them the tools to make sure they are successful.”
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Employers can offer HoneyBee’s services for $ 10 per employee. The platform lends directly to employees rather than going through more traditional banks, which BIPOC lenders often penalize with high interest rates and the inability to improve their creditworthiness. According to the Home Mortgage Disclosure Act 2020 data, lenders are denying mortgages to black applicants at a rate 80% higher than that of white applicants.
Kashable is another platform that tries to create the financial prerequisites for minorities with its services. Providing financial education, cheap loans, and credit checks, Kashable works with corporations and human resources departments to bring this resource directly to employees.
“Often times, the communities that are under-served are the ones that need more,” says Rishi Kumar, founder of Kashable. “All we had to do is stop suppressing them and include them within our reach.”
Financial wellness services can also provide financial literacy and education to underserved groups. According to the P-Fin Index, which measures key areas of personal finance literacy, only 38% of women answered financial questions correctly. African American adults answered 38% of the P-Fin Index questions correctly, compared with 55% of white adults.
“It’s so important to address financial inclusion in the workplace,” says Lim. “Just because employees don’t ask for help doesn’t mean they don’t suffer in silence.”
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As employers look at diversity efforts, financial wellness benefits are a critical piece of the puzzle. While 100% of respondents said that diversity, equal opportunities and inclusion were “extremely relevant” or “very relevant” to them, only 33% said measures to achieve the DEI goals were an immediate priority, according to HireVue.
Looking ahead, Lim says investing in sustainable, long-term diversity and equality initiatives will be on the table, especially after the pandemic.
“Employees need access to additional help,” she says. “We are looking at a post-COVID world where financial health and programs will be must-haves rather than just nice ones.”