We’ve been hearing more and more about this thing called “financial wellness” and its close relative “financial well-being” for some while now. Between them, the two terms now clock up three million results on Google – and next time I look I bet it’ll be more.
Nothing wrong with that. Insofar as both terms are to do with people’s ability to manage their personal finances well, they both describe a desirable objective.
But what I do find quite peculiar is the way that this objective has become so closely – indeed inextricably – related to the workplace. Financial wellness is a thing which you get at work. It seems to have several components, not always precisely or consistently defined, but all provided or at least orchestrated by employers: a workplace pension, possibly some other “hard” financial benefits like life cover, various additional benefits like discounts on shopping and holidays, and some kind of digital platform which offers some educational content and access to a wider array of financial services and information at the employee’s own cost.
What’s in all this for the employer, apart from a lot of cost and admin? It’s claimed that employees achieving greater financial wellness by these means will be happier, more productive and more loyal. I can’t say I’ve seen much hard evidence for any of these claims, but to be honest even if they’re true, I think I’d still struggle to understand why employers feel a responsibility for this particular part of their workforce’s lives when most feel so little responsibility these days for most others.
If we rewind to the golden age of Victorian paternalism, we can see a group of large employers – many of them with religious and often specifically Quaker convictions – pursuing a very broad concept of wellness for their workforces and their families. My wife grew up in Bournville, the suburb of Birmingham developed and largely owned by the Cadbury’s confectionery business, and she can confirm that for many years the Cadbury family really did provide wellness-creating facilities of every kind, from high-quality and low-cost housing in a pleasant environment through to healthcare, educational and all sorts of recreational facilities.
Slowly at first, and then with gathering speed, all these benefits gradually trickled away over the course of the 20th century, until in 2010 the business itself was sold to new American owners with none of the Cadburys’ paternalistic attitude.
Interestingly, it’s been at exactly the same time that the substance of employee wellness has been evaporating that the use of the term has been proliferating. Cynics (e.g. me) detect the hand of the Employee Benefits Consultant in all this, expressing predictably Mandy Rice-Daviesian levels of enthusiasm for schemes requiring more employee benefits. And we have an appropriately cynical theory that much of it’s a smokescreen designed to obscure the extent to which most employers have rowed back from those Victorian ideals in recent years.
But for most employees and indeed employers, I wonder whether this rowing-back really needed obscuring. I must say that over my long years as an employer, at two medium-sized advertising agencies, if I’m honest I never really felt any responsibility for my employees beyond what happened to them in the workplace, and I can’t say that my employees showed any signs of thinking less of the agencies as a result. I never believed that if I did take on some of their out-of-the-office responsibilities, and helped them to, say, insure their cars more cheaply, or feed their families more healthily, or take summer holidays which better suited their needs, they would reward me by working harder or staying with the firm for longer. I could certainly reward and motivate them by the traditional means of pay, promotion and recognition – and, more generally, by providing a pleasant, safe, fair and stimulating working environment. But not being a Victorian, and running young companies without histories of providing sports fields for the Works football team and Sunday Schools for staff’s children, it never occurred to me that my responsibilities went any further.
I suppose it’s possible that my employees were disappointed about this, but they never showed any sign of it. No employees ever came to tell me they were leaving because they’d found another agency that offered them a discount on goods from Sports Direct. And to take a more serious example, when we offered a then-fashionable “cafeteria” system which allowed employees to choose any combination of benefits they liked by sacrificing the appropriate proportion of salary, I don’t remember anyone ever choosing to sacrifice any salary at all for anything except – in a few cases – interest-free season ticket loans.
Since then, a lot has changed and of course a lot more is arguably changing right now thanks to the coronavirus. People’s attitudes and priorities may well be different, and I think there has been at least one really important behavioural shift: app-driven providers like Monzo, primarily targeting millennials, are creating a degree of engagement in personal finance among their customers previously only seen among the nerdiest of hobbyists.
This is important, and I suspect provides an epicentre for this financial wellness thing. Financial fitness apps allow these people to work on their financial wellness in the same way that physical fitness apps allow them to work on their physical wellness.
I don’t want to underestimate this. Significant behavioural change in personal finance is very rare, and this may be just about the biggest in my working lifetime. But even so, I don’t think it explains the strength of the connection with the workplace. Of course I accept that employees’ finances have an important effect on their overall state of mind, but I don’t think they’re more important than a whole lot of other things for which most employers take only a limited amount of responsibility: employees’ and their families’ physical and mental health, their family relationships, their children’s performance at school, the trouble they’re having sleeping, their need to arrange care for their ageing parents, the fact they’re drinking a bit too much these days, their advancing male-pattern baldness, the death of a much-loved dog, the hours spent every day in traffic on the M25.
As I suggested a few paragraphs back, the best reason I can think of for employers’ continuing interest in financial wellness is some kind of lingering overhang from the era of Victorian paternalism. If that’s right, it is a very lingering overhang indeed. If it’s wrong, I’d be grateful for any other explanations.