Custom financial wellness programs for employees of color have been particularly effective at alleviating participants’ financial concerns, according to the new “Workplace Financial Wellness in America” report from Financial Finesse. In a study conducted between April 1, 2021, and December 31, 2022, and based on responses from 34,168 employees, targeted programming for Black and Hispanic employee resource groups led to a 25% decrease in participants reporting high levels of financial stress.
“Employee resource groups are an excellent avenue for helping increase the engagement among people of different demographics,” said Greg Ward, director of Financial Finesse’s Financial Wellness Think Tank and author of the report, in a webinar held on Tuesday. “Every situation is unique. One thing that we have strived to do is work exclusively with each of our client partners to develop a custom approach to addressing the needs of their workforce.”
Black and Hispanic individuals faced the highest levels of financial stress, the Financial Finesse research found. In 2022, the Black and Hispanic populations surveyed were 38% and 28% less likely, respectively, to have a positive cash flow than their white counterparts. Gender also affected the financial preparedness among people of color.
“[People] having a median household income between $60,000 and $75,000 tend to be those on the younger side, but what is troubling is that there is a disproportionate representation of female Black and Hispanic employees within this population,” Ward said during the webinar. “Sixty percent of users of the financial wellness coaching benefit are female, 13% Black, 10% Hispanic. But when you look at the population that’s in crisis level, you can see it’s disproportionately female, disproportionately people of color.”
Black and Latino communities face greater barriers when saving than their white and Asian American counterparts, which can negatively impact retirement outcomes, Voya Financial found in a study released in April. Voya’s researchers found that Black and Latino employees have lower levels of financial confidence: 59% of white and 56% of Asian American employees expressed financial confidence, compared to 43% of Latino and 37% of Black employees.
Ward said Financial Finesse hopes employee resource groups will help close gaps in racial financial wellness. The report found that Black and Hispanic employee resource groups saw a 23% increase in financial resilience among participants. They were able to live within their means, have less high-interest debt and maintain an emergency fund, according to the research. Employees’ retirement confidence doubled, and 34% of participants engaged with an employee resource group for the first time.“People tend to want to work with people who look like them,” said Ward. “That’s why when we look at the marketing information, when we look at the coaches that are delivering the content, we want to make sure that there is diversity and representation of a diverse workforce in all of the communications, as well as the delivery of the initiatives and coaching. I think that speaks to why that engagement number was so high.”