As budget planning for 2020 kicks off across the country, ‘ROI’ will no doubt be one of the most used terms of the quarter. Discussions around employee benefits and perks will be no exceptions, as business leaders like myself question the long-term benefits of the rewards we give to our teams. Contributor Mitchell Mark, Co-founder – nez
Employee engagement programmes are a well-established practice for attracting and retaining top talent, and the ROI is unquestionable, given the costs involved with recruiting and training a new employee – some initiatives have been proven to increase profits by as much as £1,586 per employee per year. But choosing the right ones for your company is the real challenge.
Every employee wants something different from their company, from flexible working hours to health insurance, or being able to bring your dog into work with you. So companies will often look to the benefits that are proven to be the most cost-effective.
Food and drink perks likely won’t be #1 on many firms’ lists, given that most will need to prioritise the basic essentials, such as bonus plans and insurance coverage. Beyond that, my personal belief is that offering personal development and giving employees the opportunity to volunteer with causes that are important to them are two incentives to invest in.
But when it comes to low hanging fruit to supplement a wider employee engagement program, food perks has to be the winner, being incredibly easy to execute and having a clearly proven ROI. Well-fed employees are 54 percent more likely to stay with a company and 70 percent more likely to recommend it as a place to work.
At one point, it was estimated that Google was spending more than $70 million a year on free meals for its staff. This will be an eye-watering amount for any CFO but is likely justifiable when you consider that popping out for coffee, snacks and long lunches with clients can amount to roughly 125 hours of time out of the office per employee annually.
The trick is how you deliver the perks themselves. At nez, we keep the focus on going out for lunch as a team, so we give each employee £5 credit a week to spend at a nearby restaurant or cafe. This leads to most of the team going out for lunch as a group on a weekly basis, contributing to ROI by creating a company culture and a more engaged workforce.
This kind of perk is really cost effective, as you only pay what gets used by the employee, whereas ordering pizzas to the office can often lead to over-ordering and waste. What’s more, it’s trivial benefits eligible, which can save a company up to 19 percent. With nez perks, a company pays an average of just £3.19 for every £5 credit redeemed by an employee. According to entrepreneur.com, the potential ROI can be as high as 150 percent, making food perks an obvious choice for any company looking for a cost-effective way of engaging their staff.