The role of reward and benefits in diversity20.08.20
Chief Innovation Officer
Last year, HR thought leader Josh Bersin said that he believed employee diversity and inclusion was going to be one of the hottest HR topics of the year for employers around the world - and with good reason. Those global employers in the top quartile for ethic and racial diversity in management teams were 35% more likely to have financial returns above their industry average. In addition, those with diverse executive boards have a 95% higher return on equity than those with homogenous boards. Organisations that have high ratings for inclusion and diversity are 70% more likely to have success in new markets.
The research in this area is now so vast and compelling, we can say with certainty that having a diverse organisation leads to improved organisational performance. There is no longer a need for us to make a business case for diversity at work. But despite the evidence, I still frequently hear from people who say that diversity and inclusion isn’t a reward and benefits issue. So, I asked my HR network what they thought. I surveyed 100 HR professionals online and asked them if they thought reward and benefits played a role in diversity and inclusion. Eighty seven percent told me that they believed it does. But for diversity and inclusion to be successful, it must form an integral part of everything we do as employers and everything that our employees touch. That includes their employee benefits.
Your Employee Value Proposition (which includes the benefits you offer) must offer access to benefits and support for all employees, whoever they are. Examining the demographic breakdown of workplace benefits, a recent report from the Center for American Progress found that workplace benefits vary drastically depending on race and gender. In 2016, only 24% of businesses considered diversity and inclusion a key issue in shaping their employee benefits strategy. However, the most recent data shows us that 60% of employers now say they are planning to incorporate diversity and inclusion into their employee benefits design.
Differing Wellbeing Needs
An often-overlooked area of diversity and inclusion and employee benefits is retirement and financial planning. Ethnic minority pensioners are on average 24% worse off than white pensioners. Things like lower average earnings drive this ethnicity gap. But evidence also highlights very different financial wellbeing experiences between black and white employees. By 2017, only 36% of African Americans participated in the stock market in some way (which includes a 401k) compared to 60% for those of a white racial background.
A new report from the Global Financial Literacy Excellence Center (GFLEC) indicates that one way of addressing the financial wellness disparities between black and white employees is to increase financial literacy for black employees. Those who are more financially literate are more likely to plan and save for retirement, to have non-retirement savings, and to better manage their debt; they are also less likely to be financially fragile.
Discrimination in access to healthcare and leave
A pivotal report by the Institute on Assets and Social Policy (IASP) at Brandeis University called “Not Only Unequal Paychecks: Occupational Segregation, Benefits, and the Racial Wealth Gap,” describes how benefits disparities in the US - including access to affordable healthcare, paid time off, family leave, and more - contribute to lasting detrimental effects to workers. In the UK, discrimination affects wealth accumulation too. These inequalities have a critical long-term impact on the financial security of working people and their families.
Racial discrimination at work
In the UK, the Director of the NHS’ Workforce Race Equality Standard Yvonne Coghill told Newsnight earlier this year that the experience of black staff in the NHS is “very different to their white counterparts”. Across the whole workforce, one in three UK adults experienced or witnessed racism at work and this is having an effect on their wellbeing and mental health. Around a third of employees who have been subjected to racism at work have said they’ve taken a period of sick leave as a result. A recent report published by Time to Change, found there was 'dual discrimination' - discrimination in everyday life due to their illness as well as racial discrimination faced by the majority of black respondents.
LGBT+ health and wellbeing
According to Stonewall, more than half of LGBT+ people have experienced depression in the last year and almost half of trans people thought about taking their life in 2017. LGBT+ youth are four times more likely to self-harm than their heterosexual peers. As a result, your LGBT+ employees may need more wellbeing support than is currently being offered to the general employee population. LGBT+ employees are reported to have worse saving and spending habits than heterosexual employees, too. Prudential found that LGBT+ people are much more likely than the general population to say they need to gain more financial knowledge. Confusion surrounding things like LGBT+ rights and changes in the law are perceived as being barriers to LGBT+ people acquiring better financial education.
The very nature of the kind of online benefits that we offer at Benefex is that they give employees the opportunity to choose the benefits that will support or enhance their lives – whoever they are. That means your benefits package can not only be tailored to what an employee wants, but also what stage of their life they are at.
When employers think about how their benefit schemes are enhancing their diversity and inclusion strategy, better decisions are made. For example, virtual GP services can offer simpler GP access to those less physically abled employees or those that find it hard to travel. Offering financial wellbeing courses specifically aimed at women can help them close the gender financial literacy gap, particularly as women are set to inherit 70% of the future wealth over the course of the next two generations. Whatever the issue and whoever the employee is, catering for their individual needs sits at the heart of any progressive benefits scheme.
The key to diversity and inclusion is making sure that your employees are safe to acknowledge the differences between each other’s lives without bias. From a reward and employee benefits perspective, this means making sure that all your employees can get the support they personally need to live healthy and happy lives. From retirement planning and financial education, to healthcare and wellbeing, we have a responsibility to make sure our benefit designs not only reflect our diverse people but that they support our organisations’ diversity and inclusion goals.
Reward & Racial Diversity: Listen in to our webinar with Andrea Pattico, CPO at MVF – Top of The Sunday Times’ Top 100 Companies to Work For. Let’s go!
Gethin is an award-winning psychologist who has been helping some of the world’s largest organisations to improve their employee experience and wellbeing for two decades. The last 10 years have been spent working as part of the senior leadership team here at Benefex where Gethin leads our thought leadership in the market.
As a frequent writer and speaker on employee experience and employee wellbeing, Gethin has been featured in Forbes, The Guardian, The Huffington Post and The Financial Times as well as all major HR, Reward and Pensions publications. Gethin has been listed as one of the world’s top 101 Global Employee Experience Influencers for the last two years running, is listed on the Employee Engagement Powerlist, is one of LinkedIn’s top global contributors and an Inspiring Leader 2021. Gethin is also a regular keynote speaker, Chair of the UK Government-backed Engage for Success Wellbeing Thought Action Group, a Key Stakeholder in UK Government Transport Employee Wellbeing KPI’s and a Fellow at the RSA.
In 2018, Gethin published his first book - the HR bestseller ‘A World of Good: Lessons From Around the World in Improving the Employee Experience’, which has gone on to inspire HR and Reward teams at some of the world’s best known brands. In 2022, Gethin co-authored his second book ‘Das Menschliche Büro - The Human(e) Office’ a collaboration between leading academics and workplace professionals from across Europe.