The Dark Side of Work Perks
Company-provided free food and happy hours impose a sinister creep on employees’ personal lives
Every day, companies around the world execute a low-risk, high-return arbitrage: They buy the time and attention of some of the most highly compensated professionals in the world — programmers, product managers, data scientists, quants, investment bankers, and lawyers — for the cost of a plate of pad thai. Given how much wealth is generated by companies that comp or subsidize employees’ food, and given that for each of those companies, getting smart people to work a little longer is a core competency, free food arguably belongs on the list of important technologies that have a visible impact on GDP growth.
I’ve recently started getting lunch with friends who work at big tech companies like Google. From the perspective of the technical employees and managers, a profitable tech company is a socialist paradise, with monopolistic AdWords pricing instead of North Sea oil. You get your badge, walk past the fitness room, the nap room, the meditation room, and the lactation station, then get all the free food you want.
Free lunch, though, is not where the action is: The economics of free food are driven by free dinner. Lunch just amortizes the fixed cost of food prep facilities. Free food, in general, is a great deal for companies:
- It encourages people to work much longer hours. Dinner is a natural reason to go home, and if a good dinner is available back at the office, it can potentially stretch into another couple hours of productivity.
- On-site food encourages cross-pollination between departments and job functions. At a small company, everyone knows what everyone is doing. At a 500-person organization, you have no idea — but if someone on the backend team has tacos with someone from the mobile team, they might realize they’re duplicating efforts, or hatch a new idea for a feature.
It’s striking that tech companies have cafeterias while banks and law firms give employees food delivery allowances. Some of this is doubtless due to the more mercenary nature of these industries — the correlation between equity comp (you do well when the company does well) and bonuses (you do…