Woman calculating something at her desk with a laptop in the office
Finance & Law

Financial wellbeing for employees - why is it important?

Financial health is more than just a good salary. If you help your employees to better understand and plan their own money management, you are investing directly in motivation, satisfaction and loyalty. Because money worries make you ill - and unproductive. Companies that actively promote financial wellbeing create real added value for their team - and strengthen their employer brand at the same time.

Financial wellbeing for employees: Why is it important? 

The term "financial wellbeing" refers to a person's ability to meet their financial obligations, reduce debt and achieve future goals - whether in the near or distant future - financially. 

Companies can increase the financial wellbeing of their employees by paying a fair salary, offering company pension insurance, or providing access to information or webinars that offer guidance and decision-making aids on financial topics. 

"From our consultations, we know that most of the financial worries of employees are due to the fact that many do not know their financial situation exactly and therefore cannot plan well for the present - and certainly not for the future."
Manuela Sontheimer, income and budget consultant, pme Familienservice

Employers who actively look after the financial health of their workforce benefit on several levels:  

  • Employee satisfaction and loyalty can be increased
  • motivation is promoted
  • employee turnover can be reduced.

It can also have a positive impact on the company's image, which in turn makes it more attractive to new talent. Financial wellbeing is therefore a win-win situation: for companies and employees. 

Impact of financial problems on the well-being of employees

When employees struggle with financial difficulties, it often has a serious impact on their performance and well-being. A financially stressed employee may be less focused, distracted or unmotivated, which affects the quality and efficiency of their work. 

In its annual Stress in America report , the American Psychological Association (APA) has repeatedly found that financial worries are one of the biggest sources of stress for adults. In the 2015 study, 64 percent of Americans reported that money is a significant source of stress for them, especially for parents and younger adults.

7 main types of stress caused by financial difficulties 

Here are the 7 main types of stress highlighted in this study: 

1. chronic stress 

Financial worries often lead to long-term, chronic stress, as the feeling of being constantly confronted with money problems is a constant burden.  

2. fear and worry 

A common stress factor in this study was anxiety about the future, particularly about financial security. Many people worried about their retirement savings, whether they would be able to pay bills or how they would cover future expenses (such as medical costs or debt). 

This fear of the future leads to constant worry and a feeling of helplessness, as financial problems are perceived as difficult to solve.

3. sleep disorders 

One of the most common physical stress symptoms associated with financial worries is sleep disturbance. 44 percent of adults in the study said that stress due to financial worries keeps them awake at night. Lack of sleep increases stress and can lead to a variety of health problems, including poor concentration, anxiety and depression

4. stress due to job insecurity 

Younger adults and parents in particular reported job stress related to uncertainty about their job or source of income. The pressure to remain financially stable and earn a living can lead to job burnout, which manifests itself in fatigue, frustration and a drop in performance

5. physical health 

Physical symptoms are also an important stress factor. The physical effects of financial stress include headaches, stomach problems, high blood pressure and increased risk of cardiovascular disease. These physical symptoms are both a consequence of stress and an additional health factor that can further exacerbate financial stress. 

6. relationship stress 

Financial worries often put a strain on interpersonal relationships, especially partnerships. The study shows that many people experience financial burdens as relationship stress, as money problems can lead to conflicts and put a strain on emotional closeness and communication between partners. 

7. depression and anxiety 

Persistent financial stress contributes to the development of depression and anxiety disorders. The study points out that many people struggling with financial worries feel a loss of control over their financial situation, which increases feelings of helplessness and increases the risk of depressive episodes. 

How can employers support employees with financial difficulties?

If, for example, you as an employer learn of an employee's financial burden through a wage garnishment, you should take this as an opportunity to actively offer support - or at least provide confidential information on who the person concerned can turn to. The earlier you provide support, the easier it is to avert negative consequences.

Getting out of debt is often challenging, but not hopeless. There are various approaches - such as drawing up a budget, negotiating with creditors, debt restructuring or, as a final step, personal insolvency. Professional debt counseling as part of EAP employee counseling, for example, offers valuable support and guidance.

 

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On behalf of more than 1,400 employers, the pme Familienservice Group supports employees in achieving a successful work-life balance and being able to work with a clear head. 

We support working people in crises, e.g. financial difficulties, conflicts at work, addiction or partnership problems or when it comes to care and childcare.

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zero CEO Alexa Ahmad on love

to see is CEO Alexa Ahmad
Leadership & HR

"You have to love your team members" 

"You have to love your team members. Some make it easy for you, and others make it harder," says Alexa Ahmad, CEO of pme Familienservice. She focuses on personal closeness and connection as the key to corporate success and firmly believes that interpersonal relationships within the team are crucial to resolving conflicts constructively, creating a harmonious working environment and being successful in business. 

"It is part of our leadership obligation to learn to love people who make it harder for us"

You attach great importance to personal closeness and solidarity within the company. Why do you pursue this philosophy?  

Alexa Ahmad: There are three reasons for this. One is that I have a heart for our team members and I feel like an employee and team member myself. The second is a socio-political responsibility that each of us bears and also as a company. Thirdly, the business context: I had a case where a team member in my management circle was politically completely at odds with the others, and that led to extreme entanglements. People who were really very reflective could no longer separate the two.

But if we completely reject someone as a person, it is not possible for many people to work together cooperatively. This has an extreme impact on business. Rejection often turns into avoidance or other friction - which almost inevitably leads to poorer results in all areas. It's dangerous when team members don't get along with each other. I say to my team members: "You can go at me if you like, but agree with each other".  

How do you define love and connection in the context of the company?

For me, this means that I have a positive image of team members, customers, partner organizations and suppliers. I say to my managers: "You have to love your team members. Some make it easy for you, others make it harder".

It is part of our leadership obligation to learn to love people who make it difficult for us. This applies to all people with whom we are allowed to work in a professional context.

One example: We had a lot of irritation and trouble with a client company. My colleague didn't want to have anything more to do with our contact person. It was a long-standing contact person of mine. She felt that I 'loved' her - meaning that I understood her situation, her needs and her actions , even if they were contrary to our interests. As a result, we were able to negotiate benevolently together again and find new solutions to the problems, taking into account our very different interests.  

When we make a serious effort to understand why someone ticks one way or another, people sense this. It's about finding a way to meet each other. An attitude that is benevolent and open to new agreements and solutions - that's what I mean by 'love'.  

How do you promote a culture in which your team members support and value each other?  

I do not consider myself to be a good manager and I am constantly trying to improve. I encourage my team members to be open about their interests and to have an open exchange of ideas. It's not unusual for people to come to me and get really upset about another team member. Then I ask: Have you spoken to the person and explained why this is annoying you? In 80 percent of cases, they say: No!  

Any conversation with a critical trigger can fail, no matter how well prepared I am. That is then a conflict. However, over 80 percent of the people I "send back" come to a positive conclusion with their counterpart. And if that doesn't work out, I'm there to support them. If I can't fix it either, we use our team members who are specially trained in conflict resolution.  

"My managers have 'bite inhibitions' on my farm "

In your private life, you live on a farm with lots of animals in the Vogelsberg. What role do the meetings you invite your management team to play there? 

At first, I only introduced these meetings out of desperation. My schedule was tight - I couldn't travel, so they came to me. Now I deliberately hold these meetings on my small self-catering farm. I guess it's because of the rural setting, where there are far fewer heated arguments than in the usual meeting rooms.  

My managers there have "biting inhibitions" (laughs). They behave completely differently in the Vogelsberg than in the office context. It's more harmonious, they and we are more willing to compromise and are more benevolent towards each other.  

What role do celebrations play in team spirit?

A realization from many decades as a manager: I only want us to hire people who are willing to celebrate with us. I now warn my managers: "If you hire someone who refuses to do this on principle, you're asking for trouble". A maximum of four events per year, e.g. team building, sports events, Christmas party, summer party, smaller team events.  

I have found that people who don't want to show up there have a high potential for conflict all year round. potential for conflict in their teams throughout the year. By not taking part, they quickly find themselves in an outsider position, the extent of which they cannot assess. You can't generalize, but that's usually the case.

That doesn't mean that we don't take into consideration if someone has social phobia or is totally stressed out for a year because they have taken on the care of their parents. That's a different matter.  

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What do you think about forming networks in companies, e.g. for singles who are looking for a partner?

That's a trick question because you know that I've been dreaming of a company-supported singles platform for years. Women, and in some cases men, often take high risks to meet potential partners.  

There are so many platforms where we can meet people - for hiking or sports - that are all very anonymous and unsafe. We have been placing au pairs, elderly care and babysitters for decades. Seekers have to register with their company address and can always be assigned to an organization. If necessary, anonymity can be revealed, which is a huge protection.  

We need to get the topics of dating and loneliness out of the dirty corner and offer a safe platform. Employers have an interest in their employees maintaining good, stabilizing relationships, romantic relationships, friendships and professional networks.  

"Loneliness is a major issue for employees"

So should HR focus on relationships, love and sexuality?

Of course, we don't want to question or even analyze the sex lives of our team members. But we need to understand that it's not just the threat of burnout, a sick child or a relative in need of care that puts a strain on our team members. Increasingly, it is loneliness or an unfulfilled desire to have children. This places a heavy burden on people and leads to intense life crises that slowly creep up on them.  

Statistically speaking, loneliness affects precisely those we are currently recruiting, namely young people under 30. 18 to 25-year-olds suffer the worst from loneliness, which shocked me. They are just leaving home, becoming self-employed and then come home to an empty apartment in the evening. This is exactly where our platform would come in. 

Apart from such a platform, which does not yet exist, companies can already set up networks for target groups today. This is nothing new! Company sports groups have been around for over 100 years and groups for single parents or women's networks for decades.  

The challenge is to sense which group offers would be used. For example, there are unfortunately very few e-sports groups*, cooking groups are still very popular, or what about a group for office dog owners?

The basis for everything is that the company - and as its representatives, the managers - do not see it as a danger if their team members meet outside of working hours. That they recognize the great positive effect of team members getting to know each other better and networking.

*An e-sports group is a digital sports club: People train together, develop tactics and compete against other teams online in video game competitions - sometimes even in tournaments with real prizes and live broadcasts. Team spirit, technique and tactics take center stage - the thrill replaces the physical sweat.

Lost in Space: The pme Survival Guide for uncertain times

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