Financial Empowerment Means Asking for the Salary You Deserve. Many Don't Know How. When companies establish financial-empowerment programs, employees and employers experience the benefits.
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Embracing a culture of diversity, equity and inclusion involves more than meeting quotas around hiring and promoting employees or the establishment of ERG's (employee resource groups). It requires meeting the diverse members of your workforce where they are and providing them with the support they need to show up to (and leave) the workplace feeling whole and empowered.
When I started working in the banking field, I was overwhelmed with choices related to benefit selection such as 401k allocations and health-insurance plans. I found out a colleague made 15 cents more an hour than I did because they asked for it, and the bitter taste of a "don't ask, don't tell" culture around compensation prevented me from doubling back and asking for more.
When companies place an emphasis on hiring a diverse workforce, they are bringing on more than a face, a unique name or ethnic background. They are hiring everything that makes that person whole, which includes his or her mindset, beliefs, habits and education (or lack thereof) around money. Since financial compensation is why many seek out jobs in the first place, efforts should be included to acknowledge that.
Here are four ways financial empowerment fits into your diversity strategy.
A co-worker once asked me, "What's it like to be poor?" after I shared a story about some of the ways my family navigated financial struggles when I was growing up. I didn't quite know how to answer the question outside of sharing how it "wasn't fun." There's no way to know the financial background of your employees, but a financial empowerment program can create a platform for people to share their experiences in a safe way and an opportunity for those interested to hear about them without offending.
Assuming everyone wants to talk about his or her humble beginnings can be just as damaging as assuming that everyone comes from the same financial background or is experiencing the same financial foreground regardless of how much money they make. This also speaks to etiquette around soliciting voluntary contributions to gifts for holidays, birthdays and bosses' days or after-work gatherings like company parties or happy hours, where attendees are expected to pay while being social. Employees may feel pressured to participate to hide their financial struggles or priorities, creating additional financial pressures and stress.
A financial-empowerment program can help address wage-gap issues as well as provide education on etiquette around determining market rates for salaries given a particular role, years of experience and location. Glassdoor does a good job of aggregating information to provide a baseline expectation of what an employee's market value might be and often provides a range for what he or she can expect in a particular role based on anonymously reported salaries for the same role and title. The difference between being educated and being empowered is feeling confident about asking for what you deserve; unfortunately, many don't know what to ask for or how to ask for it, and a financial-empowerment program can address those gaps.
Decreased financial stress
An editor with Employee Benefit News writes "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."
A financial empowerment program can address that stress by providing strategies, exercises and resources that not only promote financial literacy, but also introduce the tools needed to address fears, anxieties and traumas related to money management. Race and ethnicity aren't the only factors to consider when creating a diverse and inclusive financial-empowerment strategy.
Personal finance is personal, meaning each employee might struggle with a unique circumstance that is different from the next. Caring for elderly or disabled relatives, being a single parent, being the only source of income supporting a family, medical expenses, consumer and student debt, and more can all influence the way employees view, handle or feel about money.
A financial-empowerment program can provide the tools needed to assess the unique situations of employees and help them come to conclusions about ways to manage those situations effectively. A less financially stressed employee is going to be a more engaged employee, which in turn increases productivity.
Increased employee loyalty
A financially educated employee will likely participate in employee stock-purchase programs (ESPP) and contribute more to HSA's (health savings accounts) and retirement programs like the 401(k) because of an increased awareness of the long-term wealth-building potential each possesses. It's exciting to watch investment balances grow with compounding and the additional employer contribution or match if applicable. Financially educated employees might even opt for incentive payout in company stock, giving the company a cost-saving and tax benefit — a win-win for employer and employee alike.
Creating a financial-empowerment program doesn't have to be difficult. There are many financial coaches available to help provide guidance and structure in establishing the program. A certified financial-education instructor can also conduct workshops and seminars in conjunction with employee resource groups, learning and development teams, or employee summits and retreats to help get you started.