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Diversity, Equity and Inclusion in Workplace Benefits


Employers 11.30.2020 10 MIN READ

 

The current sociopolitical environment has put Diversity, Equity and Inclusion (DE&I) top of mind across Corporate America. Over recent decades, perspectives in the business community have shifted as more companies recognize the valuable contributions that stem from the knowledge, experience and perspectives brought to the table by diverse individuals. However, simply maintaining a diverse workforce doesn’t necessarily mean that a company is adequately satisfying the DE&I goals of its stakeholders. Companies should also focus on providing equitable leadership and compensation opportunities, as well as employee benefit plans that meet the varying needs of their full employee population.

The impact of these initiatives is clear. Fostering a more inclusive and equitable environment can have a direct impact on recruiting and retaining top talent. Monster.com found that 62% of job candidates would turn down a job if they didn’t feel the company valued workplace diversity.1

Top-down approach

In this vein, many companies are reexamining the work they do to support diverse populations, both among their employees and in the community. Companies looking to foster equity and inclusion should consider starting with a top-down approach—support from senior leadership is essential to alignment of, and commitment to, diversity goals throughout an organization. We have seen some companies encourage leadership to support these initiatives by leveraging diversity objectives in long- and short-term incentive awards. Some notable examples across Ayco’s corporate partners include:

  • Adding diversity as a component of strategic performance goals for executives, with 50% of the annual cash incentive pay tied to achieving these objectives
  • Utilizing a diversity scorecard to award points when the company meets certain benchmarks for hiring, promoting and retaining women and other underrepresented groups
  • Mandating anti-bias training for executives and tying compensation to the successful increase of minority representation by 2025 (30% in corporate operations and 40% in manufacturing and retail roles)


Investors are also pushing boards of directors and senior management to implement holistic approaches for DE&I initiatives. In the continued evolution of ESG investing, the pendulum has swung toward the social and governance aspects in recent years. Investor decisions increasingly are relying on not just how an organization impacts society as a whole, but how inclusive and equitable the organization is as an employer. Read more on ESG investing here.

Company-wide DE&I efforts can help build a reputation for inclusivity, which in turn can serve as an effective tool for attracting and retaining a diverse workforce. This is imperative, especially for millennials, who are projected to make up 75% of the workforce by 2025 and place an increased importance on inclusive company cultures.2

A focus on benefits

A diverse workforce is made up of individuals with varying abilities, challenges and needs—and those diverse features cannot be effectively addressed using a traditional, one-size-fits-all approach to employer-sponsored benefit offerings. It’s critical for employers to understand the needs of their entire workforce and structure benefit offerings accordingly. Here are some considerations for employers to keep in mind as they evaluate the benefits offered to their workforce.

Cash flow and debt management

The stats:

  • 38% of U.S. workers are living paycheck-to-paycheck3
  • Black, Latino/Hispanic and Asian employees are more likely to be providing financial support to extended family than white employees4
  • Four years after earning a bachelor’s degree, 48% of Black students owe more on their undergraduate loans than they did at graduation—compared to just 17% of white graduates5
  • The median net worth of a typical white family is nearly 10 times greater than that of a Black family and nearly eight times greater than that of a Latino/Hispanic family, based on a Federal Reserve Survey of Consumer Finances6


Potential solutions:

  • Financial wellness/education. Financial education benefits are valuable for all employees, but they can be particularly impactful for groups who face unique planning challenges. These benefits can be offered in various forms, including digital tools, group education and one-on-one counseling. Ayco offers a group education program specifically designed to address the financial challenges faced by marginalized groups
  • Student debt assistance. Close to 40% of Ayco’s corporate partners now offer some form of student loan repayment assistance to employees. Most of these benefits are focused on refinancing options.7 In recent years, we are seeing more companies add unique solutions for making employer contributions to student loans, including allowing employees to redirect unused vacation time toward a loan payment
    • Tuition reimbursement. For employees that may not otherwise be able to afford college, tuition reimbursement can be an invaluable benefit. Based on a 2019 International Foundation of Employee Benefits survey on education, 69.8% of companies providing an education benefit offer undergraduate level coursework and 46.5% offer master’s level coursework.8 A majority of the companies included in this survey provide a fixed annual dollar amount between $5,000 and $5,999 per year for salaried and hourly workers
    • Savings/Emergency account. Offering a specific, liquid savings account option for employees can provide an easy and convenient opportunity to build emergency savings through regular payroll deductions. We’ve seen some companies offer access to banks and credit unions with special rates for savings and loans, and some provide access to reliable savings tools through financial wellness benefits. Employers that include the Ayco Marketplace as part of their financial wellness benefit can include an option from Marcus by Goldman Sachs
       
Retirement saving

The stats:

  • Black and Latino/Hispanic employees participate in retirement plans 21% and 40% less than white peers, respectively
  • Only 47% of all employees proactively choose to contribute to their 401(k)9


Potential options:

  • Automatic enrollment. This feature automatically starts new hires off contributing to the 401(k), typically at the percentage needed to maximize the employer matching contribution. The impact is clear; 93% of new hires participate in a 401(k) plan with an automatic enrollment feature, compared to 47% without, according to a 2018 Vanguard study
  • Auto escalation. This feature provides an automated mechanism for employees to increase their contribution rate each year. In the same Vanguard study, two thirds of employees remained with the automatically increased contributions after three years
  • 401(k) options. When designing a 401(k) plan, it’s important for employers to include a broad array of investment options, including ESG funds, to address the personal needs and desires of a diverse workforce. Final DOL regulations were recently released that provide guidelines on selecting investment options—refer to this Insight for more details

 

Caregiving benefits

The stats:

  • Significantly more Latino/Hispanic, Asian and Black caregivers report providing care in their homes than white caregivers
  • Latino/Hispanic, Asian and Black caregivers provide an average of 24 to 31 hours of care each week
  • Latino/Hispanic, Asian and Black caregivers have been providing care for an average of four to five years
  • As a result of the COVID-19 pandemic, more than one in four women10 are considering either reducing hours or leaving their jobs entirely due to the added strains of child and elder caregiving11
     

Potential solutions:

  • Flexible work schedules and paid leave. Offering employees the opportunity to set their own schedule or take additional paid leave provides the flexibility to work around care needs without fear of financial consequences. As the COVID-19 pandemic put more strain on employees caring for elderly family and children, many of Ayco’s corporate partners expanded paid family leave benefits this year
  • Back-up care benefits. Nearly 40% of Ayco’s corporate partners now offer access to subsidized back-up or emergency care. When regular care is unavailable for an employee’s loved one, these programs provide care assistance through a database of fully vetted caregivers.12 Typically, they offer employees a fixed number of days per year (10–15 days on average). To meet diverse needs, it’s important the care can be provided either in-home or at a care center. Common providers used by Ayco’s corporate partners include Bright Horizons, Wellthy and Care.com
  • Dependent Care FSA (DCFSA). This type of account allows employees to save pre-tax dollars for dependent care expenses throughout the year. Currently, a very small number of Ayco corporate partners also provide a contribution to employee DCFSAs


For more information about care benefits, read Solving COVID-19 Child Care Challenges and watch our recent webinar Investing in Your Employees with Care Benefits.
 

Family planning

The stats:

  • 1 in 8 couples experience fertility problems13
  • Nationally, 21% of same-sex couples are raising an adopted child, compared to just 3% of opposite-sex couples14
  • Successful infertility treatments can cost as much as $60,000–$70,000, according to various studies

Potential Solutions:

  • Adoption/Surrogacy Assistance. Over 40% of Ayco’s corporate partners currently offer some reimbursement for costs associated with the adoption or surrogacy process. The most common reimbursement benefits are $5,000 or $10,000 per adoption and $10,000 or $15,000 per child for surrogacy.15 While these are valuable benefits, an average adoption can cost over $30,000 and a surrogacy can cost in excess of $70,000
  • Infertility coverage. Many of Ayco’s corporate partners are expanding their benefits by increasing what’s covered under existing health plans and adding dedicated fertility benefits. Vendors such as Progyny and Ovia Health provide fertility benefit solutions, including in vitro fertilization (IVF), egg freezing, pre-implantation genetic screening and personalized support when employees are looking to grow their family
  • Parental leave. In recent years, employers have increasingly expanded parental leave benefits to account for diverse parenting situations. Beyond standard maternity leave, many employers are now offering leave for fathers, domestic partners, foster parents and individuals acting in lieu of a parent. Employers are also increasingly upping the amount of leave permitted for adoptions and surrogate births


For more additional information on this topic, read Benefits for the LGBTQ community: What does it mean to be inclusive?

 

 

 



1https://www.forbes.com/sites/heidilynnekurter/2020/06/30/6-ways-to-cultivate-a-workplace-culture-that-inspires-diversity-and-inclusion/?sh=5bed3b2931ae

2https://www.weforum.org/agenda/2015/02/3-ways-millennials-are-changing-the-world-of-work

3Willis Towers Watson 2019/2020 Global Benefits Attitudes Survey

4Source – Fidelity 2020

5Department of Education’s Baccalaureate and Beyond 08/12 survey

6https://www.federalreserve.gov/econres/scfindex.htm

7Based on data from 200 Ayco corporate partners, as of October 2020

8Educational Assistance Survey, International Foundation of Employee Benefit Plans, Inc., March 2019

9Vanguard, Feb 2018

102020 McKinsey Women in the Workplace study

11National Alliance for Caregiving (NAC) and AARP, Caregiving in the U.S. 2020 (Washington, DC: NAC and Washington, DC: AARP, May 2020).

12Based on data from 200 Ayco corporate partners, as of October 2020

13CDC, National Survey of Family Growth, 2006-2010

14https://williamsinstitute.law.ucla.edu/research/parenting/how-many-same-sex-parents-in-us/

15Based on data from 200 Ayco corporate partners, as of October 2020

 

For disclosures relating to this article, please click here.