Bilingual retirement: Addressing the gaps for Hispanic employees

The United States is one of the most diverse nations in the world, and it only continues to grow. Recently, the country has seen a large shift in both population and workforce. The Hispanic population alone grew from 50.5 million to 62.1 million between 2010 and 2020.¹ 

This cultural group is unfortunately facing financial barriers which cause a significant wealth gap.² Case in point: Hispanic households have a median net worth of only $31,700, compared to $187,300 among white, non-Hispanic households.³

Employers have an opportunity — and given the growing Hispanic workforce, a competitive reason — to help Spanish-speaking employees improve their financial wellness. Since 87% of participants surveyed say they are likely to stay with their employer if offered competitive retirement plan services and products,⁴ it’s critical for employers to embrace a multilingual approach. Employers don’t need to break down every financial barrier that Hispanics in the U.S. have, but they should consider providing their employees with empathetic, equitable and engaging resources — no matter which language they speak.

Financial barriers for Hispanic people in the U.S.

There are many factors that can cause a wealth disparity like the one facing the U.S. Hispanic and Spanish-speaking community. Thankfully, researchers have uncovered a few trends that can help us better understand these complex barriers so we can learn how to bridge the gaps.

Lingering effects of COVID-19

Before the COVID-19 crisis, 64% of Hispanics already rated their financial situation as fair or poor, according to Pew Research. But the pandemic only exacerbated this feeling, creating new challenges like wage reductions, job losses and health concerns. A recent survey revealed that Hispanics in the U.S. whose primary language is Spanish were two to three times more likely to have pandemic-related financial problems.⁶

Bigger borrowing needs for students

Student loan repayment is a well-known barrier that affects people’s ability to save.⁷ The Student Borrower Protection Center found that 72% of Hispanic students take out loans to attend college (compared to only 66% of white students).⁸ That means that nearly three-quarters of Hispanic students are unable to start building wealth — for themselves or future generations^9,10 — at the start of their careers. Instead, they must spend years concentrating on repaying their debt before they are financially stable enough to save.

Susceptibility to predatory lenders

Researchers found that the Hispanic community is also dealing with a higher rate of financial illiteracy. The knowledge gap may be caused by cultural differences and a shortage of Spanish-language financial tools and resources. Either way, Hispanic people may be more likely to fall victim to predatory lenders.¹¹ Taking out loans with unreasonable terms and exceptionally high-interest rates can quickly spiral into a goliath amount of debt, causing victims to take out more loans. The resulting vicious cycle can be nearly impossible for them to overcome.

Financial stress is bad for business

Behind these statistics is a mound of real-life stress. This kind of hardship is unhealthy for employees and bad for employers (because a financially-stressed workforce affects the bottom line). According to a recent Pew Research survey of Hispanic employees, over half reported that they worry daily about paying bills, carrying too much debt or their ability to afford health care.¹³ When considering the financial trends above, it’s really no surprise.

Empowering Hispanic financial wellness is a crucial next step for U.S. employers. It may help save money today — by reducing the number of current employees who feel financially stressed — and tomorrow — by attracting and retaining employees from a new, growing talent pool.

What employers can do today

To compete for the top talent, consider providing inclusive benefits and support through multilingual programs. By providing an end-to-end experience in multiple languages (including educational resource, financial tools and support allowed to be translated), you can help create more financial equity among the country’s diverse population — and your employees.

Now, that doesn’t mean that a few translated brochures will magically make Spanish-speaking employees overcome obstacles. A truly inclusive retirement program should strive to understand (and speak to) their culture.

As an example, research shows that Hispanic employees are not as familiar with employer contribution matching (a very common feature of retirement programs).¹⁵ But it’s not because these employees aren’t interested — it’s due to a lack of Spanish-language information about retirement plan benefits. Similarly, the Hispanic community demonstrates more distrust of employer programs and financial institutions.¹⁶ So it’s important to provide empathetic support that will help this segment build foundational trust.

Strive to become more equitable with Voya

Voya’s aspirational vision, Clearing your path to financial confidence and a more fulfilling life, drives us to do our part to remove barriers for all employees. That’s why we’ve invested in retirement program experiences for both English- and Spanish-speaking employees. Everything from our paper flyers to our participant website is created with cultural care.*

With a Voya retirement program, all employees receive:

• Educational resources through Voya Learn®. Voya’s bilingual education specialists host live webinars and on-demand videos, to educate participants on achieving the financial future they envision.
• Empathetic phone support. Voya’s Customer Service Associates include Spanish-speaking representatives who know the culture and barriers those employees face.
• Behavioral Finance-backed digital experiences. Employees can change Voya’s suite of digital and interactive tools to Spanish with the click of a button, including Voya’s participant online retirement experience, budget calculator, the Voya Retire mobile app and more.

To learn more about what Voya can do, speak with your Voya representative or contact us.