There are stark differences in financial health based on race, ethnicity, gender, age, income, and other factors. Analyzing your data by demographic and job characteristics can help you identify gaps and prioritize your employees’ needs.
Once you’ve gathered the data you need to assess financial health, look more closely at specific employee segments to see where there may be gaps. In particular, workers of color, women, and low-wage workers are more likely than others to struggle financially. These disparities are often the result of historic and systemic barriers that have limited people’s ability to build wealth, access educational opportunities, and advance in their careers.
HR leaders should consider these and other factors when diagnosing their employees’ financial health needs. By first identifying where financial health gaps exist, you can make decisions about where to invest to begin to close those gaps.
A web of systemic factors, many of them deeply rooted in history, have led to unequal financial health outcomes based on workers’ race, ethnicity, gender identity, sexual orientation, and ability, among other characteristics. These include discriminatory laws and practices that have prevented millions of people from accessing quality housing, education, and wealth-building opportunities. Combined with systemic racism, sexism, and occupational segregation, these practices help explain why certain groups – particularly Black, Indigenous, and Latinx workers, and women – are overrepresented in low-wage jobs and are also more likely to struggle financially.5,6
As an HR leader, while you may be limited in your ability to directly influence these broader societal structures, you can consider whether your workplace policies and practices either perpetuate or help to dismantle these inequities.
Many employers are beginning to embrace their role in creating a more equitable society and are investing in diversity, equity, and inclusion initiatives. These efforts must include looking at how different segments of your workforce are faring financially, and honestly assessing whether your company’s policies and programs might be contributing to unequal financial health outcomes among different groups.
For more ideas for how you can promote greater equity for your employees:
If you don’t currently have the data to assess all of these dimensions, you can add demographic questions to your employee survey. However, it’s important for these questions to be optional and to always be transparent with employees about how you plan to use the survey data. It’s also important that the data be analyzed in groups of no fewer than five employees to avoid the risk of identifying specific individuals.
This step can bring to light important differences in financial health among different segments of your employee population. For example, you might find that your Black employees are trailing behind employees of other races when it comes to retirement preparedness. Or, you might learn that a significant portion of your frontline workforce is struggling to pay bills each month. These important trends – which point to opportunities to target your investments and increase equity among different employee segments – can be missed if you are only looking at your workforce as a whole.