Photo by Clay Banks on Unsplash
For the better part of the last decade, Diversity, Equity, and Inclusion (DEI) has been a growing priority for companies of all sizes and industries. In fact, in 2021, nearly half of ~1000 companies surveyed had DEI as a strategic priority.
While this is progress, lots more needs to be done to advance equity and inclusion for all people in the workplace and in society.
One area where today’s DEI programs fall particularly short is financial inclusion.
It's probably already obvious and well known to most folks that America has an inequity problem. And this problem exists in many forms, one of which is in people's financial conditions.
You can take income, wealth, savings, financial education, investing regularity, or any number of other measures that can indicate how one group of people are faring compared to another. And you'll vast gaps between groups in pretty much any of those measures.
Take wealth as an example.
As of late 2021, the top 10% of Americans hold ~70% of America’s wealth. Which means, the other 90% of Americans hold only 30% of America’s wealth. What is worse: the bottom 50% hold a paltry 2.5%. The growth of wealth among the very wealthy has been even starker during the pandemic, throwing a spotlight on the enormity of wealth inequity in the country.
Or let's talk about income.
Between 1970 and 2018, income for households in the upper-tiers increased by ~64%. In contrast, households in the middle-income tiers saw their income increase by ~49%, and those in the lower-tiers saw increases of only ~43%. In other words, the income inequality is steadily increasing decade after decade.
While everyone in the lower- and middle-tiers are impacted, underrepresented communities are disproportionately impacted by the prevailing inequity. Women, people of color, and LGBTQ+ have much less well off compared to the historically advantaged (in aggregate) straight white men of our society.
Let's review some facts that throw light on this problem:
The number of facts and statistics that prove this inequity over and over again is virtually endless.
It's easy to think of this in the abstract; call it a problem in the society in aggregate. We are just one company in that large society.
But the reality is, almost every company has a representative microcosm of this society. There are job roles and people who make much less than other job roles or people. And this is to be expected - we are a capitalistic society after all.
But that doesn't absolve us from the responsibility of providing equity in opportunity and access to appropriate tools so that all employees can manage their finances to the best possible extent.
In theory, every employer wants that anyone who works at their company should be better off for working there than before. Every employer should want that.
An imbalance between rich and poor is the oldest and most fatal ailment of all republics.
This is where companies need to put their DEI strategy to work.
Only a handful of companies have explicitly prioritized financial equity and inclusion for all employees. These companies recognize that there is no overall DEI victory if a portion of their employees are left behind financially.
Every company that cares about their employees' wellbeing should consider 4 actions for advancement. These don't need to happen in sequence - start anywhere; they're all steps in the right direction.
1. If you don't have a DEI strategy, define one
Today, having a DEI strategy is almost as necessary as having an HR department. If you want to attract enough number of high caliber talent to help make your company successful, a conscious and well-defined effort to make everyone feel welcome, respected, and engaged (irrespective of their race, religion, gender identity, sexual orientation, nationality, etc.) is table stakes.
2. Prioritize Financial Equity & Inclusion in your DEI strategy
Tell your employees that the company is aware of the financial hardships of different groups due to systemic issues, and that the company cares about advancing the cause of better equity and inclusion.
3. Formalize pay policies and other equity initiatives
Show your employees that you walk the talk. Equal pay for equal work, transparency in pay, equal opportunity to apply for jobs and promotions, etc. are some examples of putting Financial Equity & Inclusion priority into action.
4. Establish financial wellness program for all employees
Institute a financial wellness program that is tailored to different categories of employees. Your lower- and middle-income employees need something different for financial wellness than your higher-income employees.
When it comes to a financial wellness program, work with partners who truly move the needle for your employees. Single point solutions are not enough - your employees need holistic solutions to make progress.
Financial wellness for your employees is one action that you can take independent of any other. The sooner you start such a program, the sooner your employees start getting the help they need to build good foundations and grow their wealth. And sooner the company makes progress towards its DEI goals.
River is a holistic financial wellness platform for lower- and middle-income employees. Using River, employees can get access to liquidity to manage emergency expenses, use AI to better control their expenses, build a foundation of savings for different goals, develop a habit of investing to grow their money, and much more.
We are designed and built specifically to make real progress for employees. Reach out to us to know more. Send us a note at hello@getriver.co or fill out this brief form.