Innovative new research from Voya shows that there are real and impactful differences that diversity, equity and inclusion (DEI) best practices can make to improve financial outcomes. Voya found that employers who prioritize plan design, auto features, financial wellness offerings and connected experiences for employees make a meaningful impact on leveling the playing field for underserved employee populations.
How does this affect your business?
Employers are increasingly focused on driving greater inclusion in the workplace. This includes both broad-based efforts to bring cultural change, as well as a focus on delivering greater financial parity, particularly through the ADP TotalSource Retirement Savings Plan (the “Plan”) and your benefits package offering.
There are benefits of a diverse workforce. Workers with diverse experiences, perspectives and knowledge can challenge assumptions, uncover implicit bias and drive more well-rounded and thoughtful decision-making — which helps a company employ strategies necessary to excel in today’s complex and dynamic business environments.
About Voya’s research
This paper draws broadly from a DEI research study conducted by Voya in June 2022 on the state of workplace retirement savings gaps among underserved employee populations. The study analyzed retirement plan participant data from six plan sponsor clients including Voya, across various industries – retail, financial services, government, consumer goods and utilities. More than 163,000 employees from four employee populations were represented: Black/African American, Hispanic/Latino, Asian and White.
We wanted to better understand opportunities to help employees from different communities manage finances and save for retirement. Voya researchers focused on these three key areas:
- Plan health — participation, savings behaviors, income replacement
- Engagement — digital engagement, web registration, customer service calls
- Financial wellness — protection, spending and saving, emergency funds, debt
Research reveals key findings:
Auto features plan a big role in closing gaps for Black and Latino employees.
Voya discovered gaps in participation rates, savings rates, account balances, income replacement and overall financial confidence. Interestingly, Black and Latino employees with access to an auto enrollment plan have a participation rate two-to-three times higher than peers at employers who don’t have auto enrollment.1
Black and Latino employees are more likely to have inadequate emergency savings and resort to taking hardship withdrawals or loans from their retirement plan.
Seven in 10 Black & Latino employees had inadequate emergency savings compared to less than half of White and Asian employees.1 Inadequate emergency savings can force employees to resort to Plan hardship withdrawals and loans to fund short-term needs. Black employees were more than twice as likely and Latino employees were almost one-and-a-half-times more likely to take a loan or hardship withdrawal than White employees.1
Connected financial wellness programs and education campaigns make a difference.
Voya’s research found that Black and Latino employees tend to lag behind White and Asian employees in using digital engagement tools. While 38% of White males and 47% of White females registered for web access, just 27% of Black males and 35% of Black females did so.1 The numbers were lower for Latino employees: 22% of males and 25% of females.1
Turning the inclusion lens
Because health inequities also undermine the strength and resilience of the workforce, Voya conducted in-depth research on the impacts of health disparities across the Voya employee population — with more research planned. Initial results indicate Blacks and Latinos could benefit from better optimizing benefits decisions. Voya’s research shows that these employees tend to over-insure by signing up for a PPO health plan — even when a high deductible plan would have been a better choice.
Clearly, health and wealth decisions and outcomes are inter-connected. Voya’s innovative DEI research helps employers identify best practices to bring greater financial equity to the workplace. Through getting workplace benefits and savings in sync, a new connected approach can help improve health and wealth outcomes for all employees.
