Employers are always on the hunt for ways to attract, retain, and engage employees. They resort to a variety of perks including flexible scheduling, plenty of paid time off, and more. But employers also strive to go beyond those common incentives as they search for an innovative perk that will produce a payoff in the form of high engagement and productivity. 
Facebook Town
Recently, Facebook announced it had entered into a partnership with multifamily housing development company St. Anton Partners to build a $120 million, 394-unit apartment community within walking distance of Facebook’s existing Menlo Park, California, headquarters and a new campus under construction. Fifty-three of the apartments will be reserved for employees of Facebook, who will have to apply for apartments and pay the same rate that non-Facebook renters will pay.
A spokeswoman for Facebook says the development isn’t meant to be a perk so much as it is a fulfillment of the company’s pledge to help Menlo Park provide more housing options, especially affordable housing opportunities. When Facebook began building its offices in Menlo Park, it made an agreement with the city to assist with housing affordability. A statement from the company announcing the development says it is funding 15 low-income units that will be indistinguishable from the market-rate units.
The Facebook spokeswoman says since just a small number of the units will go to Facebook employees, the company doesn’t consider the apartments a retention tool, although it will be nice for the human resources department to have another option to recommend to potential employees.
The development also fits with the company’s philosophy of functional benefits – benefits that help people do their jobs to the best of their ability, the spokeswoman says. For example, the company provides free lunch so employees don’t have to pack food or go off campus to buy lunch.
While contributing to housing options may not catch on as a common benefit, a large apartment development in an area suffering a housing crunch may be much appreciated, according to Barbara Mitchell, coauthor of The Big Book of HR and The Essential HR Handbook: A Quick and Handy Resource for Any Manager or HR Professional.
Better perks=more work from employees
“One thing for sure is that employers are using what used to be ‘perks’ to make it easier for employees to work longer hours – whether on the jobsite or wherever,” Mitchell says.
Zakhar Shtulberg and Rebecca Brereton with the Talent and HR Solutions arm of Buck Consultants also see how contributing to housing options can be a valued benefit for employees. They cite studies showing that employees are concerned with the cost of commuting and its impact on the environment. They say that other studies show that significant numbers of employees report that they would leave a job if a similar one with a shorter commute became available. Plus, a majority of employees surveyed said they think employers should take steps to ease employees’ commuting difficulties.
Pay attention to the “perk” of time
When determining which perks will bring an employer a payoff and which ones won’t be worth the energy and expense, Mitchell says the organization’s culture is key. She cites the example of Motley Fool, an investment company in the Washington, D.C., area. “They have an amazing list of perks and a very employee-centric workplace, but they have the culture to support it,” she says.
“If you don’t have dedicated, engaged employees, it won’t help to give them free snacks and sodas,” Mitchell says. “Some of the perks that pay off are around time off.” For example, Motley Fool periodically draws employees’ names from a hat, and the winner has to take two weeks off within a month. The only stipulation is that the recipients of the time off have to report back on what they did with the time. “People take classes, trips, whatever and come back energized. That is a great perk,” she says.
Shtulberg and Brereton say the perks that keep employees at the office longer have more direct return on investment. They say perks such as serving breakfast and lunch, providing dry cleaning, and doggie daycare give employees incentives to come earlier, stay later, and leave the office fewer times throughout the day. The employer saves the employee money and hassle, and the employee is more productive.
But how valuable are some of the extreme perks? When are they an appropriate reward for employees’ contributions, and when might they lead to a sense of entitlement without producing a payoff?
Shtulberg and Brereton say employers can keep perks on track by making sure employees are aware of their benefits. Innovative perks such as free meals, at-work game rooms, in-office gyms, etc. represent a kind of “efficiency wage” – one that promotes engagement, boosts retention, and improves performance, they say. Whether it’s a high salary, a lucrative bonus, or great workplace perks, an efficiency wage incentivizes employees to work hard to continue to enjoy the reward.
Creating a culture of high performance
Instituting workplace perks is a particularly progressive approach to engagement, since the perks an employer offers don’t depend on or reward employee performance, Shtulberg and Brereton say. Those benefits shouldn’t be considered a form of recognition. Instead, they create a culture of high performance by giving employees all the more reason to work hard to keep their jobs and stay out of the job market. After a certain point, though, the employer sees diminishing returns, they say. That point varies for every organization based on its culture.
Mitchell agrees that the appropriateness of certain perks depends on an employer’s culture. She says she used to work in the headquarters building of Marriott International and benefited from “an amazing list” of perks – pluses such as a great cafeteria and coffee bars, a convenience-type store, bakery, dry cleaners, day care, and health club.
“All these things made our lives easier … and allowed us to work longer and concentrate better,” Mitchell says. “These are the kind of perks that pay off.” But culture determines the effectiveness.
“I don’t think perks like game rooms, gyms, etc. are really a recognition strategy – more a productivity strategy,” Mitchell says. “Yes, some people might see them as entitlement, but those people probably would feel that way without these kinds of perks. In summary, know your culture. Ask your employees what would work for them, and make good business decisions to support your organization’s goals.”