As the workplace has evolved over the past decade, employee expectations have, too. The most obvious change? Employees expect their employers to support their mental health and overall well-being. But that’s not it.
Employees are looking for benefits they’ll actually use. It’s time to rethink how you address the needs of your diverse workforce and support employees with more than superficial perks.
It’s time to think about inclusive benefits.
What are inclusive benefits?
Companies have historically taken a one-size-fits-all approach to employee benefits. But as the workforce continues to become even more diverse, the need to adapt and supplement benefits is crucial. Your previously stellar benefits may no longer cover all of your employees or they may be less effective.
While Baby Boomers may have been happy with different healthcare options, Gen X and younger generations may need childcare options on top of healthcare options. When you approach your benefits offerings with a more inclusive mindset, your entire workforce is more likely to benefit, whether an ethnic minority, hourly worker, or Gen Z.
The organizations that already offer inclusive benefits look at their offerings through a diversity and equity lens to understand how to implement a benefits package that makes a positive impact on their entire workforce — like financial well-being tools that give employees flexible access to wages.
What is diversity in the workplace really?
Diversity encompasses more than race or gender — it refers to differences between people. It includes things we traditionally associate with protected characteristics — like sexual orientation, age, and religion — and less obvious differences, like nationality, skills, or socioeconomic background.
It's not a one-off initiative or a value to display on your company website. Diversity is a powerful driver of business success — it's why companies like IBM embrace diversity in the workplace as "good business, not good philanthropy.”
Juliet Bourke, author of Which Two Heads Are Better Than One? How Diverse Teams Create Breakthrough Ideas And Make Smarter Decisions, highlights a few of the many benefits of diversity in the workplace:
"Research shows that diversity of thinking is a wellspring of creativity, enhancing innovation by about 20 percent. It also enables groups to spot risks, reducing these by up to 30%. And it smooths the implementation of decisions by creating buy-in and trust."
Diversity also drives creativity by challenging conventional thinking. And those fresh perspectives generate more innovation—innovation that drives profits. But let's not forget about what happens when you combine diversity and inclusion. Deloitte's research shows results that are even more impressive.
- Organizations with inclusive leaders saw a 70% increase in feelings of inclusion, which led to a 17% increase in team performance.
- Companies with inclusive cultures are two times as likely to meet or exceed financial targets, three times as likely to be high-performing, and eight times as likely to achieve better business outcomes.
Research also illuminates that employees — especially Millennials and Gen Z — overwhelmingly want to work with diverse and inclusive companies. Eighty-three percent of Gen Z said an organization's commitment to diversity and inclusion is an important factor in choosing their employer. Benefits are also high on an employee's list of considerations for choosing where to work.
So, if you want to reap the benefits of a diverse workforce, you need to create an inclusive culture and benefits to attract and retain them.
Why inclusive benefits matter
Chances are that your workforce is more diverse than it was a decade ago. As such, your benefit strategy should be evolving as well to accommodate their needs and desires. If not, you’re likely to run into talent retention, recruiting, and morale issues.
Employees want and expect companies to champion diversity, equity, and inclusion (DE&I), from culture and values to fair and equitable benefits. Aside from meeting candidate expectations, promoting inclusive benefits is good business.
Research from McKinsey shows that companies in the top 25% for both cultural and ethnic diversity were over 35% more profitable than those in the bottom 25%. They’re even more profitable when women are well represented, with nearly 50% higher profiles.
The difference between equality and equity
While often used interchangeably, equity and equality aren't the same. Equality treats everyone equally — they get the same resources, benefits, opportunities. At its core, equality is a good principle, but it lacks context. Equity adds that needed layer of context, recognizing that all employees are vastly different.
Susan K. Gardner, Dean of the College of Education at Oregon State University, explains it best:
“Equality is giving everyone a shoe. Equity is giving everyone a shoe that fits.”
Equity focuses on individual employees and everything that plays into their unique needs. It accounts for the disadvantages or challenges some employees face, like employees needing extra accommodation to perform the same tasks.
When it comes to benefits, you can think of equality vs. equity like this:
- Equality provides every employee with blanket benefits, like private health insurance or retirement plans.
- Equity lets employees customize their benefits, like working remotely to accommodate childcare or a health condition or receiving a stipend to spend on a mental or physical well-being activity of their choice.
Identifying and recognizing your employees' unique challenges, backgrounds, and needs can help you create inclusive benefits that are both equal and equitable.
The business case for inclusive benefits
Aside from being the right thing, there are dozens of reasons to implement an inclusive benefits program, like promoting employee well-being and engagement or attracting top talent.
Employee well-being
Well-being has evolved to include the whole employee — their emotional, physical, and financial well-being. Inclusive benefits address these factors at every stage of an employee's life, promoting overall better employee wellness.
Equitable benefits also address some factors that could lessen the value of your offerings. They look at the disparities many of your employees may face and find solutions that allow every employee to get the most out of their benefits.
For example, a study from Gallup found that nearly half of white employees had easy access to quality care, while only 34% of Black and 36% of Hispanic employees said the same. Inclusive benefits account for these disparities to ensure marginalized groups get equitable access to their benefits. The same goes for the financial insecurity different employees face. While executives may not need financial planning perks or early wage access as often, these benefits could be crucial for younger hourly workers.
Employee engagement
Inclusive benefits help improve employee engagement and retention by demonstrating a commitment to diversity and inclusion. Employees who feel included and like you respect their unique differences are more likely to be engaged and productive. They also have greater employee satisfaction, morale, and innovation.
Company values and culture are core to a diverse, equitable, and inclusive workplace, but benefits also play a crucial part in weaving DE&I into every fiber of your organization.
Recruiting
The war for talent has made a strong employer brand and tangible differentiators essential. Standard benefits won't help you stand out to candidates. They want to work for companies that embrace diversity at every level.
- 76% of job seekers consider diversity an important factor in evaluating organizations and considering job offers.
- 72% of employees want their employer to invest in a more diverse and inclusive workplace.
Inclusive benefits are just one part of creating an inclusive workplace. But benefits packages that support diversity attract more diverse talent who want an employer that understands their different needs.
Your inclusive benefits strategy
Much like your DE&I program, successfully rolling out an inclusive benefits program requires research, data, and an employee-driven approach. Before you reevaluate your benefits, we suggest building out your strategy. Start with a diversity and inclusion audit.
Conduct a diversity and inclusion audit to help you identify your organization's demographic makeup and factors that impact your benefits offerings. Where are your existing benefits falling short? Are you addressing less obvious characteristics like your employees' various socioeconomic backgrounds, financial needs, access to healthcare, or disabilities?
Once you know where you can be more inclusive, start building an inclusive benefits plan. This starts with allowing employees to customize benefits by offering flexible options that give employees the benefits they need, when they need them. Older employees may prefer a retirement plan with a robust company match, while parent employees might need different healthcare plans and college savings options.
Ditch the one-size-fits-all approach — start supporting your employees with the inclusive benefits they deserve. And communicate with your employees so they're aware of what you have to offer.
Be transparent and clear about available benefits and how employees can access them. Choose your communication channels and give employees access to the resources they need to understand and use their benefits, like an employee portal or Ask Me Anything sessions with human resources.
Forbes also suggests going beyond education — empower managers with the tools they need to support their employees and reinforce resources.
After you've done all of the above, measure success. Like DE&I, building an inclusive benefits offering isn't a one-and-done activity. Monitor metrics like usage, employee satisfaction, and what benefits employees aren't using.
Send feedback surveys to employees and candidates about your benefits package to see if there are any gaps, where you can adjust to better serve employees, and what they enjoy most about the benefits offerings.
Use the hard and soft data to make necessary adjustments and continue iterating to create the absolute best offering for your employees.
Potential challenges of offering inclusive benefits
As you roll out your inclusive benefits plan, you may come up against some challenges, like:
- Not fully understanding the needs of your diverse workforce
- Not knowing how to adapt benefits to be more inclusive
- Getting employees to engage with your new plan
Understanding what employees need
As the workplace becomes more diverse, figuring out what employees want and need in a benefits package becomes increasingly challenging. You need to deeply understand your company makeup and which benefits appeal to which demographics. Send employee surveys, create focus groups, and gather as much data as possible to inform your benefits plan moving forward.
Adapting employee benefits
Understanding and acknowledging that employees experience the world differently is key to creating a successful inclusive benefits program. If you don't identify these differences, you'll struggle to adapt benefits to serve everyone equitably.
For example, do all your employees have access to the health benefits you provide? Are there any disparities? Once you answer these questions, you can tailor your offerings. If employees living in rural areas can't easily access healthcare, you can offer online healthcare benefits, like access to dietitians or therapists.
Getting employees on board
Employees may be excited to embrace inclusive benefits, but if you don't communicate effectively or they don't understand how to use them, your efforts may fall flat. Combat this by creating a communication plan before launch and include:
- Specific plan details
- Jargon-free explanations of the benefits
- The value of the benefits
- Different communication channels
- Incentives
- Regular communication — one email isn't enough
- Resources and support
Moving forward with inclusive benefits
We've come a long way with DE&I. Many organizations now embrace employees with diverse backgrounds, perspectives, and experiences. Isn't it time benefits became more diverse and inclusive, too?
Inclusive benefits create equity among employees while recognizing each employee as an individual with unique needs. Inclusive benefits show employees you value their well-being, which boosts employee engagement and retention. It also helps with enticing talent to work with your organization.
The business benefits are clear. But for employees, inclusive benefits aren't about business results — employees expect you to be inclusive and every level, even benefits.
So, when you're ready to roll out your inclusive benefits program, we're here to help. OneSource Virtual (OSV) delivers in-tenant technology and expert services to automate the administrative, transactional tasks of Workday Benefits. With over 1,000 customers and 95% customer retention, OSV is the leading exclusive provider of Business-Process-as-a-Service (BPaaS) solutions for Workday customers.
