The Unexpected Risk of Your Employee Perks


Cost of employee perksAt Namely, we’re all about being human. To us, that means employees aren’t just a number on a screen or a cog in a wheel. Employees are responsible for an organization’s success, and HR professionals know that creating the right workplace environment will lead to everyone performing at their best. In today’s workplace, that formula includes employee perks.

From snacks to gym memberships to company swag, perks have become table stakes for entry in attracting talent – employees simply expect them. While perks are a fun fixture of many workplaces – especially startups – piling up perks in the early stages of a company without careful planning can lead to a hefty budgeting item as your workforce scales. And that may do more harm than good.

The unexpected cost of employee perks

Take Airbnb, for example. The home renting site offers its employees a $2,000 stipend to travel and stay in any Airbnb around the world. It’s a great perk, and a great investment in employees, but at 3,681 employees according to LinkedIn, that adds up to an investment of over $7 million.

Airbnb is certainly a successful company, and the perk is one that’s important to their culture. But companies need to view these perks as an investment, and be conscious of the returns on each perk. If the employee total comes in around 20 people, they won’t rack up that large of a bill. But once the company starts growing, it’s important to make sure your perk costs don’t skyrocket to an unaffordable point. It’s called perk debt—when the cost of perks becomes too much compared to the engagement it brings out in employees as your workforce grows.  
Communicating change

While your company grows in size, the total cost of employee perks grows with it. Then, you’re left with a few questions. Do you take care of the high price? Do you cut back on the benefits to save money? It’s an important decision that will affect your budget and culture.

People get attached to what they know, so weigh your options very carefully before deciding to change your perks and consider how any action would affect employee engagement and retention. Do a traditional compare and contrast that takes into account the cost to the company and the cost to the employee.

If you decide to cut or alter an offering, employees are sure to miss whatever perk is being eliminated or decreased, but the most important thing is that you communicate the change. Most people won’t harbor any ill-feeling when they understand the reasoning behind a carefully weighed decision.

The right perks

The key to balancing out your perk debt is efficiency. You don’t have to overwhelm your people in extra benefits for them to feel appreciated—and you don’t have to trade an arm and a leg to give them perks that will work. Find the right kind of perks and gone are the days of spending 3/4 of the budget on swag.

A 2015 TechnologyAdvice survey found that 31.8% of employees named flexible schedules or remote work opportunities as their most desired perk. It’s possible to be finance-savvy while giving your employees the appreciation they deserve.

Here at Namely’s New York office, of course we have our game room stocked with Ms. Pacman, Galaga, and Star Trek pinball. Where would we be if it weren’t for our Brooklyn startup roots, anyway? But our flexible time off has always been a Namely staple, which we’ve deemed a worthy investment no matter our company size. Giving employees work flexibility and the time off they need has been core to our care for our people.

Sometimes small perk traditions cause big impact. Every Monday at Namely, the kitchen table is lined with baskets of a variety of bagels, topped off with an assortment of spreads at the end. We call it Bagel Mondays, and it kicks the start of each week off on a positive note. Now, the bagels are in the hundreds and employees love congregating in the kitchen.

Namely has also always had anniversary balloons—a fun tradition our employees love that is worth the investment, no matter our company size. If it’s your one-year anniversary at the company, you get a giant, silver balloon in the shape of a “1” to hang from your desk. Second year, third year? A giant “2” or “3” is coming your way! Come in any day of the week and you’ll see desks scattered with silver balloons—maybe even a rare “4.” That’ll mean a person has been with us since the beginning. Not only do these gestures make everyone feel appreciated, but it’s a small investment that fuels major celebrations. A silver balloon always comes with a day of congratulations.


Perk debt can be avoided with no detriment to your employees. Find out which perks solve their largest needs and remember that employee perks do not a company culture make. Your company’s core values are what will get you the good talent and build a successful organization—the rest is just icing on the cake.  

This is a guest post by Klein Aleardi, editorial intern at Namely. Namely is the all in on HR, payroll, and benefits platform built for today’s employees. And they integrate with Lever! Read about the integration, here