Tackling workplace diversity and inequality should start with helping employees build a strong financial foundation.
BIPOC employees are struggling more with financial stress, according to the American Staffing Association’s latest survey on 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 are concerned.
The stress of financial challenges impacts a company’s bottom line, due to costs associated with low productivity and poor mental health. Financial wellness benefits can be one tool to combat financial stress and provide equal opportunities for all employees.
“In order to make benefits equitable and inclusive you have to make sure that you're actually thinking about different methods to achieve that,” says Ennie Lim, CEO and co-founder of HoneyBee, a financial wellness benefit platform. “We help employers prioritize financial equity, inclusion and well-being in the workplace by reducing the financial literacy gap.”
Lim’s platform, HoneyBee, provides financial coaching, education and 0% APR loans. Eighty-nine percent of users are women, people of color or both, according to HoneyBee data. More than a third of users say they would have turned to high-cost credit to solve financial problems without this platform. Lim believes that the first step in improving workplace diversity and equality is by de-stigmatizing financial help.
“Employers are starting to realize that everybody comes from a different financial education and socioeconomic background,” she says. “They have to give them the tools to make sure that they succeed.”
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Employers can offer HoneyBee’s services for $10 per employee. The platform provides loans directly to employees, instead of going through more traditional banks, which often penalize BIPOC lenders through high interest rates and the inability to bolster their credit score. Lenders deny mortgages for Black applicants at a rate 80% higher than that of white applicants, according to 2020 data from the Home Mortgage Disclosure Act.
Kashable is another platform seeking to
“Often the communities that are underserved are those in greater need,” says Rishi Kumar, founder of Kashable. “All we had to do is not continue to suppress them and be inclusive in our outreach.”
Financial wellness benefits can also provide financial literacy and education to underserved groups. According to the P-Fin index, which measures key areas of personal finance knowledge, just 38% of women answered financial questions correctly. African-American adults answered 38% of the P-Fin Index questions correctly, compared to 55% of white adults.
“It is so important to address financial inclusion in the workplace,” Lim says. “Just because employees are not asking for help, doesn't mean they're not suffering 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
Looking forward, Lim says investing in sustainable, long-term diversity and equality initiatives will be table stakes, especially in the wake of the pandemic.
“Employees need access to additional help,” she says. “We’re looking at a post-COVID world where financial health and programs are going to be must haves instead of just nice to have.”
