Inclusivity is about focusing on the needs of every individual and ensuring the right conditions are in place for each person to achieve their full potential. And it should be reflected in an organisation’s culture, practices and relationships that are in place to support a diverse workforce.
Whilst most organisations strive to provide employee benefits that are fair and inclusive, more can be done to truly meet the needs of a diverse workforce. It’s certainly fair — and legally required — to contribute to an employee’s pension plan, but what about supporting younger employees earlier in their careers?
In recent years, a rising need to pay off student debt has been added to the common desire to save for a deposit on a flat. Initiatives such as diverting company contributions into a sidecar savings account would certainly help generations with less disposable income, delivering a more inclusive approach to saving.
The ‘why’ and ‘how’ of an inclusive culture
The importance of a diverse and inclusive culture is largely a given in HR and C-suite circles. Exploring what more can be done to promote and sustain this attribute begins with a fuller understanding of why it matters, and applying insights to create a more inclusive benefits offering. Diversity and inclusion impact all of the eight influencers of the employee experience (EX), with implications for engagement, performance and reputation.
Truly inclusive cultures create a sense of purpose and belonging, helping people bring their best selves to work each day — motivated to turn up, engaged to perform and determined to make a difference. Inclusion is a fundamental driver of employee and organisational health and success, underpinning everything from physical and emotional to financial and career wellbeing.
So there’s a clear-cut case for ‘why’ inclusion is valuable. The ‘how’ of inclusion can be more of a challenge. Over half (53%) of HR professionals say offering benefits that appeal to a diverse workforce with different preferences is a top challenge.1 In order to truly contribute to the EX and help people feel different about work, inclusivity has to be genuine. Words without actions will ring hollow.
When it comes to employee benefits, perceived inclusion can be tough to achieve. Some, like pension contributions or healthcare provision, may vary by level of seniority or tenure. Ensuring that benefit communications are targeted only to employees who are eligible for them is an appropriate way to avoid misperceptions about fairness. Typically, many benefits are available to all, and people generally expect and accept reasonable differentiation.
There should be nothing to hide, but sensitivity is important. A truly inclusive benefits offering recognises the uniqueness of individuals. And providing choice through relevant options gives people the opportunity to tailor their benefits to their specific needs. Unfortunately, HR systems can act as a barrier to delivering inclusivity.
Take annual leave, for example. In a truly inclusive workforce, people would be able to take their normal, say, 25 days’ annual leave entitlement and the extra five bank holidays as one. In other words, 30 days to take whenever they like. This approach would allow employees from differing religious backgrounds to use bank holiday days to celebrate their religious festivals. At present, most HR systems prevent such flexibility because they class bank holidays as non-working days, and that simply cannot be changed. This is a big challenge for all organisations.
Despite current challenges, moves in the right direction are evident. Inclusivity means all — and organisations are reshaping benefits to meet that standard.
Different leave for diverse family models
Mothers and fathers are now likely to receive enhanced benefits in the same proportion. The number of employers offering either enhanced paternity leave or pay, if not both, has risen from 46% in 2019 to 53% in 2020. And maternity pay enhancements are now offered by 92% of employers, a third (33%) more than in 2019 (62%).1
Parental benefits also show increasing support for diverse family models, with employers more likely in 2020 than in the past to provide benefits to parents opting to raise their children differently, or grow their families in different ways. Adoption policies typically mirror maternity policies in 89% of organisations.1
There’s also a trend towards offering different types of leave. The most widespread is compassionate leave, followed by birthday day off, moving house day and charity/volunteering day.1
The mission critical need for different savings options
Many UK adults have limited savings and are experiencing high levels of financial stress. This situation is critical. A recent survey found that 11.5 million UK adults (22%) have less than £100 in savings. And that was before the pandemic.2
On an optimistic note, employers are well placed to help.
A recent letter to multiple employers from Guy Opperman, Minister for Pensions said ‘I encourage you, if you do not already do so, to offer all your employees a voluntary payroll deducted emergency savings scheme’.3
This move towards the provision of sidecar savings is an example of a more inclusive approach to building up a nest egg, and in practical terms can have a hugely positive impact on financial wellbeing. Younger employees are able to make provision for their retirement whilst also paying off debt or saving for a deposit on a house. Diverting additional pension contributions into a lifetime individual savings account or other savings vehicle that’s tax free — and allows employees more flexible access — is a trend that is expected to continue.
These are just two examples of how employee benefits are being adapted to meet the diverse needs of employees.
Other markers for diversity and inclusion
A deep dive into current benefits strategy, HR systems and third-party providers helps organisations uncover opportunities to make their benefits offering more diverse and inclusive. This is done by asking the same probing questions about all aspects, with an overriding focus on whether they truly value, respect and support people.
To start, the pension needs to offer acceptable fund choices, including options that comply with environmental social and governance (ESG) standards. For Muslim employees, Sharia-compliant fund options may also be important.
Benefits need to show compassion for difficult life situations. For example, is leave available for employees undergoing the strain of caring for a relative with a debilitating disease, such as dementia? There should also be flexibility that acknowledges atypical family structures, and options around bank holidays in line with different ethnicities and religious beliefs.
Considering the modern family, are life assurance or pension benefits for spouses and civil partners supportive of current needs and priorities? It’s important to estimate how many employees will work beyond age 65, and whether insurances continue to provide cover past those dates. Many coverages are still incorrectly limited to the previous default retirement age, whilst others potentially penalise older employees by providing a higher cost over the age of 65.
Of course, every healthy, motivated and productive workforce also requires medical benefits that are equally relevant and accessible to all. All other aspects of employee wellbeing hinge on this.
Ultimately, the goal is to be smart about personalisation of benefits — recognising that everyone is an individual. Diversity and inclusion will simply become intrinsic where organisations focus on personalisation of benefits, communication and the whole EX.
It’s those organisations — the ones that move from perceived tokenism to tangible sincerity — that will be well placed to face in to the future of work, and to help their people feel different about their experience. In turn, helping organisations face their future with confidence.
1. Gallagher, ‘Benefits Strategy & Benchmarking Survey — UK Edition’, October 2020
2. The Money & Pension Service, ‘Building the financial capability of UK adults’, February 2019
3. Letter from Guy Opperman, Minister for Pensions and Inclusion, Department for Work and Pensions, March 17 2021'