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Tough Times Dont Cut the Coffee; Perks Matter

Though the tiniest perks might seem expendable during tough economic times, when they get taken away it’s ‘like throwing salt in the wound.’ Little perks make people feel like they want to go the extra mile to get the job done.

March 13, 2008
Related Topics: Benefit Design and Communication, Corporate Culture, Motivating Employees, HR & Business Administration
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Aaron Andersen still remembers the bitter day the Starbucks disappeared.

   Andersen, 30, now a budget manager at a Chicago nonprofit, recalls when the mermaid-logoed brew in the break room of his former office was switched to a random offering of whatever could be purchased cheaply in bulk or on sale.

   It was, says Andersen, "really, really bad coffee."

   A seemingly small thing, yes. But grumbling ensued as employees read the muddy coffee grounds like tea leaves and didn’t like what they saw. When the technology and environmental services company lost contracts, which led to further cutbacks, the subpar coffee came to symbolize larger problems.

   As the cuts grew to include tougher scrutiny of expense reports and stingier rules for business meals and travel, experienced people started leaving the company. "People felt undervalued," he says.

   Though the tiniest perks might seem expendable during tough economic times, when they get taken away it’s "like throwing salt in the wound," says Phil Wallner, president of Glen Ellyn, Illinois-based Provident Link Ltd., an information technology recruiting firm.

   Wallner says he sees firsthand the damage done: Disenchanted employees "are more likely to take a call from a recruiter," he says.

   "The little perks make people feel like they want to go the extra mile to get the job done," he says. "When you remove those perks and you’re asking someone to still go above and beyond, you’re setting yourself up for some turnover problems."

   As a consultant who also serves as an interim chief information officer, Mark Cummuta, 44, has witnessed various office dramas provoked by coffee.

   At one work site, the company kept staff supplied with free coffee and snacks to power them through late evenings. As money became tight, that small perk was eliminated and the team of programmers he was trying to motivate lost some fire.

   "The guys would say, ‘We’re out of coffee, and if I have to go to McDonald’s and get a cup of coffee, I’m not going to come back [tonight],’ " he says.

   Two years ago, a client in California purchased a specialty coffee maker for one of its offices. The machine used more expensive packets of coffee that was high-quality.

   "How come they get the special coffee?" was the refrain heard in other branches.

   "People started grumbling," Cummuta says. "The other branch managers got upset."

   The small extras, he learned, tend to be taken very personally.

No more free lunch
   Mike Wolson, president of Naperville, Illinois-based Chicago Recruiters, says he often hears that point from professionals who have decided to look for new jobs.

   The removal of perks can be seen as "a little kick in the face," he says. "It takes away that extra motivation to give that extra push of energy into the job."

   Wolson recalls one company that used to provide lunch for employees on Fridays. The management cut what it thought amounted to little more than a small offering of good will, but the impact was much wider.

   "I don’t think anyone left because of that, but I also don’t think the water-cooler talk was conducive to the work environment for a while," he says. "It highlighted other concerns people had."

   Indeed, when a company starts cutting back on free subway cards or catered lunches, employees sometimes see it as the tip of the iceberg and expect more bad news to come.

   "It can make them start looking around," says John Ryan, president of Chicago-based executive search firm RSMR Global Resources Inc.

   "The first reaction is, ‘We’re having financial problems. Maybe I should look for a new job,’ " Ryan says. "If a company can be transparent enough to indicate that they’re just trying to cut back costs by 5 percent, maybe they can stave off any gossip or rumors."

The perks that count
   Melissa Dessent, 39, a quality assurance business analyst, says employees at the insurance processing center where she used to work looked forward to Halloween parties, with cupcakes and costumes at the office. Then management changed and the Halloween parties evaporated.

   "I consider that happy, let’s-get-it-done-together attitude a perk," she says.

   While some may see such a shift as small, it sent a message to her. "That’s what puts people in culture shock," she says.

   Dessent says some companies "don’t seem to understand there’s more to coming to work than just going there, working for The Man."

   "It’s the little stuff they give you, like a health club on premises or flex hours or even contributing to transportation costs. Those things really show that the employer cares," she says.

   Carol Sladek, national leader of work/life consulting for Lincolnshire, Illinois-based Hewitt Associates, says employers must know their staffs to understand what sort of perks, small or large, will engender loyalty. What seems like a minor, smart decision to bosses may come at a high cost to staff morale.

   "Perhaps you take the free coffee out of coffee stations, then you find 95 percent of the population really valued it," Sladek says. "These fun little perks are near and dear to people."

   In 2006, Hewitt itself had to handle the fallout from a cutback when it started charging employees for their once-free cafeteria lunches. The perk was costly and only available in Hewitt’s North American offices, so it was deemed unfair to its other offices worldwide, says Tracy Keogh, senior vice president of human resources.

   The news wasn’t exactly welcomed by employees.

   "I’m always very careful in what I give out as a benefit because it’s very hard to take away," she says.

   HR tried to convince them that they would benefit in other financial ways from the cutback, and many have since become attached to other perks.

   When Renee Zarazinski started her new job as a paralegal at Hewitt, she excitedly told friends about it. The benefits were one thing, but the first perk she shared with friends? The office had a Starbucks, subsidized by the company, where she could get her grande decaf for $1.70. At her old job in the Loop, she’d have to shell out more than $2 for the same cup, she says.

   "I was like, ‘Oh my god, this is great,’ " says Zarazinski, 53. "It’s so much more convenient."

   Yet it’s not always obvious which small perks will lead to mutiny when they disappear and which are barely noticed.

   At the former workplace of Andersen, the nonprofit exec, employees also lost their free bottles of apple, orange and cranberry juice.

   No one seemed to care about that. But the coffee episode still rankles.

   "It wasn’t so much, ‘They’re cutting down my income by a couple cups of coffee a day,’ " he says. "It was, ‘They don’t value me as much as they say.’ "

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