The Free Coffee Test, or Lefkowitz’s Law of Corporate Financial Health (2013)
jasonlefkowitz.net
jasonlefkowitz.net
On the other hand, in industries like investing and law firms, snack perks are reduced to bascially soda, coffee and maybe a banana (and furniture is rather of practical appearance). And those I have seen from the inside tendend to be financially very healthy.
A friend of mine explains this with the pay gap: As a designer he has a much smaller salary than his lawyer and investment friends, so his agency invests in these small (and comparably cheap perks) to keep him happy anyway, despite the pay being only okayish. This logic doesn't apply to people with six-digit salaries.
So I think the variety of snacks often has little to do with financial health, more with practice. Though I agree with the author, than any changes in it (like cutting perks) propably do correlate with financial health.
Who is paying for snacks? Eventually, the clients (or the vc, who is hoping the clients will eventually pay for them).
1. Legal IT: Keurig machine and lots of free K-cups
2. Health insurer: free coffee, but only two communal pots in the morning which get stale and burnt later on.
3. Federal gov contractor: Keurig machine but you had to buy your own k-cups.
4. Hospital: Keurig machine but no free K-cups, but then they added a fancy coffee vending machine that grinds coffee for less than a dollar a serving.
I haven't worked anywhere where the snacks are free, although a few of them have had vending machines.
The desperate ineffectual cut hierarchy seems to go: free breakfast, then the free drinks/snacks, then coffee, then people.
Goldman Sachs was the funniest, they made the coffee cups 2 inches shorter to save money during a bad year.
Anndddd thenn the oil price dropped and a crappy drip machine was installed, and 80% of the staff was laid off.
The ideas I've read in this thread ring true!
Everybody left their desks at 12:45 to stand in the queue, waiting for their coffee worth a few seconds of their time. At 2:15 everybody finished their coffee and went back to their chair.
I can't help but think management paid more in wasted salaries in these 1.5h than if they'd just made caffeine freely available all the time.
https://steveblank.com/2009/12/21/the-elves-leave-middle-ear...
It's different if you're just processing though, there is no creativity required to check a pile of 500 invoices; you just need to get on and plough though.
But ‘just processing’ jobs also need breaks, especially if accuracy is required, even more especially if the job is safety critical. If you are doing something boring AND dangerous then you have an accident waiting to happen
In many areas leaving the office for just about anything means taking the elevator downstairs, walking through a sprawling parking lot, making a 10 minute drive to the nearest Starbucks, spending 5 minutes in the drive thru, and then reversing the whole process. I could probably justify that once a day, but upwards of 30 minutes per trip is going to be a really hard sell any more than that.
Even as a freelancer who has no one looking over my shoulder and who works from home I'm simply not going to do that - I bought a coffee maker. Take that to the far opposite extreme and consider the call center employees who have hard stats for their productivity every day and have scheduled breaks... there's simply no way they _could_ do it, even if they wanted to.
So yeah, maybe it's an indicator for _some jobs_ of a poor work quality, but that was the entire point - it's a cheap and easy way to improve that work quality.
The reason is to get people talking to each other across projects. The drop in productivity from going out for a coffee is more than offset by the benefits of cross-fertilization.
> The financial health of a company can be inferred from the quality, variety and cost to the employee of the snacks and beverages it offers its employees.
It’s a fun thought experiment, but so obviously flawed. Plenty of failed companies offer these perks, plenty of successful companies don’t. Obviously companies going down-hill will reduce non-essential items to make payroll, and obviously companies on the decline are more likely to fail than others.
There is no insight in this article.
If the snack and beverage options are better and more varied than they were on your last visit, you know that your client’s management is feeling bullish. If they’re the same, you know that the status quo is still in place.
And if they have gotten noticeably worse? Consider yourself notified that you may very well in the near future have to push hard to keep your services or products from being axed too.
Another notion of that is that when companies want to downsize (I have seen this multiple times(e.g. they need to relocate and they want to get rid of the current pool and get a new one in the new/cheaper location), they can/may/are using this tactic do make people "unhappy" with the current environment, make the experience/enjoyment poorer (no more drinks/pizzas on fridays). For this purpose (reduce headcount even while in profit) some anticipated actions are to shrink bonuses/raises, but removing someone's joyful moments definitely helps.
The lesson I've learned through this, is that from the company POV, money spent in perks is worth more than money spent in salary, i.e. employees implicitly would rather have 300$ of free lunches paid by the company every month than +300$ on their salary.
It is in the interest of the company to provide good perks, as the overall perceived employee benefits will be higher than the equivalent in 100% salary.
I agree that companies sometimes spend money on questionable so-called "benefits" (e.g. company-paid bowling party or motivational speakers) -- that employees would rather have as extra cash in their pocket.
That said, I think company-paid lunch is an advantageous financial deal for employees since it's not taxed as income[0][1] and employees have to eat anyway.
I also hate having to get into a 150-degree hot car in the summer or fight freezing snow in the winter just to go buy a lunch. The alternative of bringing my own brown-bag lunch also has hassles because of the extra prep & planning at home. Sure, an on-site catered lunch benefits the employer -- but it also benefits the employees. It's a win-win.
[0] https://www.bizjournals.com/sanjose/news/2015/08/14/exclusiv...
[1] daily free meals may be a gray-area tax loophole (it's not "occasional") but IRS isn't enforcing a strict interpretation of the law: https://www.irs.gov/government-entities/federal-state-local-...
In their infinite wisdom, the government decided to control the system a little too much, so most companies no longer use them. Even in the good times I didn't like the tickets at all. It was difficult to cash them if you couldn't use them (when we were deployed at customers' premises or sick, we organized diners to "laundry" the tickets) and they forced me to eat too much: I can't eat two courses + dessert in the usual restaurants every day without going overweight very quickly. Give me the money instead! Or a parking spot, or a ping pong table.
I know I would. It'd take the burden of thinking about what to have for lunch every day off me. When I was working in an office I'd either bring my own lunch (most of the time), decide to order (which usually required to join a group ordering from some place, or create and manage a pool), or to go out - again, where, what time, and with whom? Each of those options was a waste of time, energy and context.
The way the two metaphors combine into an oxymoron gave me a smile.
Are free snacks a usual perk in USA companies? Where I'm at I've never seen a company offer free snacks, it's always snacks at bulk prices paid for on the honour system. Water and coffee are free, sometimes even tea.
Once at a place I worked at, some entrepreneurial employees started a very profitable guerrilla snack selling business, but eventually management got wind and shut them down.
It is a change in the status quo that really means you are in trouble. Having been at companies that were in trouble and eventually shutdown and even being part of the decision making process in one of those, it is all cost saving in order to keep the lights on one more month, week, or day.
It always struck me as odd because the snacks probably cost them next to nothing. I think someone thought the optics of keeping snacks while people laying people off was bad.
If anything they did worse then get rid of them, they actually replaced them with a overpriced vending machine.
Companies like Grubhub also offer corporate accounts where employers can give their employees money to spend on food.
The premise of the article is to find leading indicators of health.
Snacks and other small perks are trivially gamed. There is a decent argument that companies that spend money on frivolous benefits to project an image of strength have something to hide. Often the frugal, conservative companies that count the pennies lead to more stability and long-term strength.
For a company of 50~ employees we spend over $2,000 a month in coffee/soda/water alone. The issue is that people drink a lot of espresso so we have to buy pods and no one likes drip coffee so we also have a keurig on the side.
So yeah, the amount of money saved is pretty negligible.
https://www.google.com/amp/s/splinternews.com/thoughts-and-p...
At a startup, we always had free lunches every day (virtually anything you want) despite up and downs in the business.
It's the changes of perks, that predicts managements stance on future prospects.
Amazon didn't change perks, so at best Lefkowitz’s Law predicts management is not bullish, not that management are fearing for the future and nothing about the state of the company [1]
Similarly, nobody starts a startup without being bullish about the companys prospects. Thus the law predicts start-ups often have good perks.
[1] or at least, the law is always 1 step removed from predicting the state of the business. E.g., if management have a bleak outlook, it is probably because things are indeed bleak.