pictureAccording to a recent Bank of America report, employees are feeling more positive about their financial situation: The number of employees who self-reported their financial situation as “good” or “very good” rose to 47%, up five percentage points from last year.
But these gains aren’t distributed equally among all workers: “The gender gap is widening,” says Lisa Margeson, managing director of workplace benefits and retirement research at Bank of America. Fifty-three percent of men say their financial situation is “good” or “very good,” compared with just 36% of women.
We reached out to Margeson to discuss the report’s findings and key steps organizations can take to close the gender gap in financial wellness and improve financial health. Below are excerpts from our conversation, edited for space and clarity.
What is behind the gender gap in economic well-being?
Women in general face some headwinds. One big one is that women tend to have their careers interrupted by caregiving and other needs, which takes them out of the workforce. Our data shows that caregiving impacts more than half of the workforce and is disproportionately female. Another area, and we’ve looked at this in other research, is that women tend to be a little more conservative and less comfortable or confident in areas that really help with wealth creation, like investing. Compared to men, women’s lack of confidence in investing tends to impact some of their account balances and activity.
What actions would you recommend to address these headwinds against women?
One is to have resources available not just to women but to all employees who may encounter activities that could work against their future plans and financial wellbeing. For example, frequently communicate about company-sponsored Health Savings Accounts (HSAs) and encourage employees to start saving, even if it’s just a small amount, in a 401k that can add up over time. Or talk about basic financial habits like making a budget, trying to stick to it, and putting aside a little at a time, even if it’s just $50 a week, into an emergency savings account.
They also provide the health-related resources employees most desire. Online financial calculators are mechanisms for measuring one’s financial health and creating a personalized plan to improve financial health. This is a prescriptive way to help employees understand where they are and what steps they should take next. Some employers are also offering education, such as webcasts, seminars, and tools, to help employees develop good financial skills and habits, including budgeting and other fundamentals.
When it comes to caregiving, one of the reasons these responsibilities lead to poor financial well-being is that many workers are unaware of the resources available for caregiving. Employers, don’t make caregiving taboo. Our report found that nearly half of caregivers are afraid to disclose their status for fear of being treated differently. They’re afraid of being seen as unengaged in their work. So first and foremost, talk openly about caregiving. Second, communicate the resources available to you, like flexible schedules and employee assistance programs.
