The balance between keeping employees happy and saving money can be delicate. Free bags of Cheez-Its go a long way.
Author Jeff Bercovici Photography CHRIS BUCK / CORBIS OUTLINE
IN THE BEGINNING, THERE WAS COFFEE. Although his name is lost to history, it’s safe to say whoever came up with the idea of mixing caffeine and work was a bona fide management genius. Stick a pot of Maxwell House in the break room and watch as your employees come in earlier, stay later and work faster. The best part is, they think you’re doing them a favor. Cheap. Devious. Brilliant.
Somewhere, things got complicated. Casual Fridays. Company cars. Country club memberships. 401(k) matching. “Team-building” retreats in Vail or Puerto Rico. Cut to the late ’90s, when a convergence of imaginative brains and limitless venture capital in Silicon Valley gave birth to the Cult of the Perk. Hoping to lure the brightest young programmers out of M.I.T. or Stanford to come work for you? Don’t even bother unless you can offer Herman Miller Aeron chairs, courtside season tickets, on-site massage therapy, a 24-hour smoothie bar and Segways upon which to zip around your feng shui–ed campus. For starters.
How fitting, then, that it was Google, the Oprah Winfrey of employee perks, that signalled the beginning of the end. In October 2008, the internet giant announced cutbacks on a range of lifestyle-enhancing niceties, including its legendary cafeteria offerings. Earlier in the year, Google raised the price of its daycare program, reportedly causing some employees to burst into tears.
Since we all know Google is the smartest, most forward-thinking company around — it’s finally been confirmed with the publication of a new book titled What Would Google Do? — that must mean slashing perks is the prudent thing to do in this unforgiving economic environment, right? Not necessarily, says Nancy Rothbard, an associate professor of management at the University of Pennsylvania’s Wharton School.
As head counts plummet, she says, “companies need to be thinking about how to make remaining workers more productive.”
In some fields, perks are just that: extras, fringe benefits — pleasant but disposable. But in others, they really are central to employee satisfaction and motivation, says Ross Siegel, CEO of Jobulous, an online career- information resource. When you take away perks for those workers, “you’re just chopping away at the basic pieces of morale that attracted people to those industries in the first place,” he says. “You don’t become an investment banker at Goldman Sachs if there’s a chance you’re going to have to sleep in a fleabag motel when you travel for work.”
In fact, although companies in every sector are busy trimming perks, those with the best reputations are the ones doing it most cautiously. Lee Clifford, who oversees Fortune magazine’s annual “100 Best Companies to Work For” list, says the firms that rank at the top of her survey are careful not to discard too many of the frills that got them there. “If they offer something, they generally try to keep it, even in a bad year,” she says.
Still, rare is the company that can resist the pressure to cut some corners. The good news is there’s never been a better time to play the good boss. With perk inflation in check, there are plenty of simple — and low-cost — ways to keep the underlings, um, perky.
Or chips. Or M&M’s. While the days of on-site sushi chefs are probably behind us, keeping a kitchenette stocked with free snacks remains a relatively cheap way to earn employee gratitude. And there’s a bonus: It keeps people from vanishing every time they need a sugar rush. At Bloomberg L.P., a New York– based business-information provider, the munchies are part of the culture — as is the unspoken expectation that you will remain chained to your desk all day.
After money, there’s nothing people value more than time away from the office, whether that means extra vacation days or working from home. The latter is an option that more and more companies are extending to their workers, says Clifford, who’s seen the number of firms on her list that offer telecommuting quadruple over the past decade. “It’s something they can offer that doesn’t cost anything,” she says. Those employers who want to give people a break while keeping them on- site can emulate No. 23 on the Fortune list, the Nevada-based online shoe retailer Zappos.com, which provides an austere nap room for the weary. Zappos CEO Tony Hsieh “really feels that at a time like this, if employees aren’t focused, they aren’t going to do a good job at work,” says Clifford.
Even those firms that can offer only unpaid time off can spin it as a perk if they’re smart. Pearson, publisher of the Financial Times, recently gave its employees the option of “buying” extra vacation days or taking extended leave at 30 percent pay. The upshot: Pearson slimmed its payroll without looking evil. “They got to have their cake and eat it, too,” says Peter Himler, founder and principal of media consultancy Flatiron Communications.
There are two ways to put money in your workers’ pockets: Take it out of yours, or help them save their own. Wegmans, a grocery store chain that’s perennially on Fortune’s list, gave out 10 percent food discounts at holiday time last year. Outfits like Chicago-based PerkSpot match up vendors offering discounts — on everything from restaurants to cell phone providers — with companies looking to beef up benefit packages. PerkSpot CEO Chris Hill says discount programs “soften the blow on employees” when other perks have to be sacrificed.
No doubt you have a little stress to burn off; chances are your employees do too. Why not encourage them to do it on the basketball court or softball field? At Rodale, a health and fitness publisher based in Emmaus, Pennsylvania, daily group exercise is built into the schedule. David Willey, the senior vice president and editor of Runner’s World, says it’s a big part of what attracts people to work there. “At the stroke of noon, you look out your window and you see a group of cyclists going off one way and a group of runners going another,” he says. “It makes the job and life a lot more fun.”
But you don’t have to be a workout nut to enjoy a quick game break. “If you’re a startup in Silicon Alley without a foosball table or a ping-pong table in your office, it’s looked on as a little strange,” says Jobulous’s Siegel. Games like these are especially effective at energizing young workers, according to Cam Marston, author of Motivating the “What’s In It For Me?” Workforce. “Millennials get very excited about that sort of thing,” he says.
Whatever competitive energy isn’t spent running can be harnessed to benefit both company and employer. Clifford has seen a trend of more companies, from The Container Store to Children’s Healthcare of Atlanta, holding contests with incentives to spur sales or recruitment. “It’s one not terribly expensive way to get people motivated,” she says.
Even less expensive: simple recognition, whether it’s a quick email or a high five. “It’s not tickets to the playoffs, but at least the guy feels appreciated,” Siegel says.
In the end, says Marston, employers who do the best job of explaining why cuts are necessary will wind up with the happiest workers. “Perks are wonderful fringe benefits, but they’re icing on the cake,” he says. “The cake has got to be made up of challenging work and a stimulating environment.”
And it never hurts to have a little free coffee around to wash it down.
Jeff Bercovici is a writer for Condé Nast Portfolio, where he has long agitated for a nap room.