Businesses invest in culture, not perks

WILLIAM MACE
Last updated 05:00 02/12/2012

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It's the early 1990s and the pink champagne is glinting, the shoulder pads are towering and the Jaguars are purring in the Auckland office building of the country's hottest advertising agency, Saatchi & Saatchi.

The work perks that survived the 1980s investment bubble are quickly going out of fashion, but Saatchi's managing director David Walden and creative director Roy Meares are still sporting matching Jaguars.

"Cars used to be the big thing, but then cars got a lot cheaper in New Zealand in the past 20 years so they're not so much of a prize any more," laments Walden, whose current agency TBWA\Whybin has survived the recent downturn in spending on advertising.

But that survival was dependent on "cutting the fat" from the agency's budgets and accounting for each dollar that flowed through the business.

"Long lunches? They've gone, too, mate . . . it's not fashionable now to be seen still having lunch at 4 o'clock. It's not seen as being the thing to do."

So if perking up your ego with symbolic riches from the company trough isn't fashionable, what are employers offering these days and are employees getting what they want?

The current trendsetter in workplace practice appears to be the new cradle of commercial evolution, Silicon Valley.

Staff at internet advertising giant Google's Silicon Valley headquarters get free lunches, free haircuts, a "new parent" bonus on the births of their children, and a payout of 50 per cent of an employee's salary to their family for the 10 years after they die.

Clearly business is good at Google.

Recruitment agents say the average New Zealand-based business cannot afford such extravagance, but whatever their size or budget, employers need to take Google's cultural lead.

"We're seeing two shifts out there at the moment," says recruitment agency Hudson's executive general manager Roman Rogers.

"One is that organisations are pulling back on their employees' behaviours because they're being seen to be taking too much advantage of perks available to them.

"But organisations are also thinking about how they actually create a better workplace culture.

"There is a greying line between a ‘perk' and an investment in creating a culture that attracts and retains people and provides a platform for them to perform and demonstrate discretionary effort."

There's an old saying that a happy worker is a productive worker and a raft of evidence to back that up.

An International Survey Research study of 50 companies employing 664,618 people found that over one year those which scored high on "employee engagement" experienced an increase in operating income, net income growth, earnings per share growth rate and change in total assets. In other words, the company made more bucks when their workers were happy.

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New Zealand and Australia scored in the bottom half of countries surveyed for employee engagement at 66 per cent, in a range of 56 per cent to 82 per cent.

A New Zealand report a few years back by John Robertson Associates cited data showing a 54 per cent return on assets from engaged workers, compared with 21 per cent from ambivalent workers and nine per cent from disengaged workers.

"It is this sense of community that we want to foster as well," says IBM New Zealand's human resources manager John Saunders.

"How do we get discretionary effort from people, why do people come to work, what releases the creative view that they may have? It all comes from that sense of community and I think that's what Google are really trying to create in their own way. So the question is how do we do that when we're not providing the hairdressing service or the three different cafeterias?"

Apart from all the usual medical and life insurance offers, car parks and flexible working arrangements, IBM's approach is more subtle, says Saunders.

Employees are encouraged to join diversity groups - based on gender or sexual persuasion for instance - to ensure they have a voice within the organisation and are able to surmount obstacles in such a large corporation.

"It's not about pay or those overt benefits, but if I'm going to be here for many hours of many days I want it be a place that can let me be me, and a place that I can contribute to and is fun to be within."

With 85 staff, Christchurch software developer and vendor PayGlobal has a little more leeway to foster its own unique culture, especially within its 35-strong application development team.

On their first day in the office every new developer is gifted a Nerf gun - a toy which shoots foam darts - as an induction into the team, says chief technology officer Jan Behrens. "We expect a lot of each other, but we also want to have fun with our work.

"Occasionally one team raids another team and you get this 10-minute blitzkreig where there's Nerf guns going off everywhere.

"When you're working towards a deadline or you've got a problem to solve, at times it's good to break free and do something fun for a couple of minutes."

Such pastimes are often derided as a hangover from the dotcom bubble, where promising young internet companies grew fast and spent working capital on skateboards, bean bags and gaming consoles for the office, before subsequently going broke.

This is different, says Behrens, not just because PayGlobal successfully serves over 400 customers across Australasia and Fiji, with more than half a million people paid through its proprietary software.

It's because the gimmicks are backed up with valuable people-focused investments which are key to attracting and retaining local and international talent.

Behrens holds innovation camps twice a year, in which his teams are challenged to spend two days developing any of their many bright ideas.

The idea is reminiscent of Mark Zuckerberg's Facebook "hackathons" which gave rise to some of the social network's most successful innovations.

Behrens says information technology professionals are particularly appreciative of any time and resources the company is prepared to devote to their professional and personal development.

But the innovation camp idea has spread to the whole PayGlobal organisation, with 85 staff taking up the challenge and enjoying the camaraderie and creativity that comes with it.

"We do it to get a hype and a buzz going and show that everyone has an ability to be innovative outside of what is otherwise directed product development," says Behrens.

"It is a really good way for software companies to keep innovation alive and I don't think there are a lot of companies that actually do it . . . they just have a suggestion box or something like that."

Behrens is in no doubt that the camps, as well as additional opportunities for upskilling and his style of empowering teams to manage their own workflow, is key in attracting and retaining staff, much more than a company car or a Christmas bonus.

But whatever the cultural conditions of a workplace, the ultimate motivating factor in any job is money.

Many people wouldn't even pull on the All Blacks jersey these days without adequate remuneration.

"People are more motivated by money, and by a simple [salary] package, than they are by other add-ons like golf memberships, trips away with family and a flash car," says Mike Davies, managing director of the New Zealand branch of international recruitment company Adecco.

He thinks perks are a thing of the 1980s and 1990s.

"These days the focus is based on a good salary and reasonable bonus structure around performance - in 85 per cent of the cases that would be the focus."

- Sunday Star Times

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