Why Free Food and Cheap Gifts Won’t Keep Your Talent

A few things to consider before offering your employees free lunch, cute toys, and other low cost items.

free food

You should understand that offering free lunches or small gifts to your employees has its limits. These perks alone won’t significantly improve employee satisfaction.

For example, if all you do is hand out free bagels on Fridays, your employees will quickly stop feeling the benefit of such freebies. The issue arises because these freebies are given without a specific purpose or rationale. Everyone gets it, everyone is equally rewarded, and no one is excluded. This is great for building a sense of teamwork, but less helpful for reminding the best and brightest of why they came to work with you in the first place.

Before you buy the next goofy toy to decorate someone’s desk for the upcoming holiday, think about what makes perks really work in the office.

Know your employees

The perks that people respond to are deeply individual. Not every employee will be motivated by the same rewards, such as face time with the boss. Some people would find that deeply intimidating; their perfect perk would be an understanding and flexible schedule that meets their needs, so long as the work gets done.

The first step to offering perks that count is making sure you’re offering the right perks to the right people. Employee engagement is not just about making your team happy. It’s also about aligning them with the company’s objectives and providing a roadmap for their professional growth. It’s unlikely that a single perk will be useful to everyone in the office. That’s okay, as long as there is a perk for everyone.

Conducting employee surveys and one-on-one interviews

You’ve likely heard the advice to “understand your employees,” but how do you truly delve into their minds? The solution is easier than it appears: specialized employee surveys and in-depth one-on-one interviews. These are not your average questionnaires; they’re expertly crafted instruments designed to uncover individual desires and driving forces.

Think about the potential impact: knowing Sarah in accounting would thrive with a flexible schedule, while Tom in marketing is eager for guidance from an experienced leader. This is actionable intelligence you can use to customize benefits that deeply resonate, boosting job satisfaction and ultimately improving retention rates.

Yet there’s another layer to this. Developing these surveys and interviews calls for a refined touch. It’s not enough to simply ask, “What benefits would you like?” and anticipate sincere replies. Structure your questions to reveal the motivations behind the preferences. For example, instead of asking, “Would you like a gym membership?” query, “What activities do you turn to for stress relief?” In doing so, you’re not just randomly offering perks; you’re cultivating an environment of empathy and respect.

And let’s not forget, that the foundation of a successful survey or interview is ensuring anonymity and a guarantee of zero repercussions, which paves the way for transparent feedback—the bedrock of any robust retention strategy.

Ask why this perk is going to make a difference

Free bagels are nice, but ultimately, most people who want a bagel are going to grab one on the way to work. A free meal at work is particularly useful when you’re asking your employees to go above and beyond for some reason. Do you need them to come in early or stay late? Provide coffee or pizza or bagels. Do you need them to stay in the office for lunch so that there can be an all-office meeting? Get a catered meal.

These incentives are most effective when used to reward excellent performance or to show gratitude for extra effort.

Perks need to be part of a culture of thankfulness

Ask yourself: when was the last time your employees got real-time feedback on something they did well, and something they could improve? If you only think about such things during their yearly reviews, you’re failing your talent, and they probably know it.

Highly skilled people often critique themselves a lot. They need to know from the people around them what they’re doing well because they often have a distorted sense of their own success. The problem is that they can also see false praise a thousand miles away, and just saying “Great job today,” isn’t going to be enough.

When you praise your employees, be specific and direct. “I saw that you stayed late to get everything done on the Adams account. Thank you for being so thorough. When I presented the completed work, everyone was impressed, specifically with what you did on the sub-accounts. Would you be interested in talking with me more about how you did that, so we can see if it’s something that we should be implementing across the board?” This would be a good way to thank someone who likes to know that their ideas are valued by the institution, and who would feel rewarded by a chance to share those ideas with the larger company.

The dark side of perks

You may believe that offering perks is a guaranteed way to fuel your team’s motivation. Think again. Perks can sometimes have unintended consequences, shifting the work culture from one of gratitude to entitlement. For instance, unlimited vacation days might sound appealing until you notice a decline in overall productivity. The key isn’t to shower employees with perks; it’s to align these incentives with your company’s overarching goals and values.

You may not realize it, but perks can sow discord among team members. Offering free gym memberships is a nice idea, but what about those who have no interest in working out? They could end up feeling excluded or undervalued. The solution? Provide a variety of perks that resonate with diverse lifestyles and preferences, ensuring everyone feels included.

Sure, free lunches might earn you a nod of approval, but are they genuinely enhancing job satisfaction? Sometimes, perks act as a distraction from underlying issues, like job dissatisfaction or limited career growth opportunities. Your team may appreciate the free coffee, but what they might truly crave are more engaging assignments or improved work-life balance.

Let’s be clear: perks are an investment, not just in terms of money but also administrative effort. The time and resources spent on managing these benefits can be considerable. If these extras aren’t leading to meaningful gains in employee satisfaction and retention, it might be time to reassess your approach.

So what do I need to do to retain talent?

There isn’t an easy answer, because each person will have a different set of requirements for their job to be ideal. For some people, a flexible schedule trumps all; for others, making sure that those above and below them care about what they think is the most important perk of their job. In the end, the key is to build a culture where you listen to your employees and meet their needs whenever you can.

To achieve this, build a flexible organization that values each employee as unique, not just a replaceable part. While free lunches and desk toys may offer temporary satisfaction, it’s the workplace perks tailored to individual needs—like mentorship programs or skill-building workshops—that truly elevate employee engagement and make your team feel valued.

The science of motivation

You may wonder why free lunches and gym passes aren’t the magic formula for employee happiness. To understand this, let’s delve into the science of motivation, specifically Maslow’s hierarchy of needs. This framework outlines human motivation as a pyramid, starting with basic survival needs and ascending to self-actualization. The catch? Most workplace perks target only the pyramid’s base, like physical and security needs, while neglecting higher-level needs such as esteem and self-fulfillment where true job satisfaction resides.

The plot thickens. Studies indicate that intrinsic motivation, the kind that comes from personal fulfillment, often outweighs extrinsic motivators like money or perks. To leverage this, focus on opportunities for skill advancement or mentorship programs. These align with higher-level needs and contribute to sustained job satisfaction. Consider an employee offered the chance to spearhead a project or participate in a career-advancing seminar. That’s not just a perk; it’s a transformative experience enhancing loyalty and performance.

To wrap it up, the key to lasting job satisfaction isn’t just free lunches and gym memberships. It’s blending these with intrinsic motivators such as skill enhancement or purposeful work. The beauty of this approach? It’s grounded in robust psychological and sociological research, not just fleeting workplace trends. So, when planning your next set of employee perks, go beyond the free snacks and tap into what genuinely energizes your team. Chances are, the secret to high retention rates lies in meeting not just their basic needs but also their more profound aspirations.

Building a culture of appreciation

Free lunches and gym memberships are nice, but let’s be real: they barely scratch the surface of what truly makes employees feel valued. These perks are a good start, but the real magic happens when you cultivate a culture that deeply appreciates your team. What’s the secret ingredient? It’s about creating an environment where everyone feels valued for their unique skills.

Consider Sarah, who’s been pulling late nights to meet a pressing deadline. A casual “Good work” doesn’t do justice to her dedication. What would make an impact is a personalized note from her manager that highlights the importance of her contributions to the project. Acknowledgment goes beyond mere gratitude; it’s about identifying and celebrating each team member’s unique value.

Don’t underestimate the power of real listening. It’s more than just nodding along; it’s about deeply engaging with what’s being said. When team members feel their voices are heard, they feel a sense of belonging. Regular team huddles where everyone can speak up, coupled with consistently monitored suggestion boxes, really drive the point home.

Empathy is more than a trendy term; it’s a meaningful action. Recognizing the diverse needs and challenges of each employee is key. For example, offering flexible work schedules for parents can make a huge difference. It’s not just the perks you offer, but the manner in which they’re offered that counts. Customizing benefits according to individual needs sends a clear message: you view your employees not merely as functionaries but as full-fledged human beings with lives beyond the office.

Case studies: Perks that worked and those that didn’t

The Google model: a success story

You might think free food and ping-pong tables are the secret sauce behind Google’s employee satisfaction. But there’s more to it. Google uses data analytics to understand what makes their employees tick. They’ve found that psychological safety and career growth are key. So, they’ve implemented mentorship programs and continuous learning opportunities. The result? Google consistently ranks as one of the best places to work. The takeaway here is that perks should align with deeper employee needs and company values.

The Yahoo downfall: a cautionary tale

Remember Yahoo? They tried to lure talent with perks like free iPhones and food. But they missed the mark on understanding what their employees really wanted: job security and a clear career path. When the company started to falter, those perks couldn’t keep people around. Employees jumped ship, and Yahoo’s attempt to save itself through perks alone failed. The lesson? Perks are not a substitute for a strong company culture and job satisfaction.

The Zappos experiment: Holacracy and its pitfalls

Zappos, known for its customer service, decided to implement “Holacracy,” a system aimed at leveling the playing field and doing away with job titles. While it sounded good on paper, it led to confusion and a 30% turnover rate. Zappos learned the hard way that radical changes need to be carefully considered and aligned with what employees actually want.

The Netflix paradigm: freedom and responsibility

Netflix took a different route. They offer unlimited vacation days and a culture built on freedom and responsibility. It’s not for everyone, but it attracts self-motivated individuals who thrive in such environments. Netflix shows us that understanding your workforce’s unique needs can lead to a tailored, effective perks strategy.

Key takeaways

  1. Understand your employees’ deeper needs, not just surface-level desires.
  2. Align perks with company values and long-term goals.
  3. Don’t rely on perks alone to retain talent; they are part of a bigger picture.

How does your organization retain its top talent? What is the most crucial factor that keeps you at your current job?

The unveiled truth


  1. Immediate Gratification: Free food or small gifts offer instant pleasure. Employees don’t have to wait for an annual bonus; they get something right now. It’s like a quick shot of workplace happiness.
  2. Low-Cost Investment: Compared to more substantial benefits like healthcare or retirement plans, free lunches and small gifts are relatively inexpensive. It’s a cost-effective way to add a layer of employee satisfaction.
  3. Universal Appeal: Let’s face it, who doesn’t like free food? These perks are generally well-received because they cater to a basic human need—hunger.
  4. Ease of Implementation: You don’t need a committee or a three-month review to start offering free coffee. It’s a perk that can be rolled out quickly, showing immediate responsiveness to employee needs.
  5. Short-Term Productivity Boost: When employees know there’s a free lunch or a small gift at stake, you’ll often see a short-term spike in productivity. It’s human nature to work a bit harder when there’s an immediate reward.


  1. Diminishing Returns: The first time you get a free lunch, it’s exciting. The tenth time? Not so much. The novelty wears off quickly, and what was once a perk becomes an expectation.
  2. Lack of Personalization: Not everyone is motivated by the same things. While Sarah might love the free gym membership, Tom could be indifferent because he prefers outdoor activities. One-size-fits-all rarely works for employee satisfaction.
  3. Distraction from Core Issues: Freebies can sometimes act as a smokescreen, masking deeper issues like lack of career growth or poor management. Employees might enjoy the perks but still feel unfulfilled in their roles.
  4. Potential for Entitlement: When perks are given without a specific rationale, they can create a sense of entitlement among employees. This can be a slippery slope, leading to dissatisfaction when expectations are not met.
  5. Administrative Burden: Believe it or not, those free lunches require someone to order them, manage dietary restrictions, and handle the logistics. The administrative effort can add up, diverting resources from more impactful initiatives.

The Hidden Psychology Behind Employee Retention

The Impact of Cognitive Biases on How We Value Employee Perks
Cognitive biases such as the “recency effect” can sway employees to appreciate new or unique benefits. Businesses can take advantage of this by cycling perks throughout the year, maintaining employee interest without ramping up costs. The “halo effect” also comes into play. When a company shines in one domain, it casts a glow on others. For instance, a top-notch mentorship initiative can elevate the appeal of even modest benefits like complimentary coffee.

How Social Proof Amplifies the Appeal of Perks
The power of social proof—how others influence our choices—can either enhance or undermine a perk’s effectiveness. When prominent figures within the organization are seen taking advantage of a perk, its value escalates for the rest of the team. Companies can smartly deploy perks through these influencer channels, generating a cascade of engagement and satisfaction.

The Economic Ramifications of Perks on Staff Retention
Frequent staff departures can cost a business as much as a third of an employee’s annual earnings. Although perks aren’t a silver bullet for this issue, they are a useful tool within a broader retention strategy. Data-backed insights can guide companies to implement perks that genuinely contribute to employee loyalty, making for a more precise and impactful plan.

The Underestimated Strength of Autonomy and Skill Development
Empowering employees with autonomy—freedom over their tasks—is a potent motivator. Businesses can introduce “autonomy vouchers” that permit employees to focus on self-selected projects for designated periods. Similarly, the drive to master a skill is a significant morale booster. Specialized training sessions or workshops can fuel this drive, elevating both skill sets and job satisfaction.

The Overlooked Expenses of Offering Perks
While the costs of perks may seem trivial, they accumulate. It’s essential for companies to weigh the ROI for each benefit, considering not only direct expenditures but also the time spent on program administration. Some perks even bring tax ramifications, adding an extra layer of fiscal complexity.

The Advent of Customizable Perk Platforms
Emerging technologies facilitate the scaling of personalized perks. These platforms enable employees to pick from a varied selection, guaranteeing that everyone finds something valuable. Such platforms also collect utilization data, offering invaluable insights into what truly resonates with employees.

The Necessity for Transparency in Perk Allocation
Ambiguity about who is eligible for what perk can erode team morale and spawn feelings of unfairness. Clear and well-communicated guidelines are essential. Transparent policies also improve the quality of data gathered, ensuring more accurate assessments of perk effectiveness.

The Next Horizon for Perks: Exploring Virtual Realities
Advancements in technology continually redefine the landscape of imaginative perks. Virtual reality experiences or augmented reality enhancements for the workspace could be the exciting next steps. These futuristic concepts offer intriguing avenues for keeping employees intrigued and engaged over the long term.

  1. Dynamic Perk Allocation: Use machine learning algorithms to analyze employee performance, engagement, and feedback to dynamically allocate perks. This ensures that perks are not just personalized but also evolve with the employee’s changing needs and contributions.
  2. Tax Benefits: In the U.S., some perks like tuition reimbursement are tax-deductible for companies and can be tax-exempt for employees up to a certain limit. Always consult a tax advisor to maximize these benefits.
  3. Perk Audits: Conduct regular “perk audits” to assess the utilization and effectiveness of each perk. Use this data to phase out underutilized perks and introduce new ones that align better with employee needs.
  4. Transparency in Allocation: Use a blockchain-based system to ensure complete transparency in how perks are allocated. This can significantly enhance trust and fairness in the system.
  5. Virtual Reality Onboarding: As remote work becomes more prevalent, consider using Virtual Reality (VR) for onboarding and training. This high-tech perk not only wows employees but also provides a more immersive training experience.

Why Free Food and Cheap Gifts Won’t Retain Talent

Key Facts and Statistics

  1. Employee Turnover Costs: According to a study by the Society for Human Resource Management (SHRM), the average cost of hiring a new employee is around $4,129, and it takes about 42 days to fill a position. This underscores the importance of retaining talent, as opposed to relying on superficial perks that don’t contribute to long-term employee satisfaction.
  2. Intrinsic vs Extrinsic Motivation: A meta-analysis published in the Psychological Bulletin found that intrinsic motivators like personal development and job satisfaction have a 40% higher impact on employee retention compared to extrinsic motivators like pay and perks. This aligns with the article’s point on focusing on higher-level needs.
  3. Flexibility Matters: According to a FlexJobs survey, 80% of U.S. workers would be more loyal to their employers if they had flexible work options. This statistic emphasizes the article’s point that perks should be tailored to individual needs, such as flexible scheduling.
  4. The Fallacy of Free Food: A Harvard Business Review study revealed that only 19% of employees felt that free food at work made them substantially happier or more satisfied with their jobs. This data point highlights the limited impact of such perks.
  5. Employee Engagement: Gallup’s State of the American Workplace report states that only 33% of employees are engaged at work. The report also found that companies with highly engaged workforces outperformed their peers by 147% in earnings per share. This suggests that aligning perks with company objectives can significantly impact performance.
  6. Psychological Safety: Google’s Project Aristotle found that psychological safety is the most critical factor that distinguishes high-performing teams. This supports the article’s point about the importance of creating an environment of empathy and respect.
  7. The ROI of Employee Engagement: According to a study by the Queen’s School of Business and the Gallup Organization, disengaged workers had 37% higher absenteeism, 49% more accidents, and 60% more errors and defects. In organizations with low employee engagement scores, they experienced an average of 18% lower productivity, 16% lower profitability, 37% lower job growth, and 65% lower share price over time.
  8. Cost of Employee Turnover: According to the Work Institute’s 2019 Retention Report, U.S. employers paid a staggering $617 billion in turnover costs. The report also found that 77% of that turnover could have been prevented by employers.
  9. The Power of Personalization: A study by Deloitte found that 56% of companies have moved towards more flexible, team-centric models, which allow for personalized work experiences. This aligns with the article’s emphasis on tailoring perks to individual needs.

Unique Insights and Practical Tips

  1. Data-Driven Perk Allocation: Use data analytics tools to assess the effectiveness of various perks. Measure metrics like employee engagement levels before and after the implementation of a new perk. This approach ensures that resources are allocated efficiently.
  2. Personalized Perk Platforms: Consider implementing software that allows employees to choose their perks, within a budget allocated by the company. This ensures that everyone gets something they value, increasing overall satisfaction.
  3. Regular Feedback Loops: Establish a system for regular feedback on perks and benefits. This could be as simple as a quarterly anonymous survey. The data collected can be invaluable for refining your perks strategy.
  4. Trial Periods for New Perks: Before rolling out a new perk company-wide, consider a pilot program with a small group of employees. Measure its impact on job satisfaction and performance to determine its effectiveness.
  5. Legal Considerations: Always consult with legal experts to ensure that your perks and benefits are compliant with state and federal laws. This is particularly important for perks like flexible work schedules, which may have legal implications.
  6. Psychological Contracts: Beyond the written employment contract, every employee has a “psychological contract” with their employer. This unwritten set of expectations can significantly impact how perks are received. If employees feel the psychological contract is broken (e.g., they’re given perks instead of a deserved promotion), the perks can backfire.
  7. The Law of Diminishing Returns: This economic principle applies to employee perks. Initially, a new perk may boost morale and productivity. However, as employees get used to it, the impact diminishes. This is why it’s crucial to keep refreshing your perks strategy.
  8. The Hawthorne Effect: This psychological phenomenon suggests that people improve their behavior or performance when they know they’re being observed. This could be leveraged in the context of perks by making the allocation of certain perks more visible, thus encouraging a culture of performance and meritocracy.


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