Strategies to provide women greater access to financial security
Women still feel less financially included than men. How can employers better support them?
As context for this new data, it’s important to keep in mind there is no one thing acting as a barrier for women; this is a complex, multifaceted conversation we need to have across industries. But it also presents an opportunity for business leaders, particularly those in financial services, to rethink and recommit to how we support women in the workplace, facilitating greater access to the resources they need to achieve financial inclusion and security.
According to recent findings from Edelman, the majority of Americans (79%) trust their employer to do the right thing, meaning employers are well-positioned to provide tools, resources, and guidance to the many women in the workforce who are not confident about their financial situations. Here are steps employers can take today to provide the women in their organization with greater access to financial security.
Expand access to benefits and improve benefit options
The Global Financial Inclusion Index Consumer Pulse found 54% of women feel their employer provides generous insurance coverage, compared to 66% of men. With a persistent wage gap, caregiving responsibilities and less financial confidence, women have different needs and desires when it comes to coverage. Beyond traditional benefits like retirement plans and life insurance, it is worth exploring additional benefits like paid family and medical leave, short-term disability, and employee assistance programs (EAPs) to meet the needs of women employees.
More than 1 in 3 American workers say they are living paycheck to paycheck, with many unable to pay for an unexpected expense. If an accident, injury, or surgery were to take away their ability to work, they would also lose the ability to earn. Giving employees a way to protect their paycheck through income protection benefits like disability insurance provides a greater sense of financial security, thereby reducing stress and providing much-needed peace of mind. This healthier mindset can result in higher levels of engagement, providing a direct benefit to your customers and your company.
When considering additional benefit options for employees, concern over cost doesn’t have to be a barrier. It’s important to keep in mind employers have the ability to pay for all, some, or none of the cost. If there is a specific benefit employees want that’s outside of the benefit budget, providing access for employees to buy that benefit may be enough to help remove a barrier.
Unsure of what benefits would be best for employees? Start the conversation. Ask employees what resources would be helpful for them to make well-informed financial decisions, support their unique needs, and achieve financial inclusion.
Remove barriers to retirement savings
Less than 40% of women feel they will be able to live as they wish in retirement, compared to more than half of men. All employees are facing a patchwork of varied retirement plan designs as they transition employers throughout their careers. We know that women are more likely than men to say that financial wellness feels like “being at peace (without financial stress).” What can employers do to remove barriers to retirement savings and provide much needed peace of mind? Maximizing plan features is a great place to start.
Plan features like auto-enrollment can remove the barrier to saving and investing for employees. Principal’s data shows that fewer than 10% of employees opt out of auto-enrollment. Additional features, such as auto-increase and employer contribution, increase participation among employees and help them save more towards retirement.
Employers can help ensure these benefits are being used by taking a more proactive approach in helping employees’ understanding through increased education and communication around benefits and by offering helpful resources to improve financial inclusion.
Private-public paid leave programs
Paid family and medical leave (PFML) and state disability programs are a strong foundation for employees’ income protection, but it may not be enough for everyone. The increasing number of state PFML programs often leave gaps, given the limitations included in how long employees can be away from work and how much income replacement they provide.
Employer-sponsored short-term disability insurance can work alongside public programs to provide employees with paid leave that ultimately helps keep employees in the workforce. Only 1 in 5 (20%) women say they could easily afford private medical insurance, if needed, compared to 1 in 3 men (34%). Providing benefits that allow women – and men – to protect their paycheck is one critical way to help your employees remain in the workforce.
It’s important to keep in mind the barriers for women’s financial inclusion are complex, and there are many factors at play. But these barriers are not insurmountable. Through conversation, collaboration and a little concerted effort, employers and the financial services industry have a significant opportunity to better support women. By expanding access to and improving benefit options, removing barriers to retirement savings, and exploring public-private programs, we can work towards a more inclusive future. And a more inclusive future will contribute to a more engaged, productive workforce, yielding benefits for employers, employees, and society.
Kara Hoogensen is SVP for Benefits & Protection at Principal Financial Group.