Have work perks become too ‘paternalistic’?

Basecamp CEO Jason Fried believes that workplace benefits are overstepping the mark when it comes to persuading certain behaviours among staff, but his opinion is not shared by everyone

In a controversial update from Basecamp CEO Jason Fried, the company co-founder announced an end to political discussions at work, 360 reviews and “paternalistic” benefits. According to Fried, the perks offered by the US software company, which included a fitness benefit, wellness allowance and farmer’s market share, were essentially telling employees how to lead their lives.

Fried claims that, “by providing funds for certain things, we’re getting too deep into nudging people’s personal, individual choices. So we’ve ended these benefits”. Instead, Basecamp will now give staff the monetary value of the perks they were once offered. 

Workplace culture expert and former Twitter vice-president Bruce Daisley understands why some people would be reluctant to allow their employers to make semi-moral or attitudinal decisions on their behalf. 

He says: “Giving someone a gym membership effectively means you are making a decision for them. I can see how that’s a degree controlling. If your partner bought you gym membership you’d rightfully take some offence at the suggestion being made and why you couldn’t make that decision yourself.”

Employees still value perks

However, Gautam Sahgal, CEO of employee experience platform Perkbox, believes the announcement was surprisingly timed. 

The company conducted research into the state of employer and employee wellbeing during the coronavirus pandemic. They found there is now a “greater appreciation for the meaningful things that money can’t buy, and an even greater intolerance for businesses and brands that have failed to support their staff and customers at a time where greater empathy and humanity is needed”.

Although Sahgal agrees it should not be the role of an employer to “pontificate and lecture its employees on how best to live their lives”, he adds: “Any employer should provide an effective and relevant engagement system that considers the interests, tastes and lifestyles of its workforce to ensure the benefits system offers something for everyone.”

Offering an enticing array of benefits is still an important point of differentiation for employees too. According to Drewberry’s Employee Benefits Survey, which questioned 2,000 workers at UK SMEs, 22.4% said that offering perks helped to attract them to employers when looking for new jobs.

Some of the more in-demand benefits included flexible working hours and private health insurance. And despite Fried’s assumption that employees no longer want paternalistic perks, 51.1% of employees surveyed said they’d like to see their company introduce benefits that help them manage their health and wellbeing.

Emma Parry, human resource management professor at Cranfield School of Management, believes that good employers have an obligation to look after their people in a holistic sense and should empower their employees to make positive life choices in regards to their mental, physical and financial health. “It’s about empowering people to make healthy choices and look after themselves,” she says. “No one is forcing people to take up a gym membership.” 

Choice is key

On one level, perceptions of certain types of benefits have changed. The office-based perks, which were once in high demand, are less desirable for employees who have spent the majority of the past year working from home. 

Where you may have once seen companies offering free food, pool tables and on-site entertainment, employees can now choose from unlimited annual leave, subscriptions to wellness apps and vacation funds. Research from online jobs search platform Glassdoor revealed 57% of employees now felt that office-centric perks were less important to them. 

This means offering employees a broad choice is also important, especially for those working in multi-generational teams. Janine Chamberlin, UK country manager at LinkedIn, says: “Perks offered to parents may not be relevant for the younger people in your organisation. It’s important to be mindful about offering a variety of different benefits.”

Benefits versus financial rewards

Ken Charman, CEO of UFlexReward, takes a different approach. The technology startup, which was spun-out from Unilever, made the decision to stop offering benefits in order to maximise the financial compensation offered to its employees.

The decision was also made in an attempt to be more open and fair about pay, as Charman adds: “Most organisations do not include their benefits in pay gap and pay ratio calculations, which carries a risk that these perks can be used to conceal bias.”

However, there are fears that, when benefits are removed, employees may not see their true value reflected in their salaries. Sahgal says: “Financial incentives and bonus schemes are nice to have and sweeten the deal but there are a myriad of studies which show how little they help in terms of enhancing productivity or stemming attrition.” 

Ultimately, Basecamp’s experiment with the removal of its benefits did not last long. Although Fried warned that “some changes take time to steep, settle in, and get acquainted with”, events quickly spiralled. A company-wide Zoom meeting, aimed at addressing employee concerns about the policy changes — most of which centred around the restriction of political discussions — culminated in a third of Basecamp’s staff resigning

For Saghal, there should have been no reason for Basecap’s range of perks to be considered paternalistic “unless it was communicated in such a way that makes staff feel like it’s mandatory or judgemental”. He adds: “Indeed, if that is a concern, then there are much bigger issues relating to company culture that need to be immediately addressed than the mere implementation or rescinding of a wellness benefit.”