Employers have a responsibility for the well-being of their staff. Well-being is associated with a person’s physical, social and economic circumstances. But it is also influenced by mental attitude, how people feel, and how they view their life as a whole. In a commercial context, well-being is associated with a high level of life satisfaction, good mental health and an ability to manage stress. From an employer’s perspective, work-related stress, anxiety and depression can increase sickness absences and staff turnover rates. Conversely, a positive and motivated workforce contributes to business performance.

Many employers understand that, for legal, ethical and commercial reasons, they should do what they can to continue to support well-being among staff, and avoid measures that inadvertently make it worse. Prior to COVID-19, employee well-being was rising up the corporate agenda and many employers were increasingly taking steps to promote it.

However, while the general concept of employee well-being is widely understood, the detail is less easily defined. What are the ingredients that make up an individual’s sense of well-being and what is changing due to the COVID-19 pandemic?

Work-life balance

Well before lockdown measures were introduced, the dividing line between home life and working was becoming increasingly blurred. Smartphones and the internet were making it easy for individuals to carry on working after the end of the office day, or to stay in touch with what is happening at work while sitting around a pool on holiday. People can also be contacted at any time by bosses or colleagues. When individuals are working at home for an extended period, the office embeds itself deeper into the home, and the work-life balance shifts.

Most people in financial services have worked from home during lockdown, so the current pandemic is the first time that a large proportion of employees are working from home at one time, for an extended period. Subsequently it’s the first time employers have seen what impact this has on work life balance and employee wellbeing. Home working creates more time for working, by removing the need to spend time travelling to and from work. This creates a risk of working longer hours, having less interaction with colleagues and lacking the ability to switch off from work. These may outweigh the beneficial effects on well-being of having more free time and greater flexibility and, on balance, could potentially have harmful effects on well-being.

WFH and perceptions of well-being during the lockdown

However, our survey data suggests grounds for cautious optimism. Prior to lockdown, around 81 per cent of respondents considered their personal well-being to be either good or very good. Given that financial services can be demanding for employees, that hours are often long, and pay and prospects vulnerable to financial market volatility, we regard this as encouragingly high.

Figure 1. Perceptions of well-being before lockdown

What’s more, on the whole, employee well-being among FS employees has improved with WFH. 36 per cent say that their well-being has improved during lockdown, which is 13 percentage points higher than the share who said that their well-being had deteriorated.

Figure 2.  Impact of WFH in lockdown on well-being

One respondent to our survey commented on the positive benefits of WFH in reducing workplace stress: “Because I'm not commuting it’s given me more down time back… and with no people around, my anxiety is fully under control and I'm better able to cope with work pressures.”

The downside is that, although perceptions of well-being have improved for over one-third of respondents, nearly one-quarter (24 per cent) think the opposite. A recent report by the Chartered Institute of Personnel and Development (CIPD) predicts that lockdown will have a significant ongoing impact on the mental health of employees. Employers need to consider what is dragging down well-being and what countermeasures are available.

Reasons for a negative WFH experience

Only ten per cent of survey respondents rated their WFH experience as negative. However, the most frequently cited reasons for this stand out.

Figure 3. Top reasons for a negative WFH experience

Survey respondents cited loss of personal interaction with colleagues and other stakeholders more frequently than any other reason for a negative WFH experience (51 per cent). Maintaining work-life balance came in second (41 per cent), with loneliness another prominent reason (24 per cent).

Reinventing the HR model

The good news is that employers have a range of tools and technique at their disposal to continue to support employee well-being as working patterns shift. Nonetheless, they will need to be deployed as part of broader and ongoing programmes to reinvent the HR model. Once the immediate fears about safety at work subside, employees will have a revised set of expectations of their employers; and firms will need to provide and maintain a suitable environment for WFH, and to strike a balance between WFH and office working.

The responses to our survey show that employees have differing views and experiences of WFH, and that there will not be a one-answer-fits-all solution. Work fulfils many psychological needs, as well as material objectives. The FS talent model should support work-life balance, help maintain well-being and minimise work-related stress and anxiety. It should also provide ways to connect with others, and allow for career progression and skills development. The productivity gains reported by employees WFH (see: A silver lining) suggest that the reward for reinventing the talent model is significant: the workforce is both happier and more productive.

One element in the HR framework for working from home may be the provision of well-being software to help individuals adapt to their working environment. These could, for example, remind staff to take a break or exercise, or take care with eye health. But among our survey respondents, 65 per cent indicated that they were not provided with, or did not use, well-being tools. Of these, 24 per cent said they would find them useful for improving WFH. Employers have more work to do to drive up use of such tools.

Well-being can also be addressed by using virtual hangouts (to replace ‘meetings by the water cooler’ in the office). These will be crucial, and should be carefully curated, for example only being open to small and specific groups, and with a specific purpose. Given the limitations of virtual meetings, whether formal or informal, occasional face-to-face meetings could eventually also be facilitated, public health measures allowing.

Addressing the risks of WFH

The risks of WFH must be addressed if it is to be widely-established in the long term. In addition to an erosion of employee well-being, these include elevated risks of financial crime, operational risks, and that more general conduct risk of ‘bad practices’ arising in an environment without the supervision of managers and the positive reinforcement of good behaviour from colleagues. These risks are even higher for younger and newer employees who have not imbibed the corporate culture, the unspoken rules that govern behaviour ‘when no-one is watching’.

These risks are not insubstantial. For example, the financial regulators have introduced forbearance measures during the lockdown, but these are temporary. FS firms are, therefore, likely to have to consider the relative effectiveness of regulatory compliance WFH, when deciding where people can work.

In general, respondents to the survey rated the risks from WFH as low. Among those who indicated that their experience with WFH was negative, only eight per cent gave ‘elevated levels of risk’ as one of their top reasons, and only two per cent cited ‘higher financial risk (cyber risk, fraud)’ and two per cent that it was ’harder to comply with regulations’. If individuals are, indeed, less risk-aware when working at home than they are in the office, this would clearly have to be managed before FS firms embrace home working wholesale beyond lockdown.

Culture and leadership 

There is also a challenge in maintaining a sense of community and a shared corporate culture, in a world of fewer personal interconnections. Corporate culture develops over time, but there is a risk that, with extensive WFH, it may weaken, or change in an undesirable way, so that firms lose their common sense of identity.

Leaders have an important role to play in setting the tone from the top. However, culture is about more than leadership, and permeates many aspects of corporate life. FS firms will need to continue working hard to safeguard theirs – for culture is becoming both more important and harder to control.

This blog is based on a survey of 501 employees working in financial services in London, which was undertaken by YouGov on 5 to 11 May 2020.