20 June 2023
The current situation seems almost absurd: German financial institutions are competing with each other by offering attractive savings interest rates of up to 3.35% on daily deposits. Unfortunately, a large portion of the German population cannot benefit from these offers because they simply have no money left to save. As a result, a significant number of consumers and employees are under financial stress.
According to a recent survey by Creditreform Boniversum, more than 20% of consumers experience "financial stress," which means their expenses exceed their income. This alarming trend is supported by the numbers: 14.1 million Germans can no longer afford to set money aside, which is five million more compared to just two years ago.
The effects of inflation continue to be evident. Almost two-thirds of the participants in the Creditreform survey stated that they might no longer be able to pay their current or future bills, or they are already facing reminders. Additionally, 50% of the respondents fear that they will not be able to fulfill certain financial obligations in their households fully over the next twelve months. The worry about necessary purchases for their homes is particularly concerning for 51% of the participants.
The surveyed consumers reflect this outlook, with 55% expecting to have to limit their quality of life. For many, this means giving up restaurant visits and vacation planning, but for some, it goes even further, with payment difficulties and the risk of falling into debt.
The energy price crisis not only has financial implications for consumers but also consequences for the entire economic sector, employers, and their employees. After all, consumers are also employees, and the impact of financial pressure is enormous.
Financial stress leads to increased pressure and distraction at work. Employees' concentration decreases, and their ability to focus on their tasks is impaired. Employees suffer from financial stress, leading to dissatisfaction and demotivation. This results in a negative work environment and reduced employee retention.
Financial stress can also lead to increased absenteeism and higher turnover rates. Employees experiencing financial stress are more likely to seek alternative employment opportunities to improve their financial situation.
It is important to recognize this issue and find potential solutions to alleviate the burden on employees and ensure financial stability.
We have developed paygood, an app that makes it easy to overcome financial gaps. Employees can securely and discreetly request a portion of their earned salary or wage at any time through the app. The disbursed amount will then be automatically deducted from their next payroll. Such "Earned Wage Access (EWA)" offerings are already available in many countries within and outside of Europe. Additionally, paygood provides information on financial stability and supports employees in budgeting and financial planning. This way, we help improve the financial stability of employees and employers.
HR Improvement GmbH is an innovative HR tech company founded by experienced HR experts in early 2023. Its goal is to help companies make their HR departments more effective and promote the financial stability of their employees. To achieve this, HR Improvement has developed paygood, the first "Earned Wage Access (EWA)" app for the German-speaking market. This novel service solution contributes to the financial well-being of all employees and generates social value. With paygood, employees have access to a portion of their earned salary or wage at any time, reducing financial and mental burdens. HR Improvement helps employees reduce financial and mental stress and increase well-being and commitment.
For more information about paygood and HR Improvement, visit https://paygood.app and https://hr-improvement.de.
The Creditreform Boniversum study can be found here.
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