Free Lunches Bring the Workers In, but They Don’t Always Stay

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Genevieve Douglas

Free on-site cafeterias, long part of the Silicon Valley mystique for job-seekers, aren’t necessarily a key ingredient for retention.

This could be good news for companies that would be affected if a proposed San Francisco ban on workplace eateries goes through. The proposal, which San Francisco’s Board of Supervisors could vote on this fall, aims to stop employers from setting up new facilities with on-site cafeterias. The proposal is backed by the Golden Gate Restaurant Association, a trade group representing 4,400 restaurants in the city, which says on-site employee cafeterias are hurting their businesses.

Employers in the area have said the ability to offer free lunch and snacks helps them compete for and keep top talent.

“There is a difference between what is enticing to workers in the recruitment process as opposed to what leads to long-term satisfaction,” Amelia Green-Vamos, an employer trends analyst for Glassdoor in Mill Valley, Calif., told Bloomberg Law in an email.

The online jobs and recruitment website found that 48 percent of job seekers say attractive work perks and benefits would make them more likely to apply for a position. But what keeps people happy in the workplace? Health benefits, vacation leave, and retirement plans hold the top slots of benefits that correlate with highest employee satisfaction, she said.

Still, work cafeterias provide a connecting space where employees can collaborate and take a breather from work.

“It’s clear that companies hold strong intuitions that on-site eateries are beneficial,” Kevin Kniffin, an assistant professor with Cornell University’s Dyson School of Applied Economics and Management SC Johnson College of Business, told Bloomberg Law via email. “For example, when a company allocates an entire floor or two of a tall building to an on-site or workplace eatery, it must be understood as an investment.”

Copycat Bans Unlikely

The battle over on-site cafeterias appears to be “a unique situation” facing a metro area with a higher concentration of companies with on-site cafeterias, coupled with a mid-market neighborhood hoping to be revitalized by the influx of industry in the area, Green-Vamos said.

On-site cafeterias may not be as prevalent outside of the tech, finance, and consulting sectors. The Society for Human Resource Management’s 2018 benefits survey found that 95 percent of organizations provide a break room/kitchenette--up four percentage points since 2014—and 81percent offer free coffee—up five percentage points over the same time period. Organizations offering company-paid snacks and beverages also rose by 12 percentage points over the past five years to 32 percent, SHRM found.

Full-service cafeteria benefits, however, haven’t risen steadily along with these other benefits, according to the survey. Unsubsidized on-site cafeterias were found at only 17 percent of organizations in 2018 and subsidized cafeterias came in even lower at 12 percent.

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