More and more employers are considering race, ethnicity and gender when analyzing financial health. Explore how
financial wellness might close gaps.
While we have made great strides toward workplace equality, there are still large gaps. Especially in the shadow
of a global pandemic that has disproportionally affected families of color1, it is an important
employers to recognize any inequalities that may exist and focus on solutions to unify their organizations.
Data from the 2019 Survey of Consumer Finances (SCF) reveals long-standing and substantial wealth disparities
between families in different racial and ethnic groups. The typical white family has eight times the wealth of the
typical Black family and five times the wealth of the typical Latinx family. The data shows the median net worth
of white families at $188,200 compared to Black and Latinx families at just $24,100 and $36,400,
Median Net Worth
To address the wealth gap, employers are increasingly offering a holistic financial wellness program with a wide
variety of topics, including debt management, budgeting, saving, retirement planning and more. For more
personalized guidance, employers may consider offering the services of a financial counselor or Financial Advisor
who will meet with employees individually to discuss their specific financial questions.
To take a step further, consider offering equity compensation benefits (employee stock purchase plans, incentive
stock options and performance shares). More companies are trending toward offering this option to all employees
rather than just management and executive teams.3
Access to physical and mental health care coverage is less common among Black and Latinx workers. This may be
partially caused by an over representation of people of color within industries that traditionally offer lower pay
and fewer benefits such as the service industry or holding gig and part-time jobs.4
No matter the reason, now is an ideal time to address health care disparities in the workforce. Below is a simple
list of recommendations:5
- Improve access to health care
- Evaluate affordability of care in available insurance plans
- Reevaluate the impact of high deductible health plans
- Educate how HSAs and Accident Insurance work to mitigate the financial impact if the unexpected happens
- Request reporting from health care carriers about disparities in care
- Offer and expand sick leave to all employees
- Use inclusive and nonbiased language in all communications
Retirement accounts are an important wealth building channel many families of color have less access to.
According to the Federal Reserve, white families have broader access and participate more in employer-sponsored
retirement plans. Nearly seven out of 10 white families have access to a retirement plan as opposed to only 56% of
Black families and 44% of Latinx families.6 However, access is only one part of the story;
take-up rate also varies across racial lines.
These differences in participation may be caused by a variety of factors, including whether or not a family has
sufficient income to enable retirement savings, level of debt, the types of funds offered by employer-sponsored
plans, plan default options and financial literacy.
Addressing Historical Inequities
As more organizations commit to change, a logical place to start is understanding where gaps may exist in your
To understand the various needs of a diverse workforce, a full picture is needed; this means going beyond just
examining 401(k) metrics.7 A robust assessment should lay out the following by race, ethnicity and
- At least annually, track and monitor 401(k) metrics such as participation rates, contribution rates or
- Examine health-related data, such as insurance claims
- Include financial health questions in employee surveys related to both challenges and what benefits can help
- Engage informal conversations and more formal focus groups centered on financial health
- Track requests for paycheck advances
- Track requests for personal loans (if applicable)
While many companies have embraced equality, diversity and inclusion for some time now, less than three out of 10
employers (29%) analyze employee financial health based on race and ethnicity. Instead, most employers focus on
job classification, age and income level as the way to measure financial wellness.8
For organizations committed to promoting Diversity and Inclusion, it is important to identify any gaps that may
exist and include the needs of these populations in the overall benefits conversation and selection. Assessing the
financial wellness of your workforce and including key demographics such as race, ethnicity and gender can give
employers the data they need to implement targeted solutions to help close those gaps.