How to boost DE&I with the right benefits

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Life insurance and retirement contributions not resonating with employees? Here’s how to support retention, engagement and diversity with a strong benefits package

FAR FROM being seen as just a ‘hygiene factor’ or a novelty, diversity, equity and inclusion has now become a core part of business strategy for many organisations. DE&I has evolved in leaps and bounds over the last few decades. The last two years in particular have seen companies take a more data-driven approach to their DE&I policies, which has included looking at benefits and compensation as well as manager training and hiring strategies. But while some companies have become leaders in the DE&I space, others are still catching up. To better understand to what extent DE&I practices inform the approach to employee benefits, culture and the work environment of businesses globally, Aon produced its 2022 Global Diversity, Equity and Inclusion Survey report. It surveyed over 1,200 rewards, benefits and DE&I leaders across 55 countries and discovered that, overall, DE&I is a very high area of interest for most businesses.

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“You can ask yourself why the people you need are not joining your firm, or are leaving – and it’s unlikely to be because of a dollar in their base salary”

Alan Oates, Aon Australia

Seventy-four percent of respondents reported having developed a tailored DE&I policy, and 84% identified colleagues responsible for leading DE&I initiatives. Support from senior leadership was also strong (94%); however, when it came to employee benefits, the levels of support varied across companies and regions, with some having a notably broader scope of coverage than others.

When it comes to fostering diversity, equity and inclusion, employee benefits are one of the most useful and effective tools a company can use. According to Alan Oates, Aon’s head of advisory and specialty, employee benefits have “never been more important in the workplace”, and that’s precisely because of the role they can play in supporting diversity. “Twenty years ago, I think benefits were seen as a hygiene factor, and companies were really differentiating themselves on compensation,” Oates says. “However, benefits have taken on a completely different role now.

“It’s become a really important topic for global multinational organisations, as it’s key to how they attract and retain their talent.” Oates points out that if a benefit can help attract or retain someone who might ordinarily have moved on, then you’ve directly contributed to the diversity pool in your organisation. It will also help strengthen your EVP, which you can market directly to potential and existing staff. However, the current problem with most benefits is that they’re paid out on ‘dread events’. An employer paying out four times your salary upon your death is hardly a headline-

“It’s about taking a closer examination of what the needs of the modern workforce are, tailoring your strategy to your needs, and then marketing that message to strengthen your employee value proposition. That message will then ring true because you have the benefits to support it”

Alan Oates, Aon Australia

If your company is in the beginning stages of its DE&I benefits journey, support is available. Inevitably, every company will have different needs, depending on their sector, their size and the type of support they already have in place. Oates says the starting point is always to take stock of where you are today, get a sense of the diversity that already exists in your organisation, and then speak to senior leadership about where your business strategy is heading. You can then look at how diverse your workforce needs to be in order to maximise the skills you will need. “You can then ask yourself why the people you need are not joining your firm, or are leaving – and it’s unlikely to be because of a dollar in their base salary,” Oates says. “You should absolutely do work around your pay, but some groups of people may still feel they’re not getting the kind

of support that they need to really be successful. You need to speak to them and understand what their needs are, and that’s where our survey can really be helpful. You can look at organisations who have already had those conversations and gone through that analysis and think about what you want to build in the future.” Oates notes that one common mistake companies make is simply increasing benefits in line with the median, without considering whether that makes sense for them. This is where outside support and strong data insights can become very valuable, as working with a partner will help you figure out where your gaps are and how to cover them in the most cost-effective way. “It’s a journey,” Oates says. “But over time, every company can get there. “It’s about taking a closer examination of what the needs of the modern workforce are, tailoring your strategy to your needs, and then marketing that message to strengthen your EVP. That message will then ring true because you have the benefits to support it.” For a detailed breakdown of the DE&I benefits offered by companies globally, download Aon’s 2022 Global Diversity, Equity and Inclusion Survey report. For advice on your benefits and DE&I strategy, contact Aon.

Using employee benefits to boost DE&I

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“Similarly, DE&I-driven benefits can provide support with emotional wellbeing, and you can introduce people to preventative support. A lot of our leading clients have pushed to provide benefits for transgender employees, and they see very few claims in that area – but there are one or two. The support those people get changes their lives, and they’re far more likely to stay with the organisation.” Oates says the key message is that benefits can genuinely change lives. When this results in increased engagement and retention, companies should put a lot more value into that spend. But while companies worldwide have been taking great strides in this space, the 2022 Global Diversity, Equity and Inclusion Survey report shows that there are still some gaps to fill. Oates says cost is often the biggest barrier to introducing a broader range of benefits, and some specific areas of wellbeing are still underserved.

Where do organisations start?

One of these is financial wellbeing, with just two thirds of survey respondents using compensation data to identify potential income disparities. As employees face inflation and a cost of living crisis, the importance of financial health is going to increase, particularly as factors like medical costs have a disproportionately high impact on the financial health of lower-paid employees. “Financial wellbeing is also an area that links into every other area of wellbeing,” Oates says. “If you’re not doing well financially, then you’re likely under quite a lot of emotional stress, and it may affect your physical health and social relationships. These things are all linked, and so we spend a lot of time with organisations trying to make financial wellbeing a cornerstone of how they support employees.”

Source: Aon 2022 Global Diversity, Equity and Inclusion Survey report

Strong company focus on DE&I governance and leadership globally

74%

of companies have a tailored DE&I policy

84%

have employees responsible for leading DE&I initiatives

93%

have strong DE&I leadership support and sponsorship

grabbing story, and a retirement contribution won’t resonate very strongly with younger employees. This can reduce the marketing impact of these benefits and won’t deliver the positive, human story-focused message you need to attract the best talent. Oates says that benefits directly targeted to supporting diversity are attractive to many employees and may help companies improve retention outcomes, especially if the benefits package includes flexibility and options. “Diverse benefits can make a big difference to employees’ lives. Take fertility treatment, for example. These programmes won’t appeal to everyone, but for employees who need support to build a family and don’t have the resources, it can be life changing”, Oates explains. “It’s easy to imagine why employees receiving that kind of benefit might feel a sense of connection and belonging to the organisation, and want to stay longer term. By tailoring benefits to meet diverse needs, companies can build a more resilient workforce; they are helping employees while also making it hard for competitors to poach key talent.”

Source: Aon 2022 Global Diversity, Equity and Inclusion Survey report

positive impact of DE&I on engagement

65%

82%

of companies with high engagement have a DE&I definition/policy

of companies with low engagement have a DE&I definition/policy