Inclusive financial education seen as one of the most effective benefits for enhancing DEI by 92% of employers
Inclusive financial education ranked fifth in the top five most effective benefits for enhancing diversity, equity and inclusion (DEI), with 92% of employer respondents noting this was the case. In a further nod to the importance of inclusive financial education, 32% of respondents said they will add the benefit in the next two years to support DEI.
However, despite these positive findings, there is much employers still need to do to improve financial wellbeing for all, as the research found:
Pay, benefits and career development for women
Employers are much more likely to carry out checks on the inclusivity of aspects of the workplace and pay and conditions along the lines of gender than by age, ethnicity/race or parent/carer status. This could be an outcome of legislation in this area – particularly the introduction of mandatory gender pay-gap reporting. However, employers have traditionally struggled to collect data on characteristics such as ethnicity and sexuality. Building trust is crucial to encourage employees to share more information about themselves with their employer.
Financial inclusivity is a particular concern, with only 22% of employers identifying pension contribution gaps (and only 5% doing so for ethnicity), and 18% checking workplace financial products. The gap in pensions savings between women and men – and therefore the quality of retirement that they can expect – is significant. In 2021, Scottish Widows estimated the average gap is £185,000 at retirement.
Financial benefits to support workplace inclusion
There are significant financial implications to parenthood, from lost pension contributions during maternity or paternity leave, through to the cost of time away from the workplace to cover childcare duties.
Benefits such as vouchers and one-off day care cover the cost of childcare in the short term (80% of respondents either already provide this or intend to in the next two years), but only around half of employers have considered longer-term financial wellbeing, such as pension top-ups during parental leave (41% currently offer this) or paid carers’ leave (31%).
According to the Office for National Statistics, 70% of couple parents are in employment (either full- or part-time), and the same number of lone parents work. Creating an inclusive environment for parents is therefore a priority for employers, and benefits that support this are seen as being highly effective.
Parental benefits that offer financial advantage are more effective than those based on time off alone. Although 100% of respondents said that paid parental or carer leave enhances DEI, that number fell to 77% for unpaid leave. Helping employees to continue to save for retirement during parental leave is also highly valued by employees. Of the 41% of companies that offer pension top-ups at present, 65% rated them as extremely effective at improving DEI.
To read more on financial inclusivity and our findings on broader DEI benefits, then download our DEI Benefits Research 2022.
