Employees are feeling better about their own finances, according to a recent report from Bank of America. Self-reported “good” or “excellent” financial wellness grew to 47%, five percentage points higher than last year.
But these gains aren’t shared equally by all workers. “We see a gender gap, which is getting larger,” says Lisa Margeson, managing director of workplace benefits retirement research at Bank of America. While 53% of men reported that their financial wellness was “good” or “excellent,” just 36% of women said the same.
We reached out to Margeson to discuss the report’s findings and the top actions organizations can take to close the gender gap in financial wellbeing and improve financial wellness. Here are excerpts from our conversation, edited for space and clarity:
What’s behind the gender gap in financial wellbeing?
Women in general are faced with a couple of headwinds. One big one: women tend to have more career interruptions for needs such as caregiving, which pulls them out of the workforce. In our data, we found that caregiving impacts more than half of the employee base, disproportionately women. One of the other areas, and we’ve explored this in other research, is women tend to be a little bit more conservative, less comfortable and confident in areas where it really helps to build wealth, like investing. Compared to men, their lack of confidence in investing tends to impact some of their account balances and their activities.
What are the actions you recommend to address these headwinds for women?
One is having resources available for not only women, but all of their employees who may run into activities that could constitute headwinds in their planning for the future and their financial wellness. For example, communicating often about health savings accounts (HSAs) that they offer, encouraging them to start saving in their 401k, even if it’s a small amount, which can add up over time. Or talking about basic financial habits such as having a budget, trying to stick to the budget, putting a little bit aside towards an emergency savings account each week, even if it’s $50 a week.
Also offer the wellness resources that we found employees want most: online financial calculators, which are a mechanism to measure individual financial wellness and create a personalized plan to improve their financial wellness. It’s a prescriptive way to help someone understand where they are and what steps to take next. There are also employers who are offering education, whether it be webcast or seminars or tools, to help develop good financial skills and habits, including how to manage a budget and other basics.
When it comes to caregiving, we found that one reason these responsibilities result in lower financial wellness is because many workers are not aware of the caregiving resources available to them. Employers, don’t make caregiving a taboo subject. In our report, we found that about half of caregivers are afraid to identify as caregivers because they’re afraid they’ll be treated differently. They’re afraid that people will think that they’re not committed to their job. So first and foremost, talk about caregiving openly. Second, communicate the resources that you have available, whether it’s flexible scheduling or employee assistance programs.