Financial Wellness & Employer Brand

How leading companies are taking action on employee financial wellness and income inequality

Experts from Live Nation, Urban Institute, and LG Electronics explain how to support employees right now. Learn more about employee financial wellness programs.
Two overlapping speech bubbles, each one comprised of dozens of people standing together in a large group.

“I have a restricted budget right now. How can I improve my benefit offerings or make new ones?”

“How should I measure progress towards financial wellness?”

“What’s the best way to approach pay discrepancies around race and gender?”

These are just a small sample of questions so many HR and Benefits leaders are asking right now, as America struggles with not only the dual health and economic crisis of COVID-19, but also as we begin paying long-overdue attention to racial inequality. For better or worse, these issues go hand in hand; one of many examples is that Black workers have suffered at disproportionate rates during the pandemic, not only because of pre-existing health conditions but also due to economic inequality — both of which can be traced back to structural racism.

The spotlight on employers to address these issues is brighter than ever before. Whether they’re trying to navigate layoffs, struggling to keep remaining employees safe, or resuscitating sales, the general public has come to a consensus: Companies can, and should, treat workers better. To help employers understand where to start, particularly around employees’ finances, From Day One recently hosted a webinar titled “Pay With a Shared Purpose: Providing Employees With the Financial Benefits to Help Them Get Ahead.” The webinar was moderated by Fast Company, and panelists including Even CEO John Schlossberg, as well as representatives from Urban Institute, LG Electronics, Live Nation, and BASF discussed how to help all employees build financial resilience. Here are the key takeaways from the session.

Start by addressing systemic barriers inside your own company

While 74% of all American workers live paycheck to paycheck, white women still earn only 82 cents on the dollar compared to men. Black, Native American, and Latina women earn 62 cents for every dollar earned by a white, non-Hispanic man. The net worth of a typical white family is almost 10 times greater than that of a Black family. Panelist Kilolo Kijakazi, Institute Fellow at Urban Institute, noted that prior to COVID-19, there were already large racial disparities in employment rates and incomes, and the pandemic has dramatically worsened the situation. She noted that “Employers need to eliminate structural barriers in the labor market, namely racial discrimination in pay, hiring, and benefits.”

To start, as much as they can, employers should provide paid leave. This table-stakes benefit is crucial for essential workers who need to be on the frontlines to ensure the public can get groceries and receive healthcare. This benefits all workers, but it especially helps the most vulnerable parts of your workforce by ensuring they can keep their job — and a continued paycheck — if they or a family member becomes ill.

“If you keep giving everything equally, then everything keeps moving unequally together.”

— Suzanne Usaj, Head of Benefits, Live Nation

The session’s panelists also emphasized the importance of conducting pay equity assessments to adjust race- and gender-based income gaps. They stressed that giving pay raises across the board isn’t the answer. To quote panelist Suzanne Usaj, Head of Benefits at Live Nation, “If you keep giving everything equally, then everything keeps moving unequally together.” Instead, she advises, use an external auditor to make sure that women and people of color are being paid the same as white men who are doing comparable jobs. Equity can also be addressed directly with benefits. For example, Live Nation provides student loan repayment that gets cut off at higher salary bands, and executives pay high premiums for the same healthcare plans that lower-earning employees are paying $50 per month for, or even receiving for free.

Seize the moment: Be bold and make change

The panelists largely agreed that some of the biggest shifts business leaders are experiencing right now is in how benefits are prioritized. Most executives “get” the problem: The average American worker, especially workers and families of color, are struggling. The nation at large has seen the consequences of when people aren’t prepared for financial shocks, largely through no fault of their own. The employers we talk to who are interested in offering financial wellness benefits to their workforce are moving faster than ever before. They’re feeling the urgency because the consequences are right in front of them.

Suzanne Usaj from Live Nation suggests using the moment we’re in to your advantage as a means of helping employees — even if ideas have been floated and data has been reviewed in the past. She notes that in this climate, senior leadership (often white men) is being asked: How are you changing? What are you doing? By calling attention to the needs of the moment, you can influence decision makers to look more closely at initiatives that will provide better equality and outcomes for workers.

Talk to your workers. Listen to the outcome they tell you they’re looking for and then find the best way to get there.

One concrete example of this type of swift corporate response can be seen in Walmart, which in late March, began paying for 100% of the financial wellness benefit offered to hundreds of thousands of associates. While it’s true that this was only a few dollars per associate per month, in practice, it gave workers a completely free way to use savings and budgeting features they may not have previously had access to; it also gave them access to their own earned wages, helping them avoid predatory solutions like payday loans during moments of financial stress.

Ask employees what they need, then decide on a goal

The panelists agreed on this, too: To get to the core of what employees need, start by asking them. Even if you don’t have budget for new benefits in this moment, you can start by gathering the data needed to identify the problem and decide on what success looks like. Talk to your workforce to get a better understanding of what they’re going through — but don’t just write down what they say and leap into action. Listen to the outcome they tell you they’re looking for and then find the best way to get there.

Here’s an example: At Even, we often talk to employers who say their people are quitting for a job that pays $0.15 more per hour, and the continued turnover, and associated need to rehire, is hurting the business. On the surface, it looks like these churning employees want an extra 15 cents per hour — but the real issue at hand is that they have underlying financial insecurity and very few levers to pull, so they’re going to grab at every single one available to them. The issue to address isn’t an extra fifteen cents per hour. It’s broader financial insecurity. Every company and every workforce is different; it’s up to you, as an HR or benefit leader, to understand how you can help your employees best, then build a plan to get there.

Employees have underlying financial insecurity and very few levers to pull — so they’re going to grab at every single one available to them.

Panelists agreed that it’s important to ensure underrepresented voices are heard when you do this research internally. Specifically, Kilolo Kijakazi suggests that when you’re asking employees what they need, you can hold listening sessions where people can express their needs and concerns — but be careful to ensure workers aren’t mixed with supervisors to ensure safe sharing. She also advised that it’s crucial to hold sessions just with employees of color; in her experience, these sessions surface concerns and experiences “that were different from what was heard when inviting employees across the entire organization.” She says that by creating a space for underrepresented voices, you’ll get the opportunity to understand and address issues you may have missed otherwise.

Making financial wellness work

Given that money is the top source of stress in America, and 67% of employees feel stressed about their finances, any research you do around what employees need is likely to surface requests for help with money. As an employer, there are many ways to help here: You can focus on what Usaj refers to as “upstream financial needs,” like lowering healthcare premiums and other things that present themselves as bills: Think pet insurance, pre-tax commuter benefits, and corporate discount programs.

Multiple organizations and research bodies have identified a single key indicator for long-term financial wellness: savings.

You can also work on helping employees build stronger, more stable financial futures with employee financial wellness programs. This is a broad term that encapsulates many approaches — everything from 401(k) programs to financial education seminars — but it’s useful to look to the experts here for definitions. Both the Consumer Financial Protection Bureau (CFPB) and the Financial Health Network focus on spending, saving, borrowing, and planning. Additional organizations and research bodies such as Commonwealth, the Aspen Institute, and the Center for Advanced Hindsight have all identified a single key indicator for long-term financial wellness: savings.

If someone has extra money in their bank account, they aren’t living paycheck to paycheck. They have a cushion to absorb emergencies that make it so they don’t need to use high-interest credit cards, borrow against their 401(k)s, or resort to payday lenders. It also gives people the ability to focus on longer-term plans like securing their retirement savings (something 78% of Americans feel anxiety over). Ultimately, people are responsible and want to do the right thing for themselves, their families, and their futures — but doing it is incredibly difficult.

By focusing on savings, not only are you following the advice of leading experts based on decades of experience — you’re clearly defining success and setting yourself up with the ability to measure it. At Even, the biggest mistake we see with employers embarking upon financial wellness programs is not defining success. To avoid that, employers should do two things: One, enlist a vendor that will provide anonymized employee savings data; and two, rely on the Financial Health Network’s Toolkit for Measuring Financial Health.

To learn more, watch the recording

The mission statement of From Day One, the webinar’s host, states in part that they “explore how companies can build well-grounded values into the business — diversity, responsibility, transparency — and stick with them in an economy driven by disruption.” These values are core to providing employees with what they need to build stronger lives, which in turn strengthens the employee-employer relationship. To hear the full extent of the panelists’ recommendations ranging from benefits, diversity and inclusion, and employee finances, you can watch the full webinar recording.

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