The Case for Diversity and What it Means for Financial Wellness
The lack of women in the financial services industry is no secret, nor is it a secret that many are working diligently to change that. However, it’s important to state the search for a diverse workforce doesn’t just refer to hiring employees of different genders or with different racial and ethnic backgrounds; it can also mean diversity of thought.
Numerous studies have shown that companies with more diverse workforces perform better. The problem that Harvard Business Journal highlighted is that working in a diverse group feels worse than working in a homogenous group. In fact, working on diverse teams produces better outcomes precisely because it’s harder.
After a walk through the US Census data and the case for growing diversity across all kinds of data points, Kelly McDonald offered up ways to work with people not like you at the recent Women In Retirement Conference. I’ll relay my top 3 from her and then I’ll take this over to what it means for retirement plan advisors and financial wellness.
Break the ice / Find common ground: Working with a person different than you — however you define that — is going to feel awkward. You’re meeting a stranger and you’re expected to work closely to a common goal. In order to facilitate that, expect it to feel awkward and search for common ground. Whether that be bonding over kids, dogs, hearing the story of the first concert they attended, what a perfect Saturday looks like, trust must be cultivated and it’s easiest when you can find common ground and appreciate the other person as a human first.
Give people what they want: Regional differences influence menus and grocery store items. There’s a reason that fast food breakfast sandwiches are served on a bagel in NY and not a biscuit. Make sure you know what your audience wants and deliver it in the way they want.
Sometimes people say the wrong thing: We can’t always get it right. But, we can try. And when you spot someone who — through unconscious bias or otherwise — doesn’t understand the implications of what they said, it’s appropriate to point it out as an educational moment, and with some grace. If it’s extreme, work under the framework of “here’s what you said, here’s why it’s inappropriate, and here’s why it shouldn’t happen again.”
Now come with me to the HR office so we can discuss how diversity impacts financial wellness programs.
Let’s ignore the abysmal statistics about financial wellness programs, their low uptake numbers, low completion rates, and lack of outcome measurement for the moment and focus on something else, ok?
One of the things about canned financial wellness programs is that they blatantly ignore diversity among the students. Most wellness programs teach budgeting the same way: write down what you spend and what you make, make the numbers balance by making cuts to your spending, then live within your means. The overall approach is fine. However, this ignores everything about behavioral finance, general psychology, and the intersection of computers and humans. Remember #1, finding common ground? Most curriculums don’t attempt it, and depending on belief structures, may end up being offensive.
Here’s where I’m going with this and what these types of programs leave out:
Routine — or lack of routine — influences how we spend and why we spend. You don’t change habits overnight. Too much change and it’s shown that our mind will simply reject it and go back to homeostasis (the bad habit). Expecting someone to immediately start tracking their spending when they’ve never done it before is a bridge too far and will ensure failure.
Beliefs about money are often founded on half-truths and lies, many of which come from upbringing or the media. A person refused to enroll because “everybody knows that 401k fees are too high and they’re not worth saving in.” (This person had access to an account where the employer paid all the fees!) Another person told me that money came and went fast, so they’d better spend it on something they wanted before it was taken away from them by bills they didn’t want to pay. Last, a woman told me that the only way to be rich was to compromise your morals. Pretty much only bad people were rich. Good luck finding solutions to these problems in a budget worksheet!
Technology has made it easier than ever to access your balance and to make purchases. It’s also made it easier to wrangle your finances all in one place, force savings to happen, and teach you about financial planning — but only if you can find the right set of parameters that work for you, you’re already motivated to take action, or it’s reaching you at precisely the right moment.
We have auditory and visual channels for absorbing information. We also have the ability to drill concepts and learn from being hands-on. And numbers? Well, too many and they’re off-putting to the audience. How financial wellness curriculum is taught is just as important as the information in the lessons due to diverse learning styles and engagement.
I'm sure the wellness providers will all argue with me that they have to provide a scalable solution. However, I recommend this to companies thinking about offering financial wellness: one app is not going to make your group “financially well,” however you define that. Follow Kelly’s take-away #2 and give people what they want! You’re working especially hard to reach your increasingly diverse workforce with the information they need at the time they need it. Work with a provider who understands that one size does not fit all and accounts for it in their program, or will happily run multiple campaigns to reach people.
TL;DR / Final thoughts: When thinking about diversity, know that the best are leveraging it because it’s good for results. (It may not feel as good in the process of getting to those results.) And, the success of your financial wellness program in reaching those who need it most hinges on how diversity is factored into the program and your benefits communications.
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