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