Monday, 21 August 2017

Should You Get Free Lunch In The Office?


By providing free meals, are offices providing gratuitous nourishment to their staff, or just locking them down in the office?



We've all heard (and, admit it, envied) those offices in which lies the promise of free food for all staff. Breakfast, lunch, and even dinner in some companies, is offered to employees, without a single penny leaving their pockets. These meals are not only free, but they are known generally to be higher quality than paid meals in other offices. 

But, like they say, there is no such thing as a free lunch. Free food at work has a variety of effects on a workers' life- from obvious things like their weight, their time spent at the office, to the more subtle things, like how staff interact with each other and how the food can affect worker performance.

The most obvious benefit of this particular perk is that it makes the office a more welcoming place for employees, both increasing the satisfaction of current employees and making a job at that company more appealing for potential recruits. 

Similarly, the most obvious cost of free meals at work, from an employers' perspective, is the cost of giving away food to employees. This cost has multiple layers: firstly, the employer must give up the cost of the staff, the facilities, and ingredients to make the meals themselves. Secondly, the employer gives up the potential for a small profit to be made by selling meals to employees at more than their cost price. And thirdly, the employer runs the risk of abuse of the system, which can lead to unexpected additional costs.

Despite this, massively successful companies such as Google are well-known to incorporate this practice into their offices. So the question is- why?

Perhaps even more significant than the direct benefits mentioned earlier, is the ability of a free meal in the office to win the employers more of its staff time. This starts with breakfast: providing the most important meal of the day for free increases the probability that staff will come to work sooner, reducing the level of tardiness. When it comes to lunch, employees are able to stay in the office, rather than head out to the shop to buy a meal deal. Removing this travel time, and keeping employees in the office, means lunch breaks are likely to be shorter when lunch is provided in the office.

Some companies like Google take the food offer further- even offering free dinner on-site. This increases the likelihood of late working nights- especially, in the case of Google, because many employees will be young and no doubt become dependent on meals provided by the office.

The numbers can prove that providing office meals genuinely brings greater benefits than cost*. Assume that, given the costs of ingredients, cooking facilities, staff, an economy of scale whatnot, the average cost of producing a meal is £6. Furthermore, reasonably assume lunch provided in the office increases an employee's working time by 15 minutes every day.

An example of the fine food on offer at Google
(Credit: Michael Krehan, Quora)
Google's average salary in the UK is reportedly £160,000- though it's highly likely that this figure is skewed by the number of staff being paid 7 figure salaries, so assume a lower average salary of £120,000. This means roughly £2300 a week- £640 per working day, and thus, given a 9 hour working day, £71 an hour. By offering free meals, Google increases each employee's working time by 15 minutes- bringing an extra £17.75 of value, according to the £71 an hour pay estimation. The cost of this, according to our assumption, is £6- bringing a net benefit of £11.25. So, the cost of providing the free food is more than paid for by the additional productivity!

According to the above assumptions, a minimum average wage of £56,160 is required for a business to breakeven in their offer of free lunch. For most large businesses, this is not an unreasonable level.

From an employee perspective however, free hot meals can have negative effects, if not executed properly. A heavy meal can negatively impact worker performance, and in the long run, can lead to weight gain. Furthermore, some argue the shorter lunch breaks caused by on-site meals can negatively impact employee wellbeing over time.

Free lunch also brings intangible benefits. We emphasised in a previous article the significance of community spirit in any office. By offering lunch in a single place, employees are more likely to eat with each other, rather than head their own separate ways, increasing the likelihood of relationships across the country developing.

So we have (loosely) proven that free lunch can bring net benefits to a successful business like Google. But does free lunch work for all businesses? No.

Massive businesses, hiring thousands of employees on a single site, may enjoy a larger economy of scale, but equally they may find it harder to monitor and control the free food. Smaller businesses are the least likely to offer free meals. Though it may be an emerging trend, particularly with Silicon Valley startups, most small businesses may not be able to invest in the facilities and staff for free office meals. Such businesses may instead decide to invest in something similar, like free snacks.

Free lunch works for most businesses that demand a lot from workers. Some businesses take the investment in such perks even further- for example, Google offers free laundry services in many offices for its employees. Such perks are luxuries- but through increasing employee satisfaction, and minimising time wasted by employees, investment in these things can provide significant benefits for the firm.

*warning- an avalanche of assumptions is imminent...
Mohammad Lone Editor

Tuesday, 15 August 2017

The Office - To Hot Desk, Cold Desk, or not Desk At All?


Can businesses increase their employee productivity if they let them work from anywhere- even from home?



Last week we discussed how businesses can work to keep their employees satisfied- we learnt how features of a job such as a trusting employee-employer relationship, the design of an office space, and a community atmosphere were crucial in keeping employees happy.

But this is not the end of the story- productivity is key, as it is the ultimate result of all the satisfaction and hard work put in by employees. Productivity is arguably the ultimate aim of any firm- it directly determines the overall output.

Like with employee satisfaction, the methods of improving productivity range from massive scale to very small details. The first feature we'll talk about today is

We mentioned last week that the atmosphere and design of an office can have significant psychological effects on those working in it. But the design of an office is equally crucial in determining productivity.

The traditional office that we are perhaps accustomed to is one that is desk-based, perhaps in cubicles or small sections, with each employee assigned their own desk to keep. However, a recent trend has emerged of what is called 'hot-desking'- where no employee actually has their own desk, but they are instead expected to come into work, unpack their things onto any open desk, and pack everything back up at the end of the day.

Could empty desks be part and parcel of the office
of the future?
On the plus side, hot-desking is argued to save employers rather significant amounts of money. A study from Vodafone UK, whose Newbury HQ is entirely hot-desk based, £5,746 could be saved per desk per year if an office is hot-desked. What's more, many argue that the nomadic behaviour brought on by hot-desking increases the opportunity for employees in a business to work with and get to know more people in the company, improving office relations.

However, hot-desking has a number of reasons to be unpopular for. Some employees see their desk as a 'home away from home', often adorning it with photos, decorations, and also organisational aids, like a whiteboard. The lack of their own desk also reduces the potential for employees to store their items at work- instead they have to take things home each day. Hot desking removes this possibility, due to the fact that employees have to clear their desks at the end of every day. From a direct productivity standpoint, there are time savings to be had from a traditional assigned desk policy, particularly when accounting for the time each employee must spend setting and packing up each day, which may be small on a daily basis but add up over time.

What's more, many argue that hot-desking doesn't always open the door for more relationships to be built. On the contrary, sitting next to new colleagues each day for some can make every day feel like their first, especially when considered that people in the office are not always so free as to get to know new people every day.

Some argue that no desk at all is the way forward- ie., the office is a thing of the past, and benefits can be enjoyed by letting employees work from home. Though one can envisage issues with this proposal- notably the lowered opportunities of communication between teams, and the potential for employee distraction- there are well-defined benefits to enabling employees to work from home. Firstly, by allowing employees to work from home, businesses can hire the best talent, regardless of any other commitments potential employees may have (most notably, having kids to drop and pick up from school). Employees can enjoy a better work-life balance, improving their satisfaction with their job and opening potential for increased productivity. Employees save time and money on commuting, too.

Businesses stand to save even more on office space and maintenance by allowing employees to work from home, and the wealth of video conferencing and document sharing platforms mean that employees can maintain communication wherever they are. Fewer sick days are expected to be taken by employees, and the lack of a trudge to the office every day may also reduce the employees' demand for leave days. And employees can use that hour or two spent commuting daily to do more work.

All this adds up to improved productivity caused by allowing employees to work from home- as much as 13.5%, according to a study by Nicholas Bloom of Stanford University.

So, what should businesses do? The answer, as it so often does, depends largely on the individual circumstances of a business. Businesses whose work is done entirely digitally, like many modern tech firms, stand to benefit perhaps most from allowing employees to work from home, while of course working from home is not such a viable option for businesses involved in face to face sales. Whatever the business, the future of the office seems to be becoming far more dynamic and less building-based. Particularly due to its cost and productivity benefits, more and more businesses appear to be shifting focus from their physical offices to alternative workplaces.
Mohammad Lone Editor

Tuesday, 8 August 2017

What's The Best Way To Keep Employees Satisfied?


There's a reason why The Office is such a popular hit TV show, that has been subject to numerous remakes from around the world. While often exaggerated, the life of seemingly regular office workers relates to many, many people who can see glimpses of their own office in the TV show.



86% of American workers sit all day at work- and the majority of these, like Michael Scott and co., are likely to be office workers. Given that the economy is driven by people working, the office is a generator for growth and economic success, and thus plays a key role in any nation's fortunes, let alone a company's.

When it comes to how offices should be run, however, there is a distinctive lack of uniformity across businesses and countries. From the renowned 'Google-plex', the Silicon Valley HQ of Google, to the more traditional cubicle based offices that have existed for decades, the office today arguably plays the greatest role it ever has in the lives of employees.

To begin looking at what kind of office brings the best results, we have to first determine what the desired result is. This will, of course, differ between businesses- but a safe assumption to make would be that a business seeks to maximise the productivity of its employees, taking cost into account. That is, the business wants to maximise output, while relatively minimising how much it pays for it.

And to go deeper, what determines productivity? Again, there are an abundance of factors- but, for simplicity, we'll look at two of the biggest- employee satisfaction, and employee organisation. We'll be exploring the first of the two today.

Employee satisfaction
The term 'satisfaction' is highly subjective, of course. Many people, usually those on the lower end of the income spectrum, will not be overly concerned with job satisfaction- sadly because many will not have the luxury of doing so. For people struggling financially, or with a lack of alternatives, hard work is a must.

Recently, a trend of 'job-hopping' has emerged, particularly among the younger generation, who seem more willing than ever to switch between jobs. They seek new challenges, new experiences, and for the more educated there is arguably more choice than ever, especially given the globalisation of the jobs market.

Thus, some younger workers today are more sensitive to their satisfaction at work- which is why companies nowadays must invest significantly in their offices if they want to recruit the brightest young people.

Not only does the prospect of job satisfaction help a business' recruitment, but it has been proven to improve performance on the job. A recent study from the University of Split in Croatia concluded that "there was an impact of the majority of job satisfaction factors on organisational performance". This is rather common sense- people who feel happier at work are likely to spend more time at work, likely to be more willing to work and thus are likely to perform better (though there is little consensus on whether more hours = better results).

The atmosphere of the office plays perhaps the most obvious role in determining employee satisfaction. This starts with the design of the office itself. Apple is not spending an expected $5bn on its beautiful new Apple Campus just for the sake of publicity- but research has proven repeatedly that a more scenic environment helps to improve wellbeing, and thus productivity at work.
Apple's new 'Spaceship' head office in Palo Alto, California

Psychology is key here- features of an office like an abundance of natural light, tall ceilings and even sufficient distance between workers and screens can impact the productivity of a worker. Evidently, this is not a discovery that works in favour of cubicle offices.

The mental wellbeing of an employee also has to be cared for- gone are the days when a worker was just counted as a number. Businesses now have to realise the full human aspect of their employees, and this is where the support system in an office is crucial. A good HR department, and sufficient pastoral support for employees can generate substantial improvements in productivity.

The employer-employee relationship must be a positive one. Bosses can no longer rely on fear, and their position of authority to bring sustainable results- they must be a lot smarter than that. They must take an active interest in their employees, and develop relationships that engender trust and loyalty from those who work for them. Different bosses will naturally have different styles that bring their results, but generally it is crucial that a boss is honest, considerate and open to their employees. Hating one's boss is such a common phenomenon that Hollywood got 2 films out of it- but in the real office, the boss-employee relationship is perhaps the most important of them all.

Maintenance of a good work-life balance is also very important. Schemes such as paid maternity and paternity leave are in vogue, and for good reason. Offering employees a 'sabbatical', time off to pursue other positive interests, also has a positive impact.

A positive community atmosphere helps massively. Whether it is through creation of communal lunch spaces, office events and competitions, or perhaps most importantly a strong bond between employer and employee, a business must invest both time and money into the office community. Not only does it improve the team harmony, which can lead to more positive results in work, but it gives employees another reason to want to work. Of course, the time dedicated to such activities must be balanced with the actual time spent working. Anyone who has watched 'The Office' will know that practically nothing actually gets done when employees are too chummy with each other. But there is a school of thought that believes once employees are taken care of and in a positive state of mind, the employees themselves will be motivated, and feel a duty, to self-regulate and ensure they get their work complete.

A positive workplace can have drastic impact on employee tenure- how long an employee stays with the business. As we mentioned earlier, the average tenure of an employee is decreasing these days- and there are both benefits and losses associated with these, that largely depend upon the firm. On the one hand, a high employee turnover rate can lead to a dynamic, fresh firm that does not get so entrenched in any old, perhaps flawed ways. On the other hand, such a high turnover requires significant investment by way of recruitment and induction, and perhaps has the adverse effect of reducing employees' loyalty to the firm.

For example, a law firm is likely to desire greater employee tenure. It will want barristers who have experience in the court of law and the kind of clients the firm serves. On the other hand a management consultancy firm (for example McKinsey & Co., which has a notoriously low average tenure) may have an interest to refresh its workforce with new blood to keep up with the changing landscape of the business world. Of course, that's not to say firms with lower average tenure will deliberately create negative workplaces- they have 'other ways' to ensure a lower tenure.

In today's world, businesses have to focus on their employees' satisfaction more than ever, and to do so, many businesses will go to extraordinary lengths: whether it's Google's free gourmet meals for all employees (which we'll discuss more next week), or Uber's super-cool office, happier employees will generally perform better.

The challenge that exists for the majority of businesses who are not Google or Uber is having the capacity to invest in such things. For these businesses, the cost of building a trendy office, or giving free food to all employees may not be financially viable (at least in the short run). This is where the less material aspects come into play. Small businesses can still offer career development opportunities to employees. Most small businesses can still create an open office atmosphere. Small businesses are suaully better, in fact, at fostering team spirit.

So whether a company is a giant or a dwarf, it is key that it recognises the importance of employee satisfaction, and invest for long run productivity gains, one way or another.

Mohammad Lone Editor