[Real Beat] Is the Company's 'Free Meal' Welfare or Not? [Office Shift] (18)

Companies Say "Increase Employee Office Satisfaction" Mission
Cost-Cutting Moves Also Seen in Silicon Valley

Editor's Note[Jjinbit] is a shortened form of 'Jung Hyunjin's Business Trend' and 'Real Business Trend,' a segment that showcases trends in the changing nature of work. The segment within Jjinbit called 'Office Shift' carefully examines the changes in offices triggered by the COVID-19 pandemic and aims to lay the groundwork for finding answers to new work styles through experiments we have experienced together. It comes to you every Saturday and Sunday morning. After 40 installments, it will also be available as a book.

'Free Meal' is a symbol of employee welfare in Silicon Valley companies in the United States. It was created by tech companies in the late 2000s to attract top talent. At that time, remote work was not yet widespread, so making the time spent in the office enjoyable was important. The cafeteria was like an 'in-house oasis' where employees could meet colleagues, chat, and take breaks.

Google and Facebook provided 24-hour catering. Food was literally abundant. Twitter offered free breakfast and dinner every day and had snack bars on every floor. Silicon Valley companies hired Michelin-star chefs to provide top-quality meals to employees or installed beer machines so employees could enjoy free meals and drinks with colleagues in the evening. Silicon Valley cafeterias were 'free gourmet spots.' Employees had no need to leave the office building and handled all their tasks inside.

[Image source=EPA Yonhap News]

◆ Free Meals in Pangyo... "Increase Employee Satisfaction with the Office"

These days, cafeterias in companies located in Pangyo, known as the 'Silicon Valley of Korea,' are bustling. This is because an environment where employees can enjoy free, high-quality, and hearty meals has been established. Domestic IT companies are expanding cafeterias and improving food quality to create an office environment that employees look forward to coming to. The strategy is to let employees, who became accustomed to remote work during the COVID-19 period, fully enjoy the daily pleasure of lunch as they return to the office starting last year.

Previously, only lunch was provided for free, but now companies have expanded benefits to cover breakfast and dinner as well. As a result, some employees even take dinner from the cafeteria to go, and some are considering moving closer to the company.

Game company Neowiz has been providing all three meals free of charge since this year. Nexon also offers free lunch, and free meals are available during overtime work. NCSoft has expanded its cafeteria, which was downsized during the COVID-19 period, and added salad bowls and vegan menu options to increase choices. Some IT companies, including Naver and Kakao, are sincerely committed to their employees' meals by offering hearty meals at affordable prices or providing meal allowances.

"A company with a cafeteria is the best welfare in itself." This comment was posted on Blind, an anonymous app for office workers. With soaring living costs, it is burdensome to afford meal expenses easily exceeding 10,000 won, and choosing a menu daily is not easy, so having a cafeteria is regarded as a significant welfare benefit.

◆ It Was Similar Last Year... Silicon Valley Has Changed in One Year

The strategy to increase employee satisfaction by offering free meals to bring them back to the office was first adopted last year by big tech companies in Silicon Valley, ahead of domestic IT companies. They not only resumed free meals but also restarted iconic welfare services of Silicon Valley and held events welcoming employees returning to the office by inviting singers. The goal was to make employees enjoy and have fun at work after returning to the office.

However, the situation has changed significantly in one year. It is now a difficult time for Silicon Valley companies that used to provide free meals. As concerns about an economic downturn grow and profitability worsens, companies have no choice but to implement large-scale cost-cutting measures. With thousands of employees being laid off, they cannot offer welfare benefits as before. They have started to cut back even on the free food they used to provide.

Google exemplifies this change. When it began returning to the office in April last year, it declared that it would reduce remote work and restore welfare benefits that had been suspended during the COVID-19 period along with the office return. It provided free breakfast and lunch and allowed access to various amenities such as massage services and fitness centers. It tried to persuade employees who preferred remote work by creating an enjoyable work environment in the office.

However, Google recently announced welfare reductions just one year later. This was a cost-cutting measure. According to CNBC and other media, Google's Chief Financial Officer (CFO) Ruth Porat explained at the end of last month that the existing welfare system was designed for a five-day workweek, so cafes would be closed on Mondays and Fridays, and some underutilized facilities might be shut down. She said, "Now that most people come to the office three days a week, supply and demand are mismatched. We baked too many muffins on Mondays." She also mentioned that some facilities with low utilization due to the three-day office work schedule might be closed.

This seems to indicate an intention to reduce costs as much as possible by utilizing hybrid work that combines remote and office work. The Wall Street Journal (WSJ) recently reported this trend of drastically cutting welfare benefits by coining the term 'Perkcession,' combining 'perk' and 'recession.'

◆ Of Course It's Nice... But Does It Really Bring Employees to the Office?

Can free meals not only increase employee satisfaction but also serve as a factor to bring employees back to the office? Many companies at home and abroad have faced friction with employees while transitioning from remote to hybrid work, essentially questioning whether they can get employees to come to the office just to eat. There is no clear answer. Of course, from the employees' perspective, if high-quality and plentiful free food is provided, satisfaction with the company increases. But coming to the office just to eat free meals is another matter.

Consider a tweet posted by Elon Musk, CEO, less than a month after acquiring Twitter in November last year. He said, "Twitter spends $13 million annually on meal services at its San Francisco headquarters. The office attendance rate was at most 25%, and on average below 10%," and declared he would eliminate this. Musk emphasized, "There are more people preparing breakfast than eating it," and "We lost over $400 per lunch due to free meals."

[Image source=Reuters Yonhap News]

Shortly after, Tracy Hawkins, former Vice President responsible for real estate and workplace innovation at Twitter, who managed free meals, refuted this as a 'lie,' stating that meal costs were $20?25 per person and office attendance was between 20% and 50%. However, this still implies that even at its peak, Twitter's office attendance was only about half.

A man in his 30s working at a game company in Pangyo said, "Honestly, I come to the office because I have to, and I come reluctantly. I just like it if the cafeteria food tastes good," adding, "I don't come to the office just to eat." On the other hand, another employee working at an IT company said, "My home and office are not far apart, and there aren't many people, so I go to the office, work, and eat there."

Opinions are divided in the U.S. as well. According to a survey conducted in September last year by Sharebite, a U.S. workplace cafeteria management platform startup, among 500 American office workers, one in three said they came to the office more often to enjoy free meal benefits. Sixty-one percent of respondents said they would move to another company if free food was not provided, emphasizing the importance of free meals.

However, according to the Harvard Business Review (HBR), citing a 2017 survey by U.S. marketing firm Fractl of 2,000 American office workers aged 18 to 81, free snacks or free coffee were not considered important welfare benefits. Only about 30% of respondents regarded free food as important. Instead, 80% of respondents considered 'remote work options,' included as a welfare benefit in the survey, as an important factor.