Last year, headlines about The Great Resignation were everywhere along with stories about “quiet quitting” and hiring difficulties. Whether it was burnout, insufficient pay, or desire for better benefits, there were many reasons employees were dissatisfied. Among these reasons, there was a major contributing factor related to how companies approach Diversity, Equity and Inclusion (DE&I).
One recent survey found nearly a third of employees are dissatisfied with their employer’s commitment to DE&I.1 The survey found a direct correlation between employees and their likelihood to want to leave a company if they think diversity in cultures and backgrounds are not respected, if their company is not committed to DE&I, or if their company does not provide diverse offerings for a diverse workforce.2
A commitment to DE&I has to go beyond a simple written statement. It starts with a holistic understanding of how people of color, women, and people with disabilities have traditionally been at a disadvantage in the workplace, which may provide insight into the needs of these groups and how companies can meet them. This includes understanding the differences in both personal pay and household wealth that are starkly evident when broken down into racial categories. For instance, on average a White family holds eight times more wealth than a Black family and five times that of a Hispanic family.3 When it comes to take home pay, the median White worker earned 25% more than the median Black worker and 28% more than the median Hispanic worker.4
Companies who want to stay competitive and retain talent must show how they value DE&I through pragmatic initiatives that speak to the needs of employees of color, women, and other groups who may have been at historical disadvantages. One way to do this is through employee benefits programs that focus on financial wellness– the confidence of employees that they can meet current and future financial needs is the first step in the right direction. With an understanding of historical inequalities and current disparities, Kashable is a financial wellness program offered as an employee benefit which provides an opportunity for employers to support employees of every background.
Reasons to focus on financial wellness become even more clear when we look at how income inequality is even greater when gender and race are considered together. According to the U.S. Government Accountability Office, “women earn about $.82 for every dollar men earn; Hispanic or Latina women earn about $.58 and Black women earn about $.63 for every dollar White men earn.” However, the degree of the pay gap is even greater for those who do not have a college degree.5
All of these statistics are part of a bigger picture of economic inequality and speak to the need for a greater understanding of financial wellness and what is needed to support employees. The Consumer Financial Protection Bureau defines financial well-being as “a condition wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow them to enjoy life.”6 This condition is determined by how much control people feel over their everyday finances and spending, their ability to meet an unexpected expense, progress toward financial goals, and their ability to enjoy life beyond just “getting by.”7
In order to equalize the financial scales, it’s important to address pay inequality. The effects of lower average wages likely influence the prevalence of lower credit scores in Black and Hispanic Americans– 54% of Black Americans and 41% of Hispanic Americans report low to no credit as opposed to 37% of White Americans.8 Lower credit scores and less income are major factors in access to loans for big purchases such as homes and automobiles, and both impact whether individuals are able to save and invest for the future as well.
These interrelated factors within the context of the definition of financial wellness highlight the need for new strategies and approaches to increasing access to financial tools and resources for people of color, women, the disabled and all groups affected by systemic inequities. With this understanding, Kashable is leading the way to financial wellness for working America. As Kashable low-cost loan offerings take employment history into consideration, rather than credit score alone, we partner with employers to add financial wellness offerings to a more diverse pool of applicants. Kashable’s loans help allow employees to avoid borrowing from retirement savings or relying on credit cards and cash advances, as we provide employees with a financial safety net to fall back on.
Besides low-cost loans, Kashable’s financial wellness program prioritizes employees and guides them on their path to long term financial wellness. We offer free credit monitoring, live one-on-one financial coaching, savings accounts, and financial literacy resources. Our financial wellness program can offer crucial support for employees as they start or continue to strengthen their financial wellness and helps to signify the DE&I efforts of employers.
[1] https://www.prnewswire.com/news-releases/dei-critical-to-talent-retention-especially-among-younger-employees-according-to-buck-hr-survey-301560145.html
[2] https://www.prnewswire.com/news-releases/dei-critical-to-talent-retention-especially-among-younger-employees-according-to-buck-hr-survey-301560145.html
[3] https://www.federalreserve.gov/econres/notes/feds-notes/disparities-in-wealth-by-race-and-ethnicity-in-the-2019-survey-of-consumer-finances-20200928.html
[4] https://www.pewresearch.org/fact-tank/2016/07/01/racial-gender-wage-gaps-persist-in-u-s-despite-some-progress/
[5] https://www.gao.gov/products/gao-23-106041
[6] https://www.consumerfinance.gov/consumer-tools/educator-tools/financial-well-being-resources/
[7] https://www.consumerfinance.gov/consumer-tools/educator-tools/financial-well-being-resources/
[8] https://www.cnbc.com/2021/01/28/black-and-hispanic-americans-often-have-lower-credit-scores.html