This is a great point, and I wish some of the executives as my previous employers understood this. For awhile, things seem great. The company has a core product that is showing great growth. That in turn leads to even more ambitious goals. The value from the above allows the company to offer generous perks. Life is good.
Then what happens? The core product begins to plateau. Executives begin to abandon long-term, ambitious projects, in order to squeeze more juice from the lemon to hit quarterly goals. Finally, perks are cut because it's just way too lavish to have free soda when you're only growing profit 33% year over year instead of 100%. As the OP indicated, the employees are no longer left with any stories. You may still enjoy your day to day work, you may still be well compensated in terms of salary. But without that intrinsic motivation, it's only a matter of time before your enthusiasm flags and you're looking for another job that can offer you what you had before.
For company leaders, products plateau and nobody is successful all the time. But goals and perks are under their complete control, and especially for the latter, it usually requires only as nominal amount of money. It can mean all the difference in retaining your talent during bumpy times, or having everyone abandon ship because they feel abandoned already.
I never understood perks. I work where I work because I like the people, the technology, and the product in that order.
The lack of money and success create anxiety, but an abundance of these in terms of what an employee can hope to achieve do not influence my decision about where I work.
As for perks, I don't care about trivial asides that people think up in order to retain talent. This is an artificial device that will not stop the bleeding. Don't waste your time doing this if it's something you have to think up in order to achieve yet another metric. If you're going to do something fun do it because you want to do it because you yourself would enjoy it and know that at least a few of the others on your team would too. But then you're not doing it for retention, you're doing it because you want to.
Bottom line is if the factors don't add up, an employee will leave, but things like people, technology and product are what candidates should consider before they join, and they're not likely to change much over the duration of an employment, so if someone is leaving, they probably didn't know what they were getting themselves into, something big changed, or they think they are really failing.
Or maybe they just found a new thing that interests them, in which case let them go.
Your post reminded me of an article Steve McConnell wrote in 1996 about consulting at Microsoft.
"While Microsoft was still involved with OS/2, the OS/2 development group requested that the company install a washer and dryer in their building so that they wouldn't have to go home to do their laundry. Although the group never got its washer and dryer, the message was clear: this team wanted to work. It didn't ask for promotions, more money, bigger offices, or fancy carpet; it asked for management to remove every conceivable roadblock so that it could concentrate on shipping a product."
Perks are an effective retention strategy only if they enable an already motivated employee to get more work done. And for the employee to be motivated, the work has to be rewarding.
Perks which improve my productivity are things I care about (good computer, ability to get needed books and other resources, functional IT support, fast Internet connection, private office when/if desired, wfh when optimal, comfortable chair, easy commute/parking). For most of those things I'd trade $1 in salary for $0.50 or less allocated to them optimally. Not having to deal with admin stuff like expense or hour tracking is worth $5 in salary for $0.50 in benefit.
Free food, on site gym, nice offices, etc I'd trade at a discount to salary, like$1 in salary for $2-3 in perks.
[Reply to the dead comment; you need to be logged in witht showdead to see it.] Benefits in kind does not refer to work equipment, since those aren't things you get to take with you--the company owns that stuff, you just get to use it. Benefits in kind means something like receiving a personal laptop on company dime that you can take with you even if you leave.
The perks are largely about (1) having something cool to talk about, and (2) feeling respected. Perks aren't the only possible way to achieve these but they're a good indicator.
With my friends I can't talk about the details of the awesome technical projects I'm doing at work-they won't find it interesting. But I can talk about how fun it is that we have tons of autonomy, about 30 different board games in the office that we play at lunch every day, a beanbag chair we can use for naps, and have a foosball table.
Github recently shared some of its secrets on this topic[1]:
"We've gained 100+ employees in two years and we've never had anyone quit. That won't last forever, but I think it's a good indication of the type of company we've built. There are certain things you can do to retain employees, and by worrying about employee happiness you'll ultimately create a much better product."
You know what's great for employee retention without sugar-coating it? Pay your employee's correctly (you can't expect talent for peanuts), don't make them feel like they can't leave at a normal time, treat your employees with respect, offer a clear path of progress in the company (where you are now, where you could be) and one of the most important: innovate and excite.
It turns out, remarkably, that intrinsic motivation is far more powerful that extrinsic motivation. The intrinsic motivation comes primarily from enhancing a sense of self-worth. Good things: employees learning new things (skills and knowledge), employees allowed to self-direct (micro-managers sap morale), employees feeling a sense of challenge (tasks not trivial, but also not impossible and progress being made), employees having a sense of purpose, and employees being recognized for their contributions.
I don't have my source, sadly. It was probably and article in Harvard Business Review.
The "respect" aspect isn't touched on much in these comments. It's shitty when your boss belittles your team in front of guests and makes you feel like you're all his "peons." No perks can fix that kind of disrespect.
I worked at a place like that once, they churned through so many system administrators especially and in the end found themselves in a situation where they were finding it hard to get system administrators and after all of that eventually fired the manager who had single-handedly damaged the company by that stage it was too late. So respect is something I definitely agree a company and its higher-ups should possess.
In my opinion it's a mistake to come up with perks just so you can tell the right story. In his most recent book Clay Christensen describes what makes you love your job better than anything else I've read. He distinguishes between motivators and hygiene factors (mainly citing Frederick Herzberg's research): "Motivation factors include challenging work, recognition, responsibility, and personal growth. Motivation is much less about external prodding or stimulation, and much more about what’s inside of you and inside of your work." On the other hand he lists hygiene factors: "status, compensation, job security, work conditions, company policies, and supervisory practices." (from http://www.fastcompany.com/1836982/clayton-christensen-how-f... and his book). You can pile up perks as much as you want; they just serve as hygiene factors. As long as your motivators are not met, a high retention quote is wishful thinking. HR departments at bigger startups (and bigger perks) know that all too well.
At the end of the day you don't work for the big colorful slide at your office, or Whiskey Fridays, or your favorite 80's arcade video game. Cynically speaking, these are just there to make your long work days a bit sweeter.
So what's left for startups to retain their top employees? It's figuring out what truly motivates them. This takes a lot of hard work, empathy, and will. It's a long term investment. As such it might not pay off in the short term, but it might well give you in return the high retention rate you're looking for.
Absolutely, people have been studying motivation theory for decades. Making up 'stories' might help, but without any supporting evidence or research it seems mostly like pseudo-science to call this the 'Psychology of retention'.
For instance, how many people did he poll? Where did they work? Are they representative of the startup phenomena as a whole? What question was asked and what were their verbatim responses?
"First, the most powerful way to enchant employees is to provide a MAP. “M” stands for mastery -- that is, a way to master new skills on the job. “A” stands for autonomy -- so that employees can master new skills while working autonomously and not be micro-managed. Finally, “P” stands for purpose. Employees love to master new skills in autonomous positions while working towards an organization with a high purpose such as making the world a better place."
What about "teams"? I have come to the conclusion that "team spirit" and so on are also main strategies to make people stick to crappy jobs. Case in point: soldiers - I think being a soldier is probably one of the worst jobs ever (simply because you have a high risk of being killed on the job), yet people stick it out for the sake of their mates. Or mining - doesn't sound very attractive, but apparently actual miners love the companionship.
Personally I have also frequently delayed quitting a job for too long because I didn't want to disappoint my colleagues. In the end I should probably have inspired them to leave, too... (I know, that is just an anecdote, but still).
Most posts have been citations of authorities, or anecdotes WRT to perks and stories.
Could I break the trend and make a simple request instead?
"Make it a gift not a reactive response to bad news".
I've never worked startups or dotcoms so all the perks I've experienced have been in response to low scores on morale surveys and similar situations. Frankly if morale is low due to terminal mismangement the only thing that makes morale worse is "pop corn machine" or "mandatory PR kickoff meeting after hours" or "offsite meeting" or "casino night" or "barbecue lunch day" or "pizza day". Please find out why it sucks and fix it, don't just simply buy a popcorn maker machine and call it good.
"Oh, so the problem is the boss couldn't lead starving wolves to raw meat but he can't be disciplined because he's on his boss's golf team, well I know lets have casual dress monday just this one time, I'm sure that'll make everyone happy and productive"
It gets to the point where if you hear about a team doing a "perk" thing you automatically start wondering how they screwed up or whats wrong.
"That dept is having free pizza day at lunch today" "Oh no, that's terrible, I thought they were doing OK, whats wrong?"
Readit News
Then what happens? The core product begins to plateau. Executives begin to abandon long-term, ambitious projects, in order to squeeze more juice from the lemon to hit quarterly goals. Finally, perks are cut because it's just way too lavish to have free soda when you're only growing profit 33% year over year instead of 100%. As the OP indicated, the employees are no longer left with any stories. You may still enjoy your day to day work, you may still be well compensated in terms of salary. But without that intrinsic motivation, it's only a matter of time before your enthusiasm flags and you're looking for another job that can offer you what you had before.
For company leaders, products plateau and nobody is successful all the time. But goals and perks are under their complete control, and especially for the latter, it usually requires only as nominal amount of money. It can mean all the difference in retaining your talent during bumpy times, or having everyone abandon ship because they feel abandoned already.
The lack of money and success create anxiety, but an abundance of these in terms of what an employee can hope to achieve do not influence my decision about where I work.
As for perks, I don't care about trivial asides that people think up in order to retain talent. This is an artificial device that will not stop the bleeding. Don't waste your time doing this if it's something you have to think up in order to achieve yet another metric. If you're going to do something fun do it because you want to do it because you yourself would enjoy it and know that at least a few of the others on your team would too. But then you're not doing it for retention, you're doing it because you want to.
Bottom line is if the factors don't add up, an employee will leave, but things like people, technology and product are what candidates should consider before they join, and they're not likely to change much over the duration of an employment, so if someone is leaving, they probably didn't know what they were getting themselves into, something big changed, or they think they are really failing.
Or maybe they just found a new thing that interests them, in which case let them go.
"While Microsoft was still involved with OS/2, the OS/2 development group requested that the company install a washer and dryer in their building so that they wouldn't have to go home to do their laundry. Although the group never got its washer and dryer, the message was clear: this team wanted to work. It didn't ask for promotions, more money, bigger offices, or fancy carpet; it asked for management to remove every conceivable roadblock so that it could concentrate on shipping a product."
Source: http://www.stevemcconnell.com/articles/art05.htm
Perks are an effective retention strategy only if they enable an already motivated employee to get more work done. And for the employee to be motivated, the work has to be rewarding.
Free food, on site gym, nice offices, etc I'd trade at a discount to salary, like$1 in salary for $2-3 in perks.
Dead Comment
I also hope that a good PC with good monitors and a decent desk and chair should not be considered part of the perks.
With my friends I can't talk about the details of the awesome technical projects I'm doing at work-they won't find it interesting. But I can talk about how fun it is that we have tons of autonomy, about 30 different board games in the office that we play at lunch every day, a beanbag chair we can use for naps, and have a foosball table.
"We've gained 100+ employees in two years and we've never had anyone quit. That won't last forever, but I think it's a good indication of the type of company we've built. There are certain things you can do to retain employees, and by worrying about employee happiness you'll ultimately create a much better product."
[1] http://zachholman.com/talk/how-to-build-a-github
I don't have my source, sadly. It was probably and article in Harvard Business Review.
At the end of the day you don't work for the big colorful slide at your office, or Whiskey Fridays, or your favorite 80's arcade video game. Cynically speaking, these are just there to make your long work days a bit sweeter.
So what's left for startups to retain their top employees? It's figuring out what truly motivates them. This takes a lot of hard work, empathy, and will. It's a long term investment. As such it might not pay off in the short term, but it might well give you in return the high retention rate you're looking for.
For instance, how many people did he poll? Where did they work? Are they representative of the startup phenomena as a whole? What question was asked and what were their verbatim responses?
"First, the most powerful way to enchant employees is to provide a MAP. “M” stands for mastery -- that is, a way to master new skills on the job. “A” stands for autonomy -- so that employees can master new skills while working autonomously and not be micro-managed. Finally, “P” stands for purpose. Employees love to master new skills in autonomous positions while working towards an organization with a high purpose such as making the world a better place."
[1] Also a book http://www.amazon.com/Drive-Surprising-Truth-About-Motivates...
Could I break the trend and make a simple request instead?
"Make it a gift not a reactive response to bad news".
I've never worked startups or dotcoms so all the perks I've experienced have been in response to low scores on morale surveys and similar situations. Frankly if morale is low due to terminal mismangement the only thing that makes morale worse is "pop corn machine" or "mandatory PR kickoff meeting after hours" or "offsite meeting" or "casino night" or "barbecue lunch day" or "pizza day". Please find out why it sucks and fix it, don't just simply buy a popcorn maker machine and call it good.
"Oh, so the problem is the boss couldn't lead starving wolves to raw meat but he can't be disciplined because he's on his boss's golf team, well I know lets have casual dress monday just this one time, I'm sure that'll make everyone happy and productive"
It gets to the point where if you hear about a team doing a "perk" thing you automatically start wondering how they screwed up or whats wrong.
"That dept is having free pizza day at lunch today" "Oh no, that's terrible, I thought they were doing OK, whats wrong?"