Less a recession, more a perk-cession
Kiwi businesses are showing signs of a global trend known as the ‘Perk-cession’, cutting back on employee benefits and rethinking rewards to attract and engage employees. In a recent poll by Frog Recruitment of 503 New Zealand workers, one in four workers said their employers had cut employee benefits in the last six months, including […]
Kiwi businesses are showing signs of a global trend known as the ‘Perk-cession’, cutting back on employee benefits and rethinking rewards to attract and engage employees.
In a recent poll by Frog Recruitment of 503 New Zealand workers, one in four workers said their employers had cut employee benefits in the last six months, including removing complimentary coffee and fruit and reducing the availability of gym memberships.
The results come as no surprise to Frog Recruitment Managing Director Shannon Barlow.
“For most businesses operating in this current difficult economic environment and in the face of a looming recession, perks are on the chopping block. However, retaining talent is more critical than ever, and when salary raises are not an option, maintaining or offering individual benefits can keep people happy. Simple, shared workplace perks, which usually have a lesser monetary value, can also help people feel rewarded and create an inclusive culture.
Barlow says that not all perks are created equal.
“Employees’ needs have also evolved post-Covid and a free apple or croissant may not cut it. They’re looking for more value-based benefits such as subsidised transport or childcare costs, health insurance, flexible hours and the option of hybrid working arrangements. These are increasingly important to them as the cost-of-living increases and pressure mounts on people financially and emotionally.”
Globally, Google is a company that has become a victim of the perk-cession. The tech giant has removed several worker benefits it initially offered, including free food, spa treatments and nap pods, citing the reduction of the number of employees who opt to work in the office as the reason combined with a business downturn.
Barlow says that in many cases, the ‘feel-good’ perk phenomenon was a knee-jerk reaction in the quest to attract staff post-pandemic.
An Auckland-based clothing and homeware retailer recently ditched free coffee and fruit for its staff, leaving workers annoyed, especially those who start early in the morning or late at night, saying their employer shouldn’t be removing “basics”.
Says Barlow, “Employers should be mindful of removing common perks that they’ve already rewarded to employees. It can send a message to your workforce that they’ve underperformed, which can trickle down to decreasing morale.
“Taking away perks like coffee may not actually make much of a difference to the bottom line, but I’m willing to bet workforce lethargy and productivity will be down by mid-morning.”
Barlow recommends that managers be transparent about the need to tighten the purse strings as the country moves into rockier times ahead and ask their teams what perks or benefits they can go without.
“One of the findings from our annual work research report revealed a mismatch between what’s important to employees and what the business thinks is important to employees – asking employees how they would prioritise the company’s spend on perks will return more bang from their benefit buck.”
Barlow says employees’ priorities have evolved since the pandemic.
“Lunchtime yoga was big in 2021, but now that work is busy again, exercise during work isn’t a priority. Today’s worker is also more eco-conscious and probably doesn’t like free fruit and food being thrown out at the end of the week.
“Smart employers that strategically offer benefits focused on their employees’ genuine wellbeing and career development will see returns over the long term. These benefits directly impact their employees’ work-life balance, reduce burnout and improve retention and efficiencies.”
While New Zealanders’ living costs have skyrocketed, unemployment remains low, and Barlow warns businesses to stay competitive.
“This means keeping the vital benefits at the status quo. Removing valuable benefits can convey that the business is in trouble, and the organisation is at a higher risk of a competitor swooping in to offer your best talent the rewards they are missing in your workplace.
“In tough times, employers can’t afford to jeopardise business continuity. Rethink the perks and be conservative with pay increases, but keep your people happy and don’t U-turn on the wellbeing benefits.
“Ultimately, maintaining a productive workforce through a recession will be the real ‘benefit’ for everyone.”