Is there really such a thing as a free lunch at work? And if so, does it matter to employees?
In the mid-1980’s, as a pup right out of college, I worked for a check printer with 66 plants in the US, each one with a cafeteria subsidized by the company. The company paid for the equipment, the space and the staff for the cafeterias, and the employees covered the very minimal cost of the food itself. Meals were super cheap, and I liked serving a company that went to such lengths for their employees.
I recalled that experience while reading this article in The New York Times recently and it primed my thoughts on free lunches, free food and snacks at work. Do these perks contribute to greater employee satisfaction, happiness or engagement?
History of Free Food
Let’s start by acknowledging that there’s a lack of academic research (or at least readily accessible research] on how free food impacts productivity at work. There’s an abundance of research on how school lunches positively impact students and that school lunches and corporate lunches started around the same time in the United States – in the early part of the 20th Century.
In fact, the company I worked for, founded in 1915, created subsidized cafeterias in their plants in the 1920’s as part of a campaign to prevent labor unions from gaining traction with the manufacturing workforce. To this day, the company has never been a union shop.
Many US and European countries began school lunch programs before WW II and it’s likely that European employers began offering subsidized or free meals at work about the same time. [I’m curious if readers have insights on this topic. Please share your experience.]
With the advent of huge margins and huge demands on workers, especially with tech firms, the availability of free or subsidized food has grown significantly since the beginning of the 21st Century. A partial list of companies that provide free or subsidized food is available at the end of this post. The list includes nearly 3 dozen companies and is by no means limited to Silicon Valley or the tech industry. From California to New York, and even firms in mid-sized cities like Rochester, Minnesota and Columbus, Ohio provide food perks to their employees.
Effects of Free Food on Employees
Does offering free food make a difference in employee satisfaction, happiness or engagement? Without scholarly research on this topic, it’s difficult to isolate free food as a driver of the employee experience. However, as a perk or general benefit for the workers, some observations can be made.
How Free Food Can Help Attract Employees
Offering free or subsidized food is certainly a way to attract new employees, especially when other firms in the geography aren’t doing so. Such a perk differentiates the company that does it from those who don’t. However, to have real teeth, it must be a formalized program. The occasional pizza lunch won’t make a company eligible for being considered a free-lunch place to work.
In markets where many companies are offering food freebies, firms must carefully delineate the unique attributes of their perk, no matter how small. We learn this from the Cornsweet Effect, when two fairly similar things are held apart, they look identical; however, when these similar things are right next to each other, the differences are more apparent. This is why long lists of features are predominant in product comparisons. The producers of product A want to demonstrate how great they look compared to products B, C, D, and E. The differences are better realized when they’re in a column next to the competition. When competition is heavy, leverage even the smallest of differences. And that’s the key: in heavily competitive situations for talent acquisition, even the smallest of benefits can become salient.
How Free Food Can Help Retain Employees
Free food is not an incentive nor is it motivational. It’s a perk. In Frederick Herzberg’s Two Factor Theory, it’s a hygiene factor. Hygiene factors, once implemented, become part of the day to day. At first, the free food announcement will be celebrated – for a moment or two. But in less time than it takes to direct deposit your paycheck, employees will have moved on to celebrating (or complaining about) something else.
An example of a hygiene factor at work is putting a microwave in the lunch room for all employees to use. On the day it arrives, everyone is happy. However, in the coming weeks and months, no one shows up at work celebrating the fact that there’s a microwave at work. That said, if the microwave disappeared, all sorts of pandemonium would erupt. At least for a while.
We humans are great adapters and hygiene factors come and go. They might even be foundational to the hedonic treadmill. But until such time as employees adapt to life without the microwave, the removal of something quite trivial will be seen as an egregious act by the firm.
In geographies where many firms offer food perks, it’s critical to maintain the status quo and not to let it slip away. Keeping up with the Joneses is a key part of remaining competitive.
Also, a free food perk can be regular and vivid. Compared to higher match-rates to the 401K, which is nearly invisible to employees on a regular basis, a food perk is experienced regularly and attends to gastronomic needs every day. A free/subsidized food program could be leveraged to be vivid and to easily remind employees of potential health benefits.
Benefits of Food as a Perk
The greatest benefit to the business is that a food perk program increases productivity by keeping more employees at work during the workday. It makes it easier to arrive early or stay late with food available in the company commissary. For those situations when work demands pile up, offering employees options beyond plastic-covered snacks from vending machines can be a meaningful benefit to the employee in the moment.
Another benefit of free food to the firm is the ability for employees to collect in common spaces more easily than if they’re trotting off to local eateries. This can lead to team cohesion and improvements in morale with more people sitting together, especially when this occurs across workgroups and teams.
On the other hand, employees benefit as well. They experience an actual cost savings in their food budget and in time. The amount of time an employee saves making food and packing it each day can be significant. Not everyone loads their leftovers into ready-to-eat containers, so meals require preparation. And of course, there is the money saved by not going out to eat, which adds up over time.
And, as noted above, such hygiene factors can – in certain geographies – be seen as unique and valuable both as an employee acquisition and employee retention tool.
Not all that glitters is gold, and such is the case with a food perk program. One of the greatest issues companies face when instituting free food is the potential for increased caloric intake for the employees. The Center for Disease Control in the United States notes that free food offerings at work add an average of 1,300 calories to each employee’s diet each week. That figure is inclusive of the most radical bad-for-you and most radical good-for-you offerings; however, there are alternatives.
Alternatives include laying out salads first as employees enter the cafeteria, putting the cookies in a slightly opaque container rather than clear glass, arrange healthy vegetables nearer to the employee’s reach, add table tents that describe the health attributes of foods offered in the cafeteria, use menu boards with codes for how healthy (or how many calories) each item contains, etc. These are all decisions that can be made to impact the choice architecture of the cafeteria. As a business leader, you are a choice architect in how you decide and research from behavioral sciences indicate these decisions can make big differences in how people choose. Ultimately, the company eatery can allow for choice while promoting healthy options.
A cafeteria is not a once-and-done decision. Frequently, onsite cafeterias bear the brunt of the ever-growing fussiness with food allergies, item preferences and what is (and isn’t) considered healthy. Once a business goes down this path, regular management will creep in. As Kermit the Frog once said, “It’s not easy being green.”
Also, there is the possibility that the company café could be silently advocating an imbalance between work and life – especially if the cafeteria remains open after business hours – and some do. This can make it all too easy to work late and eat at the office. The onsite cafeteria may be casually sending a message to those who are ambitious, “Stay at work a while longer and we’ll feed you.”
In my experience at the manufacturing company, I personally experienced the increased productivity by having breakfast and lunch in the office during peak workload times. I also watched as some employees escaped life at home by coming to work early and leaving late, leveraging the cafeteria on both ends to help them cope. There were plenty of young gunners trying to demonstrate their effort and commitment by pouring in extra hours at the office and use of the cafeteria helped demonstrate that.
The impact of an onsite café can transcend the employee’s work and life, per se. Some municipalities see corporate cafeterias as competing with local eateries. By feeding employees inside the corporate offices every day, local eateries suffer from fewer customers. Free market arguments aside, the social and community costs are worth noting. To remedy this, firms are adopting voucher systems to allow employees to spend company ‘bucks’ at local restaurants and while other firms bring food trucks to the corporate campus that are paid directly by the firm at the end of their stay.
Middle Ground or Pilot
There are also ways to meaningfully implement the perk, but not every day. That could be accomplished in several ways and testing the concept in a pilot mode can help determine how powerful the perk might be.
Rather than building out a full kitchen in your facilities, start with scrip or Corporate Bucks to be used at local restaurants or food trucks. Allocate a small amount on a weekly or monthly basis and measure the usage of that scrip when you settle up with the restaurant or caterer.
Or, allow employees to bring receipts to petty cash on one day each week – say Thursday – and try that for a month to see how many people are using it. While it might feel risky to allow any receipt to be repaid, it’s best during the pilot phase to see how employees use (or abuse) the offer. In my experience, for every 1 person who abuses the offer, 100’s more will act in a thoughtful and more conservative manner.
Once some experience is gained, decisions can be made to (a) modify or extend the pilot, (b) test something else entirely, (c) scrap the concept, or (d) move into a higher level of commitment by designing plans for the in-house café.
Yeah or Nay?
Should your company adopt a free snack or free lunch policy? Should you consider a subsidy to allow employees to eat at work or at a local eatery, at least in part, on the company’s dime? Even with the challenges involved in implementing this perk, some benefits shine through: 1. The firm can use this perk to help attract employees, 2. The firm can use it to help retain employees, 3. The firm increases productivity through less commuting around meal times, 4. Employees can enjoy this benefit by consuming it (literally) on a daily basis, 5. Employees also enjoy the increase in productivity in their ever-increasingly busy lives. These are true in nearly every geographic market and any industry where loyalty to the firm could be enhanced with an incremental perk.
The benefits outweigh the downsides which have the most to do with cost and administration.
In areas where most competitors are doing it, adopt the perk to maintain parity. In geographic markets where most other firms are not doing it, you’ll differentiate yourself in tight labor environments. And the employees will like it because it’s vivid and meaningful to them on a frequent basis.
It’s also worth noting that the press surrounding this topic is on the rise. If you’re a business leader or business owner reading this, there’s a good chance your employees are doing the same.
The New York Times: “There Is a Free Lunch, After All. It’s at the Office.”
January 7, 2019. By Priya Krishna
Glass Door: “12 Companies That Offer Free Lunch”
December 19, 2017. By Emily Moore
Forbes: “Why Do Companies Like Facebook and Google Offer Free Food?”
May 24, 2018. By John L. Miller, PhD
Business Insider: “Even if free food is on its way out in Silicon Valley, there are 3 perks employees might care about more”
August 2, 2018. By Áine Cain
USA Today: “San Francisco has news for future tech workers: your days of free lunch may be numbered”
July 26, 2018. By Marco della Cava
United States Department of Agriculture: “Food Nudges”
Amber Waves: “WhenNudging in the Lunch LineMight Be a Good Thing”
Volume 7, Issue 1 – The Economic Research Center at the USDA
2017. By Lisa Mancino & Joanne Guthrie
Free Food Employers
Nearly three dozen companies in the United States – from Omaha to San Francisco – offer completely free lunches or unlimited free snacks. Many more offer reduced-price meals and free snacks or drinks. Company list:
Google, Palo Alto
Fidelity Investments, Boston
Mayo Clinic, Rochester, MN
The United States Military
Facebook, San Francisco
Twitter, San Francisco
In-and-Out Burger, LA
Ben & Jerry’s, Vermont
Cisco, San Francisco
CoverWallet, San Francisco
CoverMyMeds, Columbus, OH
Robinhood, Palo Alto
SAP, Newtown Square, PA
Glassdoor, Mill Valley
Social Sprout, Chicago
Panda Express, Rosemead, CA
Riot Games, LA
Domo, American Fork, UT
QuantCast, San Francisco