How to Fuel Happy Employees, High Performance with a Corporate Food Service Subsidy

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Photo of employees having a business meeting lunch

Companies like Google and Apple may be as known for their generous corporate food service subsidies as they are for their game-changing contributions to life and work.

With many industries facing skilled talent shortages, companies would be wise to learn from what the Googles and Apples of the world have long understood: Offering tasteful, high quality food at reduced prices — or even free of charge — is a successful, cost-effective way to motivate, retain and recruit employees.

Perks Matter

A recent Glassdoor survey shows that today’s employees value perks over higher salaries — with 89% of millennials (the generation born roughly between 1980 and 1995) and 70% of workers 45 to 54 saying they prefer more benefits and perks to a pay raise.

What kinds of perks matter most to employees? In addition to health insurance and paid time off, high on the list of most-valuable-perks are benefits that support work-life integration. In simple terms, this means perks that allow employees to be their authentic selves at work; in other words, make the office an enjoyable place to be.

That’s where subsidized food service comes in.

Corporate Food Subsidies Stoke Satisfaction

Photo of subsidized corporate dining meal

Full-time employees are apt to spend more time at the office than they do anywhere else than home; and eat one or more meals plus snacks during business hours.

Thanks to the growth of a more educated foodie culture, employees are also pickier about what they eat during the work day and will go out of their way to find food that aligns with their values, tastes and dietary preferences.

It’s no surprise then that more than half (59%) of employees surveyed by corporate food ordering service seamless.com, said they’d feel more valued if their employer provided more food perks at work. The percentage jumps to over 67% among millennials. An estimated 40 million strong in the workforce, millennials even factor food perks into their choice of employer, with 36% saying it influences their decision to accept a job offer.

Food Perks Fuel Better Business Performance

Incorporating food perks in strategies to maximize employee morale, loyalty and recruitment may also be a main ingredient for improving workforce productivity, and by extension, company performance.

Companies with food programs were shown in a study by management consultancy, Towers Watson, to save employees between 30 and 60 minutes a day by eliminating the need to take long lunches out of the office.

This is valuable time better spent sharing a meal with colleagues in the company café. Employees agree, with almost half (48%) of respondents to the seamless.com survey saying sharing meals with colleagues helps build better working relationships and over half (51%) saying they’d eat with colleagues if their employer provided the opportunity.

Companies that encourage these sorts of encounters between employees have much to gain, with evidence suggesting they help spark collaboration and innovation.

“Some of the best decisions and insights come from hallway and cafeteria discussions,” according to a corporate human resources chief cited in the Harvard Business Review.

Deep Pockets Not Necessary

Fortunately, you don’t need the wallet of a Google or Apple to benefit from food service subsidies. Companies that provide all food and beverages completely free of charge are in the minority.

Most corporate food service subsidies are budget driven, using smart product pricing to offset the expense of the subsidy. Some companies with budget-based subsidized food service operations will offer a combination of complimentary (free coffee and beverages, for example) and competitively priced food items.

The secret sauce is setting the right price points, with companies finding that employees won’t pay in the corporate dining room what they’ll pony up for a meal of the same quality at a restaurant.

At the Lynn, Massachusetts location of Eastern Bank; for instance, coffee and hot chocolate is free and lunches cost 20-30% less than a comparable meal at Panera. A Café Services customer, the bank’s food service budget makes up a nominal 3% of the location’s total occupancy expense. Employee food allowances account for just 20% of dining costs.

Thomas Dunn, Eastern Bank Senior Vice President and Director of General Services, says food perks keep employees happy by helping them maximize break time. “As an operations center, we employ a lot of workers that get only 30 minutes for lunch and are price sensitive. Subsidized food service is an amenity they appreciate.”

Sales Drives Corporate Food Service Subsidy Decisions

Companies looking to benefit from food perks may be tempted to err too far on the side of generosity and offer unsustainable employee food allowances.

Other companies looking for places to trim budget fat may go too far in the other direction and introduce sudden price hikes that leave a sour taste with employees. Both approaches are bad business.

At Café Services, we recommend setting and managing food and beverage prices that enable clients to meet their revenue and food service program goals — from offering a wider variety of healthy food choices to buying local to bringing corporate catering in-house.

In one case, we helped a customer reduce corporate food service subsidies by 65% with better food quality and higher service levels — without question, the two most important factors that influence sales.

Focusing on food and service quality is consistent with our overall approach to driving sales, which centers on maximizing participation in the corporate café. At Café Services, we’re constantly soliciting input from diners and customers to identify what works and areas for improvement. We use this feedback to develop new programs and offerings aimed at keeping participation levels high.

Depending on location and the corporate culture, this may involve introducing new ethnic cuisines, offering more seasonal specials, expanding healthy food choices or bringing value-added conveniences to the café such as farmer’s markets and specialty food kiosks.

On a regular basis, we sit down with our clients to review how menus, pricing and the costs of goods and services impact their corporate food service subsidy. Raising prices gradually and in small increments on best-selling items is an effective strategy for offsetting costs in ways that are palatable to diners.

At the end of the day, it’s all about offering a food service perk that keeps employees happy and fuels positive business outcomes.