Better Benefits, Lower Costs
Engaging a Diverse Workforce - How You Can Help Your Employees Thrive
Engaging a Diverse Workforce - How You Can Help Your Employees Thrive
According to the American Institute of Stress, 62% of employees have high levels of stress and are experiencing fatigue and a lack of emotional control.
Employees are more stressed than ever, affecting their work life. Thirty-four percent of employees lose 1 hour a day in productivity due to stress. This stress is where employers can step in and help our employees with their concerns. Every workforce is different, with a diverse set of needs. The US labor force is progressively becoming more diverse. Nearly half of employees are women, a quarter are non-white, and more than five percent of adults identify as LGBTQ+. All these numbers are dramatically up from the last several decades. That is why the first and most crucial step is understanding your employees and what they need most.
This article will outline some DEI & B initiatives that you can take to set all your employees up for success, regardless of their diverse backgrounds with the ultimate goal for all employees to thrive and not just survive. Below is a discussion of strategies to consider implementing within your employee benefits plan to help account for the growing, diverse workforce.
Understanding Your Employees
A diverse workforce lays the foundation for employees flourishing, thoughtful employee interactions, and company success. Companies that do not embrace a diverse workforce are not only missing out on the diversity of thought and attracting and retaining top talent but there is a financial cost as well. A 2021 study by the Society for Human Resources Management (SHRM) found that employee turnover prompted by racial bias and unfair treatment in the workplace had cost U.S. employers $172.4 billion in the previous five years, and that number is growing. Companies must actively work to attract and then retain a diverse workforce to stay competitive. Many employers, however, are unsure what that means and how to move forward. Here are three ways to ensure your employees thrive in a diverse workforce:
- Consciously Recruit for Diversity – Employers should review their recruiting strategy and update to actively seek diversity. Diversity recruiting strategies include reviewing job descriptions to ensure the language is inclusive, expanding sourcing efforts to reach underrepresented groups, and creating a welcoming culture. Additionally, hiring managers should be trained to recognize unconscious bias and focus on skills and qualifications.
- Understand Who Your Employees Are – Employers need to know the diverse make-up of their workforce and recognize that one size doesn’t fit all when it comes to employee benefits and that each employee has unique needs and preferences. For example, some employees may prioritize health benefits such as medical, dental, and vision insurance, while others may place more value on retirement benefits such as 401(k) plans and stock options. Drilling down even further into each benefit to meet the needs of your employees will greatly enhance the offerings.
- Evaluate Your Programs – Having diversity programs alone isn’t enough. To ensure your programs are working and employees are thriving, companies must evaluate the effectiveness of these programs. Evaluation of diversity programs can provide valuable insights into whether the program is achieving its objectives, such as increasing the representation of underrepresented groups, supporting employee’s health and financial goals, reducing turnover rates, or improving employee morale. It can also help identify areas for improvement and inform future program design.
Customized Employee Benefits
The traditional one-size-fits-all approach to employee benefits fails to solve the nuanced and diverse needs of employees, yielding both low enrollment and engagement. The workforce and cultural shifts seen in recent years have brought employee values and needs to the forefront. Personalization and flexibility are among the most-requested features in benefit offerings today (Forma, 2022).
To truly support employee wellbeing across all demographics and drive organizational growth, employers should consider benefits that are tailored to meet the unique needs of each individual. By providing benefits that cater to each individual's preferences, forward-thinking companies can demonstrate a commitment to understanding and valuing employees from all socioeconomic statuses, generations, and backgrounds. Here are two benefits that will both drive your DEI&B efforts and engage your people:
- Custom Lifestyle Benefits - In recent research performed by Forma, custom lifestyle spending accounts ranked as the second most valuable employee benefit among all age groups, demographics, and industries - just behind financial wellness 401(k) matching and financial counseling programs. Custom lifestyle benefits can help foster a thriving and engaged workplace by providing employees with the curated health and wellbeing resources they crave. In addition, these benefits can help to improve retention efforts by enhancing your employee value proposition and promoting workforce diversity via individual choice and customization.
- Accessible Mental Health Support – There has been remarkable progress in dismantling the mental health stigma over the past few years, and employees are eager to take advantage of employer-provided mental health resources when they are available and accessible. Though embedded EAPs are available to employees, they yield little utilization - around 2-3% - because they are generally difficult to navigate and communicated poorly. Trends in OneDigital’s book of business indicate that many clients are combatting this mental healthcare disparity by implementing more comprehensive, third-party solutions, realizing dramatic improvements in engagement compared to an embedded EAP (+36%) (Teladoc, 2022).
- When implementing these sorts of changes, it's important to understand the unique lifestyle needs of your people and work to gather feedback on what benefits would be most impactful to them. This feedback will enable you to select the most suitable options for your workforce and provide employees with the best possible experience, both professionally and personally.
Gaps in Retirement Savings
Retirement savings and financial health can significantly impact an employee’s mental well-being. Employees who are more prepared for their future are more likely to have a positive work experience. There is a savings gap for many employees. Around 1 out of 3 non-white households are not participating in a retirement plan whatsoever, compared to only 1 out of 5 white households.
There is also a disparity between LGBTQ and Non-LGBTQ savings rates. A study from the Employee Benefits Resource Institute found that LGBTQ employees making between 35,00-74,999, less than half feel confident they will have enough money to live in retirement. Another staggering difference also exists between those that identify as men and women, with the average 401(k) balance for women being almost $42,000 less than their male counterparts. It is essential for employers to empower women to make the best long-term saving decisions for themselves and their families.
Our employees are struggling to save. That is why we need to anticipate their needs and implement programs to help them save for retirement. Here are a few steps that you can take to help engage with your diverse workforce and help your employees save from a retirement plan perspective.
- Implement auto features like automatic enrollment and escalation.
- These automatic features are tried, and true methods of helping employees start saving and increase their percentage saved each year because they happen automatically for the employee.
- Have a Customized Financial Wellness platform.
- A wellness program with both group and one on one education opportunities will help your employees gain the financial literacy they need.
- Offer an employer match.
- An employer match can incentivize your employee to save.
- Offer ESG funds within your plan's investment lineup.
- Environmental, Social, Governance funds can now be offered in 401k retirement plans and are an excellent alternative for those looking to diversify their lineup.
Engaging Your Workforce
It’s vitally important to have an engaged workforce. As we continue to grow in diversity, we as employers must continue to be ahead of the curve regarding employee benefits and understanding our employees to help them with their goals. As an organizational goal, it is essential to show that you are putting your best foot forward and implementing strategies at an employer level.
Want to read more about how to better prepare your workforce? Check out this recent article: How to Help Your Employees Answer the Question: “Will I Have Enough to Retire?”
Investment advice offered through OneDigital Investment Advisors LLC, an SEC-registered investment adviser and wholly owned subsidiary of OneDigital.