South Africa embraces corporate nanny trend – Adrian Wooldridge

Adrian Wooldridge discusses the resurgence of what he terms “nanny companies” in today’s corporate landscape, where corporations increasingly take on roles akin to a caretaker, providing various benefits and social support for their employees. This concept, reminiscent of historical company paternalism, has evolved to address modern concerns like health, wellness, and even housing for their staff. The shift towards corporate nannying is seen as a response to the deficiencies or retreat of the state in providing certain services. While acknowledging potential issues such as societal divisions and corporate overreach, Wooldridge largely applauds this trend, emphasising the voluntary nature of employee engagement and the positive impact these corporate actions can have on societal problems like obesity or housing shortages. Ultimately, Wooldridge underscores the adaptability of individuals to choose alternative employment if they disagree with a company’s approach, while acknowledging the beneficial impact of corporate intervention in addressing pressing social issues.

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The Unstoppable Rise of the Nanny Company: Adrian Wooldridge

By Adrian Wooldridge

The phrase “the nanny state” was coined in 1965 by Ian Macleod, a Tory MP who was furious about the Labour government’s decision to introduce a 70 miles per hour speed limit. Surely true-born Englishmen had a right to condemn themselves and others to a horrific death by driving as fast as they could?

These days the nanny is just as likely to be the company as the state. And, for the most part, the nannying makes sense for everyone concerned, employer, employee and society at large. It is time not only to note but to celebrate the rise of the nanny company.

Nanny companies have a long history. In the early 20th century, US Steel spent $10 million a year on employee welfare programs — “to disarm the prejudice against trusts,” as the chairman of the board informed his colleagues. Milton Hershey built a town to service his chocolate factory in the middle of Pennsylvania where, he pledged, there would be “no poverty, no nuisances, no evil.” Henry Ford sent inspectors to visit his US workers to check for whiskey bottles and communist tracts. He went further in his factory town in Brazil, Fordlandia, putting the meat-loving residents on a vegetarian diet of oatmeal, canned peaches, and rice, and, still worse, obliging them to participate in group dances.

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But corporate nannying faded with the entrepreneurial revolution of the last 20 years of the 20th century, as companies abandoned their broader social obligations to focus on their core businesses. Lifetime employment faded. Company towns all but disappeared. The one big exception to this rule was that most US companies continued to provide health care for their workers. But this was an American peculiarity — and one that companies deeply resented — rather than a blueprint for the future.

The corporate nanny is back. Companies routinely offer their employees benefits such as free food, gym membership and flu and Covid jabs. Health-care benefits have spread from the US to Europe. Worried about the discontent revealed by the “great resignation” during the Covid crisis, companies are increasingly broadening the definition of well-being to include mental as well as physical health.

Corporate nannies are doing what nannies always do — using a spoonful of sugar (or sugar substitute) to make the medicine go down. Corporate health-care providers such as Vitality give employees incentives to exercise or lose weight. Employers provide their employees with healthy snacks — not too much salt or fat — in order to prevent them from gorging themselves into obesity. Some have rechristened their canteens “nutrition centers” to rub the point home. Buffer, a social-media marketing company, provides its employees with an annual “unsick day” off that must be dedicated to preventative care.

Group exercises, long common in Asian companies, are spreading to the West, on the grounds that they encourage group bonding as well as better health. In Japan, Daiichi Life, a life-insurance company with close to 60,000 employees, sets targets for reducing obesity among its staff. Department heads are sent annual data on the health of their staff showing how they rank against other departments.

Even company towns are making a comeback. The tech titans are preparing to do what the candy and mining titans of yesteryear did and provide their employees with housing and entertainment near the office. Meta Platforms is planning to build a 59-acre campus near its Menlo Park headquarters (the company earlier offered a five-figure bonus to employees who move near the office). Google pledged in 2019 to build thousands of homes near its Mountain View headquarters, both for its workers and to ease a regional housing crisis.  (Wags have dubbed the first development “Zucktown” after Meta’s CEO and the second “Alphabet City” after Google’s parent company.) Elon Musk also has plans to build a more modest town, Snailbrook, near Austin, Texas.

There are straightforward reasons for the return of nannying. Companies are locked in competition for talent. So, they add benefits to salaries to recruit and retain potential employees. Sickness or slacking is expensive. So, companies use those benefits to produce optimal performance — from snacks that sustain but do not harm to health benefits that keep the body fit and the mind sharp. Silicon Valley companies provide wrap-around services — free meals, concierge services, on-site-laundry, haircuts, commuter buses with Wi-Fi — so that their employees can spend more time working. This is all part of what Henry Mills, a Unitarian minister who serviced a 19th century company town, called “the sagacity of self-interest.”

There is also a more subtle reason: Companies tend to go in for nannying to make up for the deficiencies of the state. In the 19th century, the likes of Joseph Rowntree and William Lever provided their employees with welfare because the welfare state did not then exist. Mining companies had no choice but to construct company towns because they frequently operated in the middle of nowhere. Today’s companies are once more expanding their role either because the state is retreating or because it is becoming more dysfunctional.

The most extreme example is South Africa, where companies are providing schools, clinics, electricity, water, road repairs and fire engines to compensate for the disintegration of the state. European companies have taken to providing health benefits because the state can no longer be relied on to provide them in a timely manner. Silicon Valley companies have been driven to address housing problems because the Californian state is utterly dysfunctional, opposing new construction on all sorts of environmental and social grounds, despite the prohibitive cost of housing, or failing to keep public order in the region’s premier city, San Francisco.

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The rise of the corporate nanny certainly raises some troublesome questions. What about people who do not work for corporations? Society risks becoming increasingly divided between corporate employees swaddled in benefits and outsiders who must make do with an increasingly threadbare state. The more benefits are privatized, the more the winners will be inclined to vote for lower taxes.

And what about the problem of overreach? Though he was undoubtedly a great philanthropist, establishing a successful boarding school for low-income children and orphans, Milton Hershey went too far in employing private investigators to record signs of alcohol abuse or extramarital affairs among the residents of his eponymous town. Today’s human resources bureaucracy increasingly demands fealty to progressive nostrums about diversity and sexual mores. Some wellness programs encourage a “positive attitude” among employees in the name of mental wellness. You can have too much of a good thing.

Yet on the whole, the nanny company is to be applauded. It not only overcomes the major libertarian objection to the nanny state — that of compulsion — because employees are free to go elsewhere. One study found that 69% of employees are more likely to choose one job over another if it offered better benefits and 75% are more likely to stay in their job if they like the benefit package.

Corporate activism harnesses the power of companies to address social problems. Purists might argue that business should stick to business and leave democratically elected politicians to address social problems. But purist arguments seem out of touch when the state is so obviously overburdened and incompetent. Corporate health programs lighten the burden on the state while corporations can use their size and resources to break down governments’ resistance to building anything. Both Google and Facebook are planning to incorporate social housing in their new company towns.

Purists might also argue that it is no business of the corporation to address, say, obesity. But given the scale of the obesity problem, particularly in the US and the UK, and the strength of the forces tempting us to stuff our faces, surely society needs as many people as possible, whether they work for the government or the corporation, strengthening our wills.

In general, corporate nannies are doing the right thing, using their corporate muscles to address pressing problems and nudging their employees to behave more sensibly. They may give in to the temptation to go too far and force us to do unacceptable things like group dancing or collective exercise — but if they do, we can always resign and work for someone else.

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