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Joni Prose
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Perks: The Smart Way To Take Them Away


Employees quickly get attached to free perks. Free coffee, soda, snacks, lunch on Fridays, company outings and holiday parties are benefits employees view as bonuses.

That’s why taking any of these perks away can be a grueling process. It may sometimes disrupt the company, anger your employees and even foster mistrust.

Make it less painful by engaging employees and properly communicating the change.

Adverse Impact

When your company’s financial performance is down, cutting out perks might seem like a cost-cutting initiative; however, consider the value and significance your employees place on perks. Will productivity suffer if they disappear?

Don’t underestimate the resistance you’ll get from employees, or the adverse impact eliminating a popular perk might have on productivity or employee retention.

Perks and Productivity

Whether by design or by chance, some perks improve productivity. Providing free coffee, drinks and snacks for employees makes it more convenient for them to work late at the office. Take away the coffee and they’ll have to run out to get their own – and if it’s after 5 p.m., they might just go home instead of going back to work.

Impact on Retention

In financially challenging times, you need your employees help to turn your business around. Suppose increasing productivity is a key factor if your business is going to survive a recession.

If you eliminate perks to save money, and your employees resent the changes, you won’t have the goodwill you need for the turnaround. A drop in goodwill can end up in  increased turnover, making it harder than ever to increase your productivity.

Honest Communication

Sometimes a perk just has to go. There are two ways to minimize the adverse reaction from employees.

  1. Be honest about why the change is needed.

Explain your decision and the magnitude of the savings. Your employees might be surprised to find out how much “free” coffee costs. Discuss the alternatives you considered so employees realize you didn’t make a capricious decision.

Acknowledge how much people liked the perk, and the negative consequences that could occur. Make it clear that the decision doesn't have any subliminal messages about employee appreciation.

  1. Give employees a say about which perks should go.

Let employees decide which perks to eliminate in order to achieve the required cost savings. They might have other ideas for saving money beyond what you had considered.

Be open to alternative proposals, such as retaining a perk, but requiring a contribution from people who use it. Perhaps make it conditional on achieving certain financial goals, such as revenue or profitability targets. 

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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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