Diversity and inclusion are foundational to our culture and vital to our continued success as an organization. As a company operating in more than 80 markets, we’re committed to advancing inclusion, representation, accessibility, and equality within our workplace, our business practices, and the communities in which our more than 17,000 employees and the more than 34 million customers we serve live and work. This collective focus is the lifeblood of our global purpose: to foster a world where financial security is accessible to all.
We’re committed to accountability in these efforts as well as all efforts. Some of our goals for 2021 include:
- Maintaining our existing engagement and inclusion indices this year. The 2021 engagement target will have the enterprise balanced scorecard at 83% (we exceeded the 2020 engagement index target of 76% by 7 points).
- We will reach an inclusion index score of 80% or above. Our inclusion index measures:
- culture of learning and trying new things
- employees being comfortable being themselves
- a supportive environment for sharing ideas and
- employees feeling valued and respected.
- We named our first woman vice president in 1991.
- We named our first woman senior vice president in 1998.
- We named our first woman executive vice president in 2004.
- Two women became our first division presidents in 2015.
By tracking our progress, we can ensure appropriate attention and resources behind the policies and actions with the greatest potential to make a difference.
The Human Resources Committee of the Principal Board of Directors reviews the diversity of the Company’s workforce as well as other progress against its global inclusion strategy.
In addition, we have multifaceted Environmental, Social, and Governance (ESG) efforts, guided by an overarching strategy that’s derived from company-wide contributions. Our ESG Task Force, comprised of leaders from across the business, meets monthly to chart the course and ensure alignment with internal goals and third-party standards, including those of the United Nations Global Compact, which we joined at the Participant level in January 2021.
We also take inspiration and guidance from forward-thinking business groups including the Business Roundtable and CEO Action for Diversity & Inclusion, which affirm the increasing importance of ESG efforts today and for future generations.
Learn more about our ESG key initiatives, including more of the goals and metrics we’ve established for 2021.
D&I isn’t new to Principal, which has a longstanding commitment to diversity and inclusion: Principal recognized the value of diversity almost 50 years ago by adding our first female board member; and we’ve had minorities on our board for more than 20 years. Our longest-serving female board member joined in 1992.
Today, 50% of our C-Suite are women, and women and minorities make up 64% of the independent members of our board. We have 13 employee resource groups. They are highly focused on cultivating relationships and contributing to business growth.
Some notable firsts:
Principal Asset Management Berhad2
Every employee deserves the opportunity to achieve their full potential. We offer dozens of tools and resources to help foster success, collaboration, and innovation. These are just a few:
- Community partnerships
- Cultural events and courageous conversations
- Domestic partner benefits
- Employee resource/affinity groups
- Flexible work schedules
- Formal development programs
- Ideation assistance
- Onsite childcare center
- Pay equity
- Prenatal care programs
- Supplier diversity program
Charlotte, North Carolina
Executive Inclusion Council
Our commitment to diversity and inclusion starts at the top. Dan Houston, our chairman, president and CEO, serves as sponsor of our Executive Inclusion Council. This team, comprised of cross-functional business leaders, are the guardians of our global inclusion strategy. Principal senior management and Human Resources Committee of the Board of Directors make diversity and inclusion a priority and are updated regularly on our progress.
Compensation and pay equity
We’ve built our workplace on principles of fairness and equity. We believe that all employees should have a safe and inclusive work environment—one in which everyone is treated fairly, with the high standards of professionalism and in full compliance with the law.
We provide competitive compensation for our employees around the world. Our Human Resources department uses third-party market data, obtained through our annual participation in salary surveys administered by unaffiliated consulting firms, to help ensure base salary and incentives are appropriately aligned in the markets where we compete for talent. Employees receive an annual compensation statement that explains the components of their pay and how their performance influences the awards they receive. Learn more about global pay philosophy.
We review our pay practices each year for any potential unexplained differences in pay by gender or race. To this end, Principal has internal processes, analyses and monitoring in place to assist in identifying and addressing any gaps by gender or race. We are confident that these robust processes and analyses are an important guard against any statistically significant pay gap.
In December 2020, we shared information about the launch of our global pay audit to identify differences in pay between employees doing like work. We partnered with Mercer, an expert on pay equity, to conduct the audit. While we’ve analyzed pay equity for many years, this was the first time we partnered with an outside subject matter expert on this audit, and with a global scope.
Globally, pay equity was analyzed from a gender perspective, and in the U.S., we also analyzed pay equity from the perspective of race/ethnicity. We have now completed the audit and are pleased to share the result.
The findings show Principal’s management of pay equity ranks with the best in class among financial services companies reporting pay equity data. We are committed to conducting this review annually to ensure our pay practices reflect our intent to retain a strong measure of pay equity.
In addition, an annual internal employee survey includes pay-related questions which allow employees to raise concerns and issues about their compensation. Employees also can raise concerns through an Ethics Hotline, the Principal Human Resources Department, or their leader.
Affinity groups for employees
Affinity groups connect employees based on similar interests or aspects of diversity and are key enablers for employees to feel valued, respected and included, while enabling them to perform at their peak. They foster understanding of the interests and needs of employees in their groups and provide Principal with assistance in attracting, retaining and developing a diverse workforce and an inclusive culture.
Our Connected Community includes employee resource groups (ERGs) and women’s networks. The ERGs represent areas of focus that matter both to our employees and to our customers, including gender equality, LGBTQ+ issues, racial equality, enabling all abilities, and valuing military experience. More than 4,000 employees are engaged in our ERGs and women’s networks. With global events each year, ERGs extend opportunities to increase the capabilities and connection within our employee population. Learn more about our Connected Community.
Global Brand & Experience
Des Moines, Iowa
Supplier diversity program
Principal recognizes value in doing business with diverse suppliers. Through our supplier diversity program, Principal actively supports and facilitates the purchase of products and services from diverse businesses. Our approach supports the growth and development of the communities we serve and delivers value to shareholders by tapping into the widest possible selection of suppliers, innovative solutions, and creative thinking. We strive to include diverse suppliers in all bidding opportunities and seek partners that contribute to our strategic business objectives and financial performance. You can find out more about our supplier diversity program.
We believe in giving back and strengthening the communities in which we operate.
We provide people from a variety of socioeconomic backgrounds with affordable, accessible, and user-friendly products and services. No matter where they live or where they are in life, people can depend on us to help them reach their financial goals.
And in addition to the not-for-profit Principal® Foundation3, we also promote financial security in our communities through financial education, volunteerism, grant-making, sponsorships, and other activities—often with a focus on serving global youth and disadvantaged communities through Principal® Community Relations.4
Learn more about how Principal fosters inclusion among our customers and within our communities.
1 As of December 31, 2020
2 As of May 1, 2021
3 The Principal Financial Group Foundation, Inc. (the “Principal® Foundation”) is a distinct, not for profit, undertaking separate from the Principal Financial Group, Inc. (“Principal”). The major focus of the Principal Foundation is to build financial security in the communities where Principal operates. The Principal Foundation has $200M assets under management and directs its returns to helping people learn, earn, and save. While the Principal Foundation receives funding from Principal, the Principal Foundation is an independent organization. The Principal Foundation does not practice any form of investment advisory services and is not authorized to do so.
4 Principal® Community Relations has a focus to build financial security in communities where Principal Life Insurance Company operates. Insurance products and plan administrative services provided through Principal Life Insurance Co., a member of the Principal Financial Group®, Des Moines, IA 50392.