Fostering Diversity, Equity and Inclusion With On-Demand Pay
Exploring how on-demand pay can support your company’s DE&I efforts.
Diversity, equity and inclusion are at the forefront of many leaders’ minds as they strive to create work environments where everyone feels welcome. However, financial equity and inclusion is not always discussed as frequently, although it is an equally important piece of this puzzle.
This module breaks down:
How on-demand pay promotes financial equity and inclusion
How on-demand pay supports your employees’ financial well-being
Why financial equity and inclusion should be important to employers
Figures on Economic Inequality
At its most basic level, financial equity and inclusion means ensuring that individuals have equal access to professional opportunities, financial systems, products and services that can potentially lead to wealth generation. Wealth gaps between people of different races, genders and abilities create financial inequity.
1.7 billion adults are unbanked or underbanked
80% of working Americans are living paycheck to paycheck
Only 4 in 10 adults could cover $1,000 worth of emergency expenses
On average, women are earning 18% less than men for doing the same job
For every $1 a man earns, a woman earns $0.82. Broken down by
race, Asian-American women earn $0.90, Black women earn $0.61, Native American women earn $0.57 and Latina women earn $0.54.
Gay men earn 7.4% less than heterosexuals, while bisexual men earn 9.7% less and bisexual women earn 4.7% less.
In 2019, the median household income for White families in the U.S. was $76,000, while the median household income for Black families was $46,000, and for Hispanic/Latin families, it was $56,000.
In 2021, the average credit card balance for White families was $6,940. For Black families it was $3,940, and for Hispanic/Latino families, it was $5,510.
Promoting Financial Equity and Inclusion
One of the easiest ways that companies can quickly work toward greater financial equity and inclusion is by taking a comprehensive look at their benefits packages and considering on-demand pay and financial literacy resources to meet their employees’ needs. Unlike traditional financial wellness tools, on-demand pay can be considered more of a financial inclusion benefit. On-demand pay can empower employees with more choices and opportunities so they can avoid fees by giving them access to their money as they earn it.
By providing employees with access to on-demand pay, employers are providing a much-needed, timely lifeline and cash flow for their employees who may not have bank accounts or banking relationships, or who may simply be bound unfairly by set pay schedules. Although individuals without any banking relationships may lack access to many traditional resources that financial institutions provide, on-demand pay is a resource that can help them save money because of reduced fees from loans, overdraft fees and late fees. Access to this technology also leads to higher job productivity and better retention for employers, creating a win-win situation for all involved.
Supporting Employee Financial Well-Being
Access to on-demand pay has been proven to help users:
Improve their credit scores, now that they can access the funds they need to pay bills on time.
Build their savings – as funds once wasted on late fees, overdraft fees and credit card interest are freed up for savings.
Become more financially independent, as they’re no longer forced to rely on payday loans, pay advances or personal loans from friends and family.
Why Employers Should Care
Today’s employees want to work for a company that honestly cares for their holistic well-being, especially where finances are concerned. 72% of employees who experienced increased financial stress due to COVID-19, and 57% of those who didn’t, prefer an employer who cares about their financial well-being. Operating with a higher level of concern for their employees can help strengthen the employee-employer bond, creating a more mutually beneficial relationship. Specific benefits can come from supporting financial equity and inclusion, because:
Inclusion boosts engagement and retention
Employees who feel included in their organizations are 3x more likely than their peers to feel excited by and committed to their organizations. This has the potential to decrease voluntary turnover and increase retention.
Diverse ideas produce better outcomes
Diversity of thought within an organization is one of the surest ways to promote innovation and gain competitive advantage. That is why companies without a diverse mix of employees and an inclusive culture underperformed competitors by 27% in 2019.
It supports financial equity for all
58% of men rate their financial wellness as good or excellent, while only 41% of women would say the same for themselves. On-demand pay is proving to support financial wellness for those who use the solution.
Financial inclusion creates a more equitable society
Diversity, equity and inclusion is the #1 factor in employee satisfaction and at the forefront of employer agendas in order to create a strong sense of belonging. By helping to remove barriers that women, LGBTQ+ people and people of color often face, companies can empower their employees to succeed personally, professionally and financially.
Financial equity and inclusion is an often overlooked facet of diversity, equity and inclusion. However, on-demand pay technology can be a powerful tool to help foster financial equity in any organization. By helping workers be more financially independent, removing barriers to saving and often a providing financial wellness resource, on-demand pay has the potential to play a large role in fostering financial inclusion.
Sample RFP Questions
When considering partnering with an on-demand pay provider, it’s critical to holistically evaluate each solution you’re considering in order to make the most educated selection. Thoroughly assessing the product experience for employees and employers, as well as security, privacy and compliance for each solution will help you choose the best solution for your company.
Questions to consider asking based on the teachings in this module are:
How does this technology support financial inclusion?
Does this solution include financial wellness tips to strengthen users’ financial literacy?
Receive the Sample On-Demand Pay RFP
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