7 ms·

The Free Coffee Test, or Lefkowitz’s Law of Corporate Financial Health (2013)

60 points by smacktoward 8y ago

chhs 8y ago
At the company I work for they don't offer free coffee. The reason they give as to why not is so the employees will actually have to go outside to get one.
- Spare_account 8y ago
  So you need a different barometer for their financial state
  - speedplane 8y ago
    Yeah, they have these crazy barometers of financial health like growth, revenue, and income. But no, snacks are the obvious better indicator.
    - TAForObvReasons 8y ago
      Those figures can be gamed. Snacks give a better impression about what management is actually feeling rather than the numbers they are projecting
      - setr 8y ago
        Snacks can be trivially gamed as well. The primary difference is that snacks aren’t a widely accepted metric, which is why they might be a good one; that is, once a metric is established, it ceases to be a good metric.
        speedplane 8y ago
        > Snacks can be trivially gamed as well. Snacks and other small perks are trivially gamed. There is a decent argument that companies that spend money on frivolous benefits to project an image of strength have something to hide. Often the frugal, conservative companies that count the pennies lead to more stability and long-term strength.
    - raverbashing 8y ago
      Don't forget non-paying customers.
    - umeshunni 8y ago
      Those are lagging indicators. Revenue can grow for months (or even years) after a company is on a declining path because of contracts, sales teams selling legacy products and so on. The premise of the article is to find leading indicators of health.
- mjlee 8y ago
  Are there services that companies can use to settle their employee's tab at a local coffee shop?
  - RandallBrown 8y ago
    Many companies have corporate credit cards. Companies like Grubhub also offer corporate accounts where employers can give their employees money to spend on food.
CoolGuySteve 8y ago
Now that I've seen this sequence play out at 3 different offices, I take this as gospel. The desperate ineffectual cut hierarchy seems to go: free breakfast, then the free drinks/snacks, then coffee, then people. Goldman Sachs was the funniest, they made the coffee cups 2 inches shorter to save money during a bad year.
- JeremyBanks 8y ago
  Hmm, Google got rid of their large coffee cups a few years ago...
- canyon289 8y ago
  I agree with this. I've seen it happen at a Fortune 100 oil company. Times were crappy post 2008, we had regular drip brew coffee. Then oil prices suddenly went up and we were getting literally billions of dollars of orders, and the fancy custom tea and coffee machine was installed. Anndddd thenn the oil price dropped and a crappy drip machine was installed, and 80% of the staff was laid off. The ideas I've read in this thread ring true!
yomritoyj 8y ago
When I'm at work the cost of a beverage is not just one dollar. It is the cost of lost productivity and time in going out to fetch a coffee, which may be so high that I'll have to make do with what's on hand. Given that I spend a larger fraction of my waking hours at the office that means the refreshments available determine my quality of life to a non-trivial extent, and a fall in their quality may make me leave from this direct effect alone. Specially if I'm good enough to get other offers which are comparable professionally.
- a012 8y ago
  How many times you fetch coffee or drinks a day that "cost of lost productivity" to you? It sounds like a bad work quality as well as personal health.
  - chrismeller 8y ago
    Even if I get up to go to the bathroom, refill my water, and get another cup of coffee 4 times a day, the point is still valid. If there is no coffee provided by the company that means I either 1) go without, or 2) have to venture out of the office to find it. In many areas leaving the office for just about anything means taking the elevator downstairs, walking through a sprawling parking lot, making a 10 minute drive to the nearest Starbucks, spending 5 minutes in the drive thru, and then reversing the whole process. I could probably justify that once a day, but upwards of 30 minutes per trip is going to be a really hard sell any more than that. Even as a freelancer who has no one looking over my shoulder and who works from home I'm simply not going to do that - I bought a coffee maker. Take that to the far opposite extreme and consider the call center employees who have hard stats for their productivity every day and have scheduled breaks... there's simply no way they _could_ do it, even if they wanted to. So yeah, maybe it's an indicator for _some jobs_ of a poor work quality, but that was the entire point - it's a cheap and easy way to improve that work quality.
    - deleted 8y ago
      [deleted]
    - 8y ago
niklasd 8y ago
From the experience of my friends, perks like beverages and snacks vary quite from industrie to industrie. For example in design related industries (agencies etc.), there often are an abundance of snack & beverages perks, in addition to a nicely furnished office etc. On the other hand, in industries like investing and law firms, snack perks are reduced to bascially soda, coffee and maybe a banana (and furniture is rather of practical appearance). And those I have seen from the inside tendend to be financially very healthy. A friend of mine explains this with the pay gap: As a designer he has a much smaller salary than his lawyer and investment friends, so his agency invests in these small (and comparably cheap perks) to keep him happy anyway, despite the pay being only okayish. This logic doesn't apply to people with six-digit salaries. So I think the variety of snacks often has little to do with financial health, more with practice. Though I agree with the author, than any changes in it (like cutting perks) propably do correlate with financial health.
- speedplane 8y ago
  True that law firms offer very little in the way of snacks (although that is starting to change), but they offer other perks that can be far more expensive, a common one being free car service home if you work past 9. Most work till 7 or 8 anyway, and it provides a little incentive to stay another hour. I haven’t seen this in other industries.
  - TAForObvReasons 8y ago
    Investment banking does this as well, and they cover late meals.
  - arethuza 8y ago
    My cynicism about law firms makes me wonder if things like "free car service" can be charged back to clients.
    - chrisseaton 8y ago
      Why's that cynical? If the client's work is causing the need for the transport then isn't it appropriate to charge it to the client?
speedplane 8y ago
So the premise of this story is this > The financial health of a company can be inferred from the quality, variety and cost to the employee of the snacks and beverages it offers its employees. It’s a fun thought experiment, but so obviously flawed. Plenty of failed companies offer these perks, plenty of successful companies don’t. Obviously companies going down-hill will reduce non-essential items to make payroll, and obviously companies on the decline are more likely to fail than others. There is no insight in this article.
- MaysonL 8y ago
  The insight comes at the end: If the snack and beverage options are better and more varied than they were on your last visit, you know that your client’s management is feeling bullish. If they’re the same, you know that the status quo is still in place. And if they have gotten noticeably worse? Consider yourself notified that you may very well in the near future have to push hard to keep your services or products from being axed too.
- ThrowMeDown01 8y ago
  The information is not in the thing itself as you say, it is in the first derivative, or in plain English, it is about the change. Not the presence of this or that perk, but when it was there and is taken away.
- HenryBemis 8y ago
  I agree with that assessment, we cannot be sure if it is the chicken or the egg. Which is the symptom and which is the root cause. Another notion of that is that when companies want to downsize (I have seen this multiple times(e.g. they need to relocate and they want to get rid of the current pool and get a new one in the new/cheaper location), they can/may/are using this tactic do make people "unhappy" with the current environment, make the experience/enjoyment poorer (no more drinks/pizzas on fridays). For this purpose (reduce headcount even while in profit) some anticipated actions are to shrink bonuses/raises, but removing someone's joyful moments definitely helps.
- craftyguy 8y ago
  In addition, it's just wrong in some cases. I've seen a company offer free beverages and also laying employees off at the same time.
kefabean 8y ago
Also, moving to a worse off situation has a much greater negative psychological impact relative to the positive impact associated with an improvement of similar magnitude in the opposite direction. (this is also my naive explanation for the global outcry and lurch to the right as inflation has caught up with stagnating wages)
josh_fyi 8y ago
Inpired by this classic from Steve Blank of lean startup Fame. https://steveblank.com/2009/12/21/the-elves-leave-middle-earth-%e2%80%93-soda%e2%80%99s-are-no-longer-free/ https://steveblank.com/2009/12/21/the-elves-leave-middle-ear...
LeonB 8y ago
Shortly after the dotcom bubble burst I did some consulting for a currency exchange startup in London that had the most amazing array of free and limitless snacks I’ve ever seen. Right up until the day they locked the doors. Things changed too quickly for them to alter the snack mix and pinch a penny.
JohnJamesRambo 8y ago
I work in academia, they actually opened a cafe in our lobby to milk more money from us. I’ve never gotten free anything, the snacks and soda are in overpriced vending machines no one can afford to use, and that pretty much sums up how I feel about the health of academia.
- femto 8y ago
  I worked in the Australian government. One day a group of big wigs had a meeting in our conference room, biscuits provided. Our group had the next meeting in the room. There was a plate with a few leftover biscuits on it in the conference room, so a few people took one. A memo came around the next day reprimanding people for taking a biscuit.
- occamrazor 8y ago
  Never had free coffee or snacks in academia. We bought a good coffee machine, bought coffee wholesale and split the expense among us. It was so appreciated that the Department later paid for two other coffee machines.
tomohawk 8y ago
By this measure, government agencies are tottering on the brink. If you want a beverage or snack, you often have to leave the office, or buy something from the meager selection, if available.
- Broken_Hippo 8y ago
  So is most retail, foodservice, call centers (even at stable companies), and anything else fairly low-paying.
hendi_ 8y ago
I interned at Texas Instruments in Germany. Mostly engineers working there, mostly big expansive cars in the parking lot, so go figure our salary.. On each floor there was a coffee vending machine, a regular cup of coffee was 0,20€. On day, management sent an email to every employee "Free coffee during 1pm and 2pm". Guess what happened? Everybody left their desks at 12:45 to stand in the queue, waiting for their coffee worth a few seconds of their time. At 2:15 everybody finished their coffee and went back to their chair. I can't help but think management paid more in wasted salaries in these 1.5h than if they'd just made caffeine freely available all the time.
- humanrebar 8y ago
  Or maybe they thought people were in their cubicles too much and coffee lines were good to get people chatting and mingling.
  - chiefalchemist 8y ago
    Agreed. There's plenty of evidence on the magic that comes from serendipitous interactions between employees who might otherwise never interact.
    - hellisothers 8y ago
      Why is this downvoted, it’s true?
      - woah 8y ago
        I suspect the militant anti open office crowd wants to suppress any potential concept of “mingling”.
        barrow-rider 8y ago
        mingling =/= open office. I can still have a quiet space where I can actually get things done, but still interact with coworkers at, say, the coffee machine or water-cooler.
albi_lander 8y ago
This law is only true for companies that poorly understand the value of perks. I work in startup where one of the main perk is that we have free lunch. This has been the case since I joined the startup, back then there were 10 people. We are now 75. Every time I tell my friends that my lunches are paid by the company, I get the same reaction which essentially is: "Man, that's so cool!" Well, you don't know what my salary is. What if I have free lunches, but I'm paid 20% less than the industry average ? The lesson I've learned through this, is that from the company POV, money spent in perks is worth more than money spent in salary, i.e. employees implicitly would rather have 300$ of free lunches paid by the company every month than +300$ on their salary. It is in the interest of the company to provide good perks, as the overall perceived employee benefits will be higher than the equivalent in 100% salary.
- pawelk 8y ago
  > employees implicitly would rather have 300$ of free lunches paid by the company every month than +300$ on their salary. I know I would. It'd take the burden of thinking about what to have for lunch every day off me. When I was working in an office I'd either bring my own lunch (most of the time), decide to order (which usually required to join a group ordering from some place, or create and manage a pool), or to go out - again, where, what time, and with whom? Each of those options was a waste of time, energy and context.
- jasode 8y ago
  >i.e. employees implicitly would rather have 300$ of free lunches paid by the company every month than +300$ on their salary. I agree that companies sometimes spend money on questionable so-called "benefits" (e.g. company-paid bowling party or motivational speakers) -- that employees would rather have as extra cash in their pocket. That said, I think company-paid lunch is an advantageous financial deal for employees since it's not taxed as income[0][1] and employees have to eat anyway. I also hate having to get into a 150-degree hot car in the summer or fight freezing snow in the winter just to go buy a lunch. The alternative of bringing my own brown-bag lunch also has hassles because of the extra prep & planning at home. Sure, an on-site catered lunch benefits the employer -- but it also benefits the employees. It's a win-win. [0] https://www.bizjournals.com/sanjose/news/2015/08/14/exclusiveno-more-free-meals-for-tech-workers-irs.html https://www.bizjournals.com/sanjose/news/2015/08/14/exclusiv... [1] daily free meals may be a gray-area tax loophole (it's not "occasional") but IRS isn't enforcing a strict interpretation of the law: https://www.irs.gov/government-entities/federal-state-local-governments/de-minimis-fringe-benefits https://www.irs.gov/government-entities/federal-state-local-...
Asooka 8y ago
> cuts [...] to stop the bleeding The way the two metaphors combine into an oxymoron gave me a smile. Are free snacks a usual perk in USA companies? Where I'm at I've never seen a company offer free snacks, it's always snacks at bulk prices paid for on the honour system. Water and coffee are free, sometimes even tea.
- perl4ever 8y ago
  As I posted elsewhere, in maybe half a dozen places I've been in the US there haven't been free snacks. But I did interview at one place with a fancy cafeteria; I got the impression they might have been trying to establish themselves as a silicon valley type of atmosphere, even though they were on the other side of the country. Once at a place I worked at, some entrepreneurial employees started a very profitable guerrilla snack selling business, but eventually management got wind and shut them down.
chiefalchemist 8y ago
These perks an easy to see symptom. Certainly able employess - especially the ones with higher market value - aren't tone deaf to the current tune management / leadership is singing. That is many are already considering heading for the door. When the perks go the tune from the aggregate symptoms has turned to noise. And away they go.
amirathi 8y ago
I disagree. At Amazon, I never saw anything free in the break room except drip coffee. Stock has soared 6 times in 6 years. At a startup, we always had free lunches every day (virtually anything you want) despite up and downs in the business.
- spiritcat 8y ago
  I remember back in the day the stories of them using doors as conference tables to save money. Not really a surprise that they were the ones to make it through the bubble and take over the world.
- wodenokoto 8y ago
  These are not bad counter examples, but I think they still hit the mark, just off center. It's the changes of perks, that predicts managements stance on future prospects. Amazon didn't change perks, so at best Lefkowitz’s Law predicts management is not bullish, not that management are fearing for the future and nothing about the state of the company [1] Similarly, nobody starts a startup without being bullish about the companys prospects. Thus the law predicts start-ups often have good perks. [1] or at least, the law is always 1 step removed from predicting the state of the business. E.g., if management have a bleak outlook, it is probably because things are indeed bleak.
LawnDart1 8y ago
Our free soda, crisps, and chocolate biscuits went away a long time ago. Not because the company wanted to save money, but because the company was more concerned about health. When we moved to a new building, we got an onsite Gym instead.
- 0-_-0 8y ago
  I would take an onsite gym over crisps and such any day!
empath75 8y ago
Relevant news story from today: https://www.google.com/amp/s/splinternews.com/thoughts-and-prayers-for-the-nra-which-cant-afford-cof-1830465382/amp https://www.google.com/amp/s/splinternews.com/thoughts-and-p...
throwaway2016a 8y ago
This rings pretty true to me. I worked for a well known tech company in 2008 (been around since the 90s, survived the .com burst but barely). And sure enough once the snacks went the layoffs started happening. It always struck me as odd because the snacks probably cost them next to nothing. I think someone thought the optics of keeping snacks while people laying people off was bad. If anything they did worse then get rid of them, they actually replaced them with a overpriced vending machine.
lasereyes136 8y ago
My experience is more that the change in drinks and snacks is more an indicator than the snacks and drinks themselves. Some companies that are doing very well just have a culture of not having snacks and charging for drinks. It is a change in the status quo that really means you are in trouble. Having been at companies that were in trouble and eventually shutdown and even being part of the decision making process in one of those, it is all cost saving in order to keep the lights on one more month, week, or day.
bliblah 8y ago
So I work on the Accounting side in my office so I can provide some numbers. For a company of 50~ employees we spend over $2,000 a month in coffee/soda/water alone. The issue is that people drink a lot of espresso so we have to buy pods and no one likes drip coffee so we also have a keurig on the side. So yeah, the amount of money saved is pretty negligible.
- perl4ever 8y ago
  I wonder if it might make sense to provide subsidized coffee/snacks rather than free. I used to work in a place that provided unlimited free K-cups and it seemed like maybe people were a bit wasteful. Charging a small amount might have a big impact on demand and still giving people a much cheaper option that Starbucks or whatever.

60 points by smacktoward 8y ago

chhs 8y ago

At the company I work for they don't offer free coffee. The reason they give as to why not is so the employees will actually have to go outside to get one.

Spare_account 8y ago
So you need a different barometer for their financial state
- speedplane 8y ago
  Yeah, they have these crazy barometers of financial health like growth, revenue, and income. But no, snacks are the obvious better indicator.
  - TAForObvReasons 8y ago
    Those figures can be gamed. Snacks give a better impression about what management is actually feeling rather than the numbers they are projecting
    - setr 8y ago
      Snacks can be trivially gamed as well. The primary difference is that snacks aren’t a widely accepted metric, which is why they might be a good one; that is, once a metric is established, it ceases to be a good metric.
      - speedplane 8y ago
        > Snacks can be trivially gamed as well. Snacks and other small perks are trivially gamed. There is a decent argument that companies that spend money on frivolous benefits to project an image of strength have something to hide. Often the frugal, conservative companies that count the pennies lead to more stability and long-term strength.
  - raverbashing 8y ago
    Don't forget non-paying customers.
  - umeshunni 8y ago
    Those are lagging indicators. Revenue can grow for months (or even years) after a company is on a declining path because of contracts, sales teams selling legacy products and so on. The premise of the article is to find leading indicators of health.
mjlee 8y ago
Are there services that companies can use to settle their employee's tab at a local coffee shop?
- RandallBrown 8y ago
  Many companies have corporate credit cards. Companies like Grubhub also offer corporate accounts where employers can give their employees money to spend on food.

CoolGuySteve 8y ago

Now that I've seen this sequence play out at 3 different offices, I take this as gospel. The desperate ineffectual cut hierarchy seems to go: free breakfast, then the free drinks/snacks, then coffee, then people. Goldman Sachs was the funniest, they made the coffee cups 2 inches shorter to save money during a bad year.

JeremyBanks 8y ago
Hmm, Google got rid of their large coffee cups a few years ago...
canyon289 8y ago
I agree with this. I've seen it happen at a Fortune 100 oil company. Times were crappy post 2008, we had regular drip brew coffee. Then oil prices suddenly went up and we were getting literally billions of dollars of orders, and the fancy custom tea and coffee machine was installed. Anndddd thenn the oil price dropped and a crappy drip machine was installed, and 80% of the staff was laid off. The ideas I've read in this thread ring true!

yomritoyj 8y ago

When I'm at work the cost of a beverage is not just one dollar. It is the cost of lost productivity and time in going out to fetch a coffee, which may be so high that I'll have to make do with what's on hand. Given that I spend a larger fraction of my waking hours at the office that means the refreshments available determine my quality of life to a non-trivial extent, and a fall in their quality may make me leave from this direct effect alone. Specially if I'm good enough to get other offers which are comparable professionally.

a012 8y ago
How many times you fetch coffee or drinks a day that "cost of lost productivity" to you? It sounds like a bad work quality as well as personal health.
- chrismeller 8y ago
  Even if I get up to go to the bathroom, refill my water, and get another cup of coffee 4 times a day, the point is still valid. If there is no coffee provided by the company that means I either 1) go without, or 2) have to venture out of the office to find it. In many areas leaving the office for just about anything means taking the elevator downstairs, walking through a sprawling parking lot, making a 10 minute drive to the nearest Starbucks, spending 5 minutes in the drive thru, and then reversing the whole process. I could probably justify that once a day, but upwards of 30 minutes per trip is going to be a really hard sell any more than that. Even as a freelancer who has no one looking over my shoulder and who works from home I'm simply not going to do that - I bought a coffee maker. Take that to the far opposite extreme and consider the call center employees who have hard stats for their productivity every day and have scheduled breaks... there's simply no way they _could_ do it, even if they wanted to. So yeah, maybe it's an indicator for _some jobs_ of a poor work quality, but that was the entire point - it's a cheap and easy way to improve that work quality.
  - deleted 8y ago
    [deleted]
  - 8y ago

niklasd 8y ago

From the experience of my friends, perks like beverages and snacks vary quite from industrie to industrie. For example in design related industries (agencies etc.), there often are an abundance of snack & beverages perks, in addition to a nicely furnished office etc. On the other hand, in industries like investing and law firms, snack perks are reduced to bascially soda, coffee and maybe a banana (and furniture is rather of practical appearance). And those I have seen from the inside tendend to be financially very healthy. A friend of mine explains this with the pay gap: As a designer he has a much smaller salary than his lawyer and investment friends, so his agency invests in these small (and comparably cheap perks) to keep him happy anyway, despite the pay being only okayish. This logic doesn't apply to people with six-digit salaries. So I think the variety of snacks often has little to do with financial health, more with practice. Though I agree with the author, than any changes in it (like cutting perks) propably do correlate with financial health.

speedplane 8y ago
True that law firms offer very little in the way of snacks (although that is starting to change), but they offer other perks that can be far more expensive, a common one being free car service home if you work past 9. Most work till 7 or 8 anyway, and it provides a little incentive to stay another hour. I haven’t seen this in other industries.
- TAForObvReasons 8y ago
  Investment banking does this as well, and they cover late meals.
- arethuza 8y ago
  My cynicism about law firms makes me wonder if things like "free car service" can be charged back to clients.
  - chrisseaton 8y ago
    Why's that cynical? If the client's work is causing the need for the transport then isn't it appropriate to charge it to the client?

speedplane 8y ago

So the premise of this story is this > The financial health of a company can be inferred from the quality, variety and cost to the employee of the snacks and beverages it offers its employees. It’s a fun thought experiment, but so obviously flawed. Plenty of failed companies offer these perks, plenty of successful companies don’t. Obviously companies going down-hill will reduce non-essential items to make payroll, and obviously companies on the decline are more likely to fail than others. There is no insight in this article.

MaysonL 8y ago
The insight comes at the end: If the snack and beverage options are better and more varied than they were on your last visit, you know that your client’s management is feeling bullish. If they’re the same, you know that the status quo is still in place. And if they have gotten noticeably worse? Consider yourself notified that you may very well in the near future have to push hard to keep your services or products from being axed too.
ThrowMeDown01 8y ago
The information is not in the thing itself as you say, it is in the first derivative, or in plain English, it is about the change. Not the presence of this or that perk, but when it was there and is taken away.
HenryBemis 8y ago
I agree with that assessment, we cannot be sure if it is the chicken or the egg. Which is the symptom and which is the root cause. Another notion of that is that when companies want to downsize (I have seen this multiple times(e.g. they need to relocate and they want to get rid of the current pool and get a new one in the new/cheaper location), they can/may/are using this tactic do make people "unhappy" with the current environment, make the experience/enjoyment poorer (no more drinks/pizzas on fridays). For this purpose (reduce headcount even while in profit) some anticipated actions are to shrink bonuses/raises, but removing someone's joyful moments definitely helps.
craftyguy 8y ago
In addition, it's just wrong in some cases. I've seen a company offer free beverages and also laying employees off at the same time.

kefabean 8y ago

Also, moving to a worse off situation has a much greater negative psychological impact relative to the positive impact associated with an improvement of similar magnitude in the opposite direction. (this is also my naive explanation for the global outcry and lurch to the right as inflation has caught up with stagnating wages)

josh_fyi 8y ago

Inpired by this classic from Steve Blank of lean startup Fame. https://steveblank.com/2009/12/21/the-elves-leave-middle-earth-%e2%80%93-soda%e2%80%99s-are-no-longer-free/ https://steveblank.com/2009/12/21/the-elves-leave-middle-ear...

LeonB 8y ago

Shortly after the dotcom bubble burst I did some consulting for a currency exchange startup in London that had the most amazing array of free and limitless snacks I’ve ever seen. Right up until the day they locked the doors. Things changed too quickly for them to alter the snack mix and pinch a penny.

JohnJamesRambo 8y ago

I work in academia, they actually opened a cafe in our lobby to milk more money from us. I’ve never gotten free anything, the snacks and soda are in overpriced vending machines no one can afford to use, and that pretty much sums up how I feel about the health of academia.

femto 8y ago
I worked in the Australian government. One day a group of big wigs had a meeting in our conference room, biscuits provided. Our group had the next meeting in the room. There was a plate with a few leftover biscuits on it in the conference room, so a few people took one. A memo came around the next day reprimanding people for taking a biscuit.
occamrazor 8y ago
Never had free coffee or snacks in academia. We bought a good coffee machine, bought coffee wholesale and split the expense among us. It was so appreciated that the Department later paid for two other coffee machines.

tomohawk 8y ago

By this measure, government agencies are tottering on the brink. If you want a beverage or snack, you often have to leave the office, or buy something from the meager selection, if available.

Broken_Hippo 8y ago
So is most retail, foodservice, call centers (even at stable companies), and anything else fairly low-paying.

hendi_ 8y ago

I interned at Texas Instruments in Germany. Mostly engineers working there, mostly big expansive cars in the parking lot, so go figure our salary.. On each floor there was a coffee vending machine, a regular cup of coffee was 0,20€. On day, management sent an email to every employee "Free coffee during 1pm and 2pm". Guess what happened? Everybody left their desks at 12:45 to stand in the queue, waiting for their coffee worth a few seconds of their time. At 2:15 everybody finished their coffee and went back to their chair. I can't help but think management paid more in wasted salaries in these 1.5h than if they'd just made caffeine freely available all the time.

humanrebar 8y ago
Or maybe they thought people were in their cubicles too much and coffee lines were good to get people chatting and mingling.
- chiefalchemist 8y ago
  Agreed. There's plenty of evidence on the magic that comes from serendipitous interactions between employees who might otherwise never interact.
  - hellisothers 8y ago
    Why is this downvoted, it’s true?
    - woah 8y ago
      I suspect the militant anti open office crowd wants to suppress any potential concept of “mingling”.
      - barrow-rider 8y ago
        mingling =/= open office. I can still have a quiet space where I can actually get things done, but still interact with coworkers at, say, the coffee machine or water-cooler.

albi_lander 8y ago

This law is only true for companies that poorly understand the value of perks. I work in startup where one of the main perk is that we have free lunch. This has been the case since I joined the startup, back then there were 10 people. We are now 75. Every time I tell my friends that my lunches are paid by the company, I get the same reaction which essentially is: "Man, that's so cool!" Well, you don't know what my salary is. What if I have free lunches, but I'm paid 20% less than the industry average ? The lesson I've learned through this, is that from the company POV, money spent in perks is worth more than money spent in salary, i.e. employees implicitly would rather have 300$ of free lunches paid by the company every month than +300$ on their salary. It is in the interest of the company to provide good perks, as the overall perceived employee benefits will be higher than the equivalent in 100% salary.

pawelk 8y ago
> employees implicitly would rather have 300$ of free lunches paid by the company every month than +300$ on their salary. I know I would. It'd take the burden of thinking about what to have for lunch every day off me. When I was working in an office I'd either bring my own lunch (most of the time), decide to order (which usually required to join a group ordering from some place, or create and manage a pool), or to go out - again, where, what time, and with whom? Each of those options was a waste of time, energy and context.
jasode 8y ago
>i.e. employees implicitly would rather have 300$ of free lunches paid by the company every month than +300$ on their salary. I agree that companies sometimes spend money on questionable so-called "benefits" (e.g. company-paid bowling party or motivational speakers) -- that employees would rather have as extra cash in their pocket. That said, I think company-paid lunch is an advantageous financial deal for employees since it's not taxed as income[0][1] and employees have to eat anyway. I also hate having to get into a 150-degree hot car in the summer or fight freezing snow in the winter just to go buy a lunch. The alternative of bringing my own brown-bag lunch also has hassles because of the extra prep & planning at home. Sure, an on-site catered lunch benefits the employer -- but it also benefits the employees. It's a win-win. [0] https://www.bizjournals.com/sanjose/news/2015/08/14/exclusiveno-more-free-meals-for-tech-workers-irs.html https://www.bizjournals.com/sanjose/news/2015/08/14/exclusiv... [1] daily free meals may be a gray-area tax loophole (it's not "occasional") but IRS isn't enforcing a strict interpretation of the law: https://www.irs.gov/government-entities/federal-state-local-governments/de-minimis-fringe-benefits https://www.irs.gov/government-entities/federal-state-local-...

Asooka 8y ago

> cuts [...] to stop the bleeding The way the two metaphors combine into an oxymoron gave me a smile. Are free snacks a usual perk in USA companies? Where I'm at I've never seen a company offer free snacks, it's always snacks at bulk prices paid for on the honour system. Water and coffee are free, sometimes even tea.

perl4ever 8y ago
As I posted elsewhere, in maybe half a dozen places I've been in the US there haven't been free snacks. But I did interview at one place with a fancy cafeteria; I got the impression they might have been trying to establish themselves as a silicon valley type of atmosphere, even though they were on the other side of the country. Once at a place I worked at, some entrepreneurial employees started a very profitable guerrilla snack selling business, but eventually management got wind and shut them down.

chiefalchemist 8y ago

These perks an easy to see symptom. Certainly able employess - especially the ones with higher market value - aren't tone deaf to the current tune management / leadership is singing. That is many are already considering heading for the door. When the perks go the tune from the aggregate symptoms has turned to noise. And away they go.

amirathi 8y ago

I disagree. At Amazon, I never saw anything free in the break room except drip coffee. Stock has soared 6 times in 6 years. At a startup, we always had free lunches every day (virtually anything you want) despite up and downs in the business.

spiritcat 8y ago
I remember back in the day the stories of them using doors as conference tables to save money. Not really a surprise that they were the ones to make it through the bubble and take over the world.
wodenokoto 8y ago
These are not bad counter examples, but I think they still hit the mark, just off center. It's the changes of perks, that predicts managements stance on future prospects. Amazon didn't change perks, so at best Lefkowitz’s Law predicts management is not bullish, not that management are fearing for the future and nothing about the state of the company [1] Similarly, nobody starts a startup without being bullish about the companys prospects. Thus the law predicts start-ups often have good perks. [1] or at least, the law is always 1 step removed from predicting the state of the business. E.g., if management have a bleak outlook, it is probably because things are indeed bleak.

LawnDart1 8y ago

Our free soda, crisps, and chocolate biscuits went away a long time ago. Not because the company wanted to save money, but because the company was more concerned about health. When we moved to a new building, we got an onsite Gym instead.

0-_-0 8y ago
I would take an onsite gym over crisps and such any day!

empath75 8y ago

Relevant news story from today: https://www.google.com/amp/s/splinternews.com/thoughts-and-prayers-for-the-nra-which-cant-afford-cof-1830465382/amp https://www.google.com/amp/s/splinternews.com/thoughts-and-p...

throwaway2016a 8y ago

This rings pretty true to me. I worked for a well known tech company in 2008 (been around since the 90s, survived the .com burst but barely). And sure enough once the snacks went the layoffs started happening. It always struck me as odd because the snacks probably cost them next to nothing. I think someone thought the optics of keeping snacks while people laying people off was bad. If anything they did worse then get rid of them, they actually replaced them with a overpriced vending machine.

lasereyes136 8y ago

My experience is more that the change in drinks and snacks is more an indicator than the snacks and drinks themselves. Some companies that are doing very well just have a culture of not having snacks and charging for drinks. It is a change in the status quo that really means you are in trouble. Having been at companies that were in trouble and eventually shutdown and even being part of the decision making process in one of those, it is all cost saving in order to keep the lights on one more month, week, or day.

bliblah 8y ago

So I work on the Accounting side in my office so I can provide some numbers. For a company of 50~ employees we spend over $2,000 a month in coffee/soda/water alone. The issue is that people drink a lot of espresso so we have to buy pods and no one likes drip coffee so we also have a keurig on the side. So yeah, the amount of money saved is pretty negligible.

perl4ever 8y ago
I wonder if it might make sense to provide subsidized coffee/snacks rather than free. I used to work in a place that provided unlimited free K-cups and it seemed like maybe people were a bit wasteful. Charging a small amount might have a big impact on demand and still giving people a much cheaper option that Starbucks or whatever.