When employees need personal help, business owners respond

By Joyce M. Rosenberg
AP Business Writer

NEW YORK (AP) - When David Winters' staffers ask for financial help, advice or to borrow a company car, the answer is yes.

"We have single working mothers, single working fathers, folks with four and five children," says Winters, owner of a Screenmobile franchise in Charlotte, North Carolina. "If you don't support the team, what's the point?"

Winters has helped his 20 staffers pay for car repairs and veterinary bills and assisted them in filing income tax returns or getting child support. He gives interest-free loans - which he often forgives.

For many small business owners, being a boss means helping staffers when they struggle. Owners do it out of compassion and concern, and also to return the loyalty they get from employees. Owners realize staffers are more productive when they feel supported and aren't worrying about personal problems. And helping staffers can make a small business better able to compete for workers in a tight job market; large companies with hundreds or thousands of employees are more regimented and often won't bend the rules when employees are in need.

Winters helps his staffers, who repair window and door screens, out of kindness but he's also aware his help reduces their stress and makes it easier for them to be cheerful with customers and provide better service.

Trivinia Barber knew that one of her staffers with young children was worried about driving them in a car with worn tires. Barber spent $300 to buy new ones.

"That $300 was a drop in the bucket for me to give her peace of mind," says Barber, CEO of Priority VA. "Her fear was taking away from her performance at work."

Barber, based in Savannah, Georgia, but with five employees and dozens of freelancers who work remotely, knows the structure of her company can create feelings of isolation, another reason to be responsive to staffers' needs. When they've lost relatives, Barber has helped with practical matters.

Owners who are empathic and help employees can foster a great deal of goodwill, but they should think about any problems their assistance might cause, says Rick Gibbs, a consultant with human resources provider Insperity. For example, if a boss is very selective about who gets help with financial problems.

"It may feel good in the short term but it could create issues with other employees who become aware of those gifts," Gibbs says.

Bosses also need to be sure they'll get their money back - some employees have gotten loans and left before repaying them, Gibbs says.

At Foresite Commercial Real Estate, owners Bethany Babcock and Chad Knibbe have been generous with time off when staffers are ill, even one who needed major surgery right after joining the San Antonio-based company. They've helped pay moving expenses for a staffer with domestic problems, and bought a plane ticket for an employee who wanted to visit a nephew on life support. The rest of the staff has also pitched in, for example, with donations of frequent flyer points

But Babcock and Knibbe have learned some staffers might try to take advantage of them. They've had new employees who "seemed to develop an expectation that the company was there to solve and prevent any and all personal financial challenges," Babcock says.

She and Knibbe have learned not to offer extraordinary help until they become familiar with a staffer. But, Babcock says, "I would rather get burned 10 times than miss the one time that might have been legitimate that impacts someone's life."

Some companies help staffers out of a business need. Reboot Online, a digital marketing company based north of London, helps staffers who emigrate from countries like Romania, Russia and Slovakia. The company recruits outside Britain because it struggles to find staffers with skills it needs. The newly arrived workers need help getting settled.

"They often don't have the credit rating to rent a house, buy a car," Managing Director Naomi Aharony says. "So financial guarantees and personal references from us as U.K. company directors are needed."

But the company's efforts don't guarantee employees will stay.

"In the past we have leased cars and acted as guarantors for employees and have been left to foot the bills when the employee decides to go back home after six months," Aharony says.

For Dr. Kenneth Rothaus, giving advice when staffers ask is the right thing to do. Giving advice on health is natural for the Manhattan plastic surgeon, but employees also seek Rothaus' wisdom about apartments and cars. He'll listen to personal problems, but doesn't offer suggestions unless the staffer specifically asks.

"There are certain boundaries you shouldn't cross," he says.

Danielle Roberts and her husband and business partner, David Kunkle, have helped staffers struggling with some of the worst things that can happen - in one case, supporting and listening to a mother whose son committed suicide.

"When it was clear she was struggling to cope I helped her research support groups for grieving parents of children who committed suicide," says Roberts, whose insurance agency, Boomer Benefits, is based in Fort Worth, Texas.

They've helped in smaller ways, advancing money so a staffer could go to an urgent care clinic, and paying for a car service for another whose car had a flat tire.

"All employees were appreciative but the outcome or the gratitude is irrelevant. We have sometimes just done what felt right as human beings and we never regret it," Roberts says.

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Lending money to staffers can cause problems for employers

By Joyce M. Rosenberg
AP Business Writer

NEW YORK (AP) - Many small business owners lend money to staffers who are short of cash before payday or who have unexpected expenses or crises. The risk bosses face is not getting paid back.

Marcelo Melamed made several loans to a staffer who said he needed cash for things like fixing his car. Then one day, the staffer disappeared and left behind a debt of nearly $800. Helping staffers is important to Melamed, owner of Stor Furniture in Old Bridge, N.J., but, he says the experience taught him, "you have to be careful."

There can be other issues that arise from lending money to employees. Owners may be willing to lend to employees to help with big purchases like new cars, but not for a vacation, angering some staffers. And unless they stipulate how they expect to be repaid, owners may find themselves waiting and wondering about the staffer's intent and plans.

Many owners deduct money from staffers' paychecks until the loans are fully paid off, eliminating the uncertainty as long as the employee stays with the company.

Matthew Ross, co-owner of Slumber Yard, a mattress review website and YouTube channel, and his partner Jeffrey Rizzo recently gave a long-time employee a $15,000 loan to buy a new vehicle. They've also lent another staffer $10,000 for a down payment on a condo. The loans are interest-free and payments are taken out of paychecks.

"It's a big financial risk for my business partner and me but we feel like keeping our employees happy is one of the best things we can do for the overall health of the business," says Ross, whose company is based in Reno, Nevada.

At this point, with 12 staffers, there's no formal, written process for loans at Slumber Yard. But as the company grows, it may need one, Ross says.

Owners should think about the reasons they're willing to loan money - such as hardships or essentials like cars and homes. And, what constitutes a hardship. Creating a written policy can help a company prevent complaints and resentment when one staffer gets a loan, for example, for medical expenses, but another can't get a loan for a trip to the Caribbean.

What if the staffer with a loan leaves and there's an unpaid balance? The owner could face a loss, says Rick Gibbs, a consultant with the human resources provider Insperity.

"Recovering money is difficult with most labor laws," Gibbs says.

Some owners might want to help their staffers but are reluctant to lend them money. An alternative is to help them find financial resources, Gibbs says. He noted that some Employee Assistance Programs include services to counsel staffers who are short of cash or struggling with unpaid bills.

Published: Tue, Aug 13, 2019

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