How plan sponsors can help keep women in the workforce

The correlation between gender and financial preparedness is a long-standing reality of the American economy, but data shows that the pandemic has widened the divide, putting women at an even greater disadvantage.

Many women had to leave the workforce completely—either due to being forced out by furloughs and layoffs or unable to accommodate both a full time job and the vast amount of unpaid physical and emotional labor needed to take care of their families during this time. The numbers are bleak: According to Oxfam International, the pandemic has cost women around the globe 64 million jobs (~5% of the total jobs held by women) and $800 billion in earnings.

Women who have managed to stay in the workforce are far from unaffected, especially compared to men. Many have had to reduce their hours, manage unplanned expenses and cut back on savings. According to Fidelity Investments Financial Sentiment survey, 79% of women report feeling weighed down by money and stress and 72% are concerned about retirement savings.

This financial stress also negatively affects a business’s bottom line: A Retirement Advisor Council report found that about half of employees who are distracted by their finances spend at least three work hours a week dealing with related issues.

The transition out of the pandemic will be a defining moment for women in the workforce—one that will either see the financial wellness gap continue to widen or reverse course. Benefit plan sponsors have the opportunity to play an essential role in combatting female flight from the workforce and in setting their female employees up for long-term financial success. By prioritizing the specific needs of female employees, they can help ensure these trends start to abate.

Benefit plan sponsors should consider:

Offering more flexible work options.

When the pandemic forced many companies to allow workers to operate remotely where possible, it not only increased public safety but gave employees increased flexibility.

As the country begins to open back up, employers should consider what elements of flexible work (whether it is remote working, flexible schedules or other tactics) they want to keep in place.

Added flexibility often gives women the time needed to accommodate non-work responsibilities like childcare while still being able to do their jobs. Employers that are able to provide flexible options stand to gain a competitive advantage to attract and retain top female talent.

Facilitating opportunities for female employees to openly discuss financial issues and concerns.

We’re all socialized against having regular, transparent conversations with peers about finances, and women even more so than men. But having these conversations can help people feel heard and understood, and allows for the exchange of ideas that help increase financial literacy and encourage savings.

Company-sponsored initiatives like employee resource groups, mentorship programs, and other internal programs can serve as venues to facilitate more open and honest conversations around finances, and can be a great first step in breaking down the barriers around this topic.

Offering financial wellness programs and tailoring them to better suit women’s priorities.

Employers should consider offering or enhancing financial wellness programs for employees. While these programs vary in type, they all aim to help increase employees’ financial literacy and encourage saving, planning, and other beneficial behaviors. These programs also can help increase participation in retirement programs and other savings opportunities.

When crafting financial wellness initiatives, companies should consider how to ensure they address the specific challenges facing female employees—unpaid domestic labor, student loan or credit card debt, taking care of family members, living longer than your spouse and more.

Expanding access to retirement plans or adding phased retirement programs.

While retirement might not be top of mind for mid-career professionals, plan sponsors should do what they can to enable and encourage retirement savings. This is particularly important for female employees, as they often live longer—and thus need greater retirement savings—than their male counterparts. A 2020 CNBC survey found that 19% of working women have no retirement savings, meaning they may not have the funds to cover their expenses after they stop working.

For employers that do not currently offer retirement plans, there are other options to consider, ranging from state-run programs to pooled employer plans through the SECURE Act.

Additionally, legislation was recently reintroduced in Congress that, if passed, would allow greater flexibility for small businesses looking to offer SIMPLE (Savings Incentive Match Plan for Employees) retirement plans to their employees.

Those with existing retirement plan options should assess if they can be expanded to include part-time workers as appropriate.

Plan sponsors should also investigate adding phased retirement options for employees, which allow workers to continue to maintain an income stream as they transition away from full-time work to a part time schedule that ends in eventual retirement.

Maintaining programming aimed at mental and emotional wellbeing.

Financial stress and overall anxiety go hand-in-hand. While most companies increased their mental health resources for employees during the pandemic, this should not be left behind as things start to return to normal. If anything, the events of the past year have proven the value in prioritizing employee mental health and morale.

Effective programs aimed at the specific stresses that unduly impact women can help reduce employee stress, foster solidarity, and demonstrate that employers care about all aspects of their employees’ lives.

It is undeniable that the pandemic has had an adverse impact on women’s financial health and has served to exacerbate already-present issues. Plan sponsors can play a unique role in helping fight these trends—empowering women to both stay in the workforce and grow their own financial health and wellness.

Beth Garner is an Assurance Partner at BDO and the national practice leader for BDO’s Employee Benefit Plan (EBP) audit practice. With more than 20 years of accounting experience, including significant experience serving employee benefit plans and the financial institution industry, she heads BDO’s national EBP team and has EBP audit clients in multiple cities in the U.S. During her time at BDO, Beth has also been involved in several Employee Retirement Income Security Act of 1974 (ERISA) consulting projects. Beth is a member of the American Institute of Certified Public Accountants, Georgia Society of Certified Public Accountants, and Women in Pensions Network – Atlanta Chapter.