Food Fight: Should Firms Cut the Cafeteria?

With half of its staff permanently out of the office, the company figured it would cut back on yoga classes and cafeteria service. After all, employees were two years into taking classes and feeding themselves at home. A memo was circulated announcing the cutbacks; the company figured that this would be the end of it.

Not quite. It wasn’t long before employees began complaining to their managers and on social media.

With return-to-office plans now firmly in place, many companies worldwide are tweaking their on-site offerings—especially on so-called campus headquarters, where everything from meal service to yoga classes to laundry service is common. But distinguishing between the perks workers will miss and those they won’t is a delicate balance that matters greatly during today’s labor shortage. “Things can turn bad if you’re removing an extra that is seen as a positive aspect of the company’s culture,” says Mark Royal, senior director at Korn Ferry Advisory. “Employee engagement can drop, and organizations are cautious in this labor market.”

Cafeterias in particular can be a sensitive issue for workers, who see them as easier and cheaper, as well as convenient for meeting colleagues. According to one survey, one-fourth of all large companies (and an even higher percentage of Silicon Valley tech firms) had a cafeteria. Of course, firms did cut back on cafeterias during the pandemic, but the latest changes have caught some workers off guard. Management may think they’re just removing an underused service, Royal says, but employees experience these cuts as the firm caring less about them.

The urge to cut back services entirely is best resisted, says Brian Bloom, vice president of global benefits at Korn Ferry. He points to the 2008 recession, when some airlines angered customers by abruptly adopting no-frills service. “If you’re not going to make the experience enticing,” he asks, “why even bother?” Firms should think through ways to partially scale back instead, he says, such as reducing meals from every day to a couple of days a week.

Reducing services will go better, Bloom says, if it’s the product of employee-survey data: “We’ve solicited feedback and are responding to some of the things you’re telling us.” “A lot of organizations don’t solicit as much feedback as they might around reward programs,” says Royal. One way to slice and dice the data is to run analyses where employees rate different benefits and perks. The company then assigns a dollar amount to each as a way to quantify the employee value proposition. For example, that free coffee may cost the company $1, but to the employee, it’s worth $18—roughly the value of the time it would take her to walk to the coffee shop on the corner. So while eliminating free coffee would save the company $80,000 a year, it would cost substantially more in terms of the employee value proposition.

Communication and transparency around these changes are pivotal, says Royal, and should include educating employees not just about what’s changing, but why. “It’s not peeling back our investment in people. We’re allocating the resources we do have to benefit the way people are currently working,” he says. Useful phrasing includes: “We’re reallocating benefits to have maximum positive impact on employees” and “We’re adjusting to meet the needs of hybrid employees.”

When perks or benefits are rescinded, try offering a replacement, says Craig Kamins, senior client partner in Korn Ferry’s Healthcare practice. “Is there an alternative version to the benefit?” For example, if all-day coffee is being cut, would gift certificates for home coffee makers help employees feel cared for? “It alters the perception, from ‘They don’t care about me’ to ‘They evaluated logistics, and here’s what they’re doing instead,’” Kamins says. 

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