In the wake of the racial reckoning that shook the world’s conscience in the summer of 2020, many companies rightfully focused their attention on diversity, equity, and inclusion (DEI), measuring worker well-being, engagement, productivity, retention, and advancement. But progress on all of these fronts will be impossible without one foundational element: adequate, equitable wages and supportive benefits.

Written in collaboration with

Written in collaboration with

---

Employers can determine family-sustaining wages in their location by consulting MIT’s Living Wage Calculator. They can provide key benefits including, at a minimum, health insurance, paid family and sick leave, and retirement options that help support long-term financial stability and wealth creation. In addition, leading executives will consider stable scheduling—a critical factor for hourly worker well-being that companies often overlook.

Why it works

Living wages and benefits are fundamental to racial equity, given that Black and Latinx workers disproportionately occupy hourly frontline roles in service industries, which tend to pay minimum wage with limited benefits. As a result, 43% of Black workers and about 40% of Latinx workers earn less than $30,000 per year.

Furthermore, the evidence is clear: Higher wages lead to healthier, happier workers. To enable the strongest outcomes for their employees, executives can take several actions:

• Conduct pay equity analysis and report on results transparently, which helps reduce inequities across race and gender over time.
• Design retirement plans with features like automatic deposit to help workers save for the future, reducing the racial wealth gap over time.
• Provide scheduling predictability and flexibility for hourly workers. This is crucial to employee well-being, as unpredictable schedules are associated with psychological distress.

Explore the Report

10 Proven Actions to Advance Diversity, Equity, and Inclusion

Our research finds evidence that 10 specific tactics—some common, others underused—are particularly effective at advancing diversity, equity, and inclusion in the workplace.

The adoption curve

While wages and benefits differ vastly by geography and industry, the combination of living wages and benefits is still not widely implemented across the US. This is an acute problem in service industries with large, low-wage frontline workforces. For example, health insurance is available to only 27% of low-wage workers. And more than half of retail and food service workers get less than a week’s notice of their schedule. 

Executives have an opportunity to strengthen the business case for living wages and benefits by emphasizing the direct connection to their employees’ engagement and productivity. Given the ongoing, often polarizing debate around this topic, it is especially important for business leaders to take a firm stance. Offering a living wage and benefits is the clearest way employers can indicate that they value their employees. Without this integral step, companies may undermine their other DEI practices.

Take the Assessment

How Is Your Company Doing on Its DEI Journey?

To assess your best opportunities to advance, explore this demo version of the DEI Opportunity Identifier built by Bain & Company and Grads of Life.

How Bank of America took action

Bank of America recently announced its second minimum-wage increase in the US in two years. It will raise its minimum wage to $25 an hour—a living wage in most US markets—by 2025. In addition to competitive wages, Bank of America provides an extensive benefits package. Ranked second best in the industry, it includes affordable healthcare, 16 weeks of paid parental leave, and an innovative employee assistance program called Life Event Services, which provides support to employees for all types of personal and professional challenges.

“Being a great place to work ... means investing in the people who serve our clients. That includes providing strong pay and competitive benefits.”

As of 2019, Bank of America’s employee satisfaction was at a record high. More recently, 92% of its employees said it is a great place to work. And according to a 2021 report by Glassdoor, Bank of America received the second-highest satisfaction rating (4.0 out of 5.0) from employees identifying as Black or African American out of 28 companies analyzed.

“A core tenet of responsible growth is our commitment to being a great place to work, which means investing in the people who serve our clients,” said Sheri Bronstein, chief human resources officer at Bank of America. “That includes providing strong pay and competitive benefits to help them and their families, so that we continue to attract and retain the best talent.”

About Grads of Life

We work with leading employers to create inclusive talent strategies that deliver both social impact and business benefits. Through our data-driven approach, we help companies understand their current positioning and create customized engagements to help them achieve their goals.

Further - Our Global Responsibility

Further is our collective ambition to create a more sustainable, equitable, and inclusive world. A journey to transform businesses and communities for the better.

• Sources

  Bach, Katie and Zeynep Ton. “Why So Many CEOs Don’t Realize They’ve Got a Bad Jobs Problem.” Harvard Business Review, November 15, 2019.

  Bank of America. “Bank of America Increases US Minimum Hourly Wage to $25 by 2025.” May 18, 2021.

  Employee Benefit News. “Bank of America’s employee satisfaction at record high—thanks to its paid parental leave policy.” June 21, 2019.

  Brooks, Khristopher J. “The best companies to work for as rated by Black employees.” CBS News, March 3, 2021.

  Castilla, Emilio J. “Gender, Race, and Meritocracy in Organizational Careers.” American Journal of Sociology 113, no. 6 (2008): 1479–1526.

  Congdon, William J., Molly M. Scott, and Pamela J. Loprest. “How Do We Define ‘Good Jobs,’ and How Do They Affect Worker Well-Being?” WorkRise Network. February 12, 2021.

  Bureau of Labor Statistics. “Employee Benefits in the United States—March 2020.” U.S. Department of Labor. September 24, 2020.

  Great Place to Work. “Bank of America.” Last updated August 2020.

  Hancock, Bryan, Monne Williams, James Manyika, Lareina Yee, and Jackie Wong. “Race in the workplace: The Black experience in the US private sector.” McKinsey & Company. February 21, 2021.

  JUST Capital. “How Bank of America performs on the issues that matter.” Accessed July 27, 2021.

  Schneider, Daniel and Kristen Harknett. “Consequences of Routine Work-Schedule Instability for Worker Health and Well-Being.” American Sociological Review 84, no. 1 (February 2019): 82–114.

  Hanleybrown, Fay, Lakshmi Iyer, Josh Kirschenbaum, Sandra Medrano, and Aaron Mihaly. “Advancing Frontline Employees of Color.” FSG & PolicyLink. January 2020.

The 10 Most Effective DEI Actions

• Express C-suite commitment and formalize accountability

• Adopt a skills-first approach to talent acquisition

• Diversify talent pipelines through work-based experiences

• Provide family-sustaining wages and benefits

• Communicate skills-based career pathways

• Offer voluntary DEI training for all

• Listen to and learn from experiences of employees

• Invest resources in cross-training and upskilling

• Create mentoring and sponsorship programs

• Build a diverse supply chain