Friday, December 10, 2010

Providing lunch for employees

One of the many things I loved about working for Google was the free lunch and snacks they provided employees. The Mountain View office in the US was particularly good with around 15 different cafes offering a whole range of great food, all free for employees. Despite not having the 1000's of employees to justify so much choice, the food in the cafe in the Sydney office is also very good.

The photo above is of one of the many great meals I had at Google:
  • Sweet potato sausage soup with heirloom potato chips (shown at the top)
  • Vegetable medley - steamed spring vegetables, seasonings tossed in Californian extra virgin olive oil
  • Pan roasted duck breast with duck-red wine reduction (on the right)
  • Grilled salmon with citrus tarragon vinaigrette
  • Tossed salad with blue vein cheese.

Providing free snacks and lunch for employees provides a business with a whole range of benefits including:

  • Creating a more social and friendly culture within the organisation. Meals are a social time, why not encourage employees to eat and socialise together rather than force everyone to leave the office to find their own food, or prepare their own individual meals?

  • More productive connections within the organisation. Conversations over lunch will no doubt include discussions around work. These discussions are more informal than meetings and generally more creative and can lead to positive outcomes for the organisation. It can also encourage people within an organisation who might not normally have a formal reason to meet, to have a discussion. I worked in sales at Google and I often had conversations with software engineers over lunch which gave me new insights into the organisation that I wouldn't have gained otherwise, some of which I could apply to my work.

  • Higher productivity. What a waste of time to have all your employees each spending 15 minutes in the morning preparing their own lunch or each standing in lines at take away food places to buy their own lunch. Why not save them this time by providing lunch, they'll no doubt be working for you for at least some of this additional time they save.

  • Employee retention. Even if the 15 minutes they would have spent preparing their own lunch in the morning is spent sleeping in instead of additional work for your organisation, what a great reward that is for working for your company. They're going to be less likely to leave your organisation and you'll have more people applying for jobs at your organisation.

And as I recently found out, providing snacks and lunch is also tax effective. Apparently providing employees with snacks and lunch in the office, as long as it's not extravagant (eg. doesn't include alcohol) isn't subject to fringe benefits tax, the GST input tax credits can be claimed, and the costs deducted against the company's tax like most other expenses.

All of that said, it's not a cheap exercise. Let's say a business spends $20 per day per employee on food. There are about 230 work days in a year so that's $4600 per employee. Depending on the average salaries in a business that's likely to be around a 3-10% increase in wage costs. In my experience at Google I think the business received more than that in benefits.

We're outgrowing our space at The Campaign Palace and plan to find a new office in the new year. While it's going to depend on the business's cash flow, once we move we think providing lunch and snacks will be well worth the cost.

Has anyone else had experience working in an organisation that provided free snacks and lunch for employees and if so, what are your thoughts on it? Given not many businesses do this there must be plenty of people who think the costs outweigh the benefits so I'd love to hear people's thoughts on this too.


  1. Hi Michael, I have always provided lunch and snacks for my employees and in the current business I contract to, they provide food too. Being a home based business this works best as it means that people don't have to jump in their car to go out.

    Currently there are up to 7 people working daily and our communal lunches (usually with produce from the veggie patch) are an excellent way to stop staring at a screen and sit down together. This is where we have the strategic discussions and share challenges. It isn't a formalised process but where the conversation normally goes. Clients and people from our interstate offices are always amazed and a little envious - little do they realise that doing it this way means people only have about 30 mins for lunch - no other breaks AND are essentially working though lunch!

    Another perspective is my mentor's office in New York. There he orders in lunch everyday for staff, rotating the different cafe menus. The deal is, eat the lunch provided at your desk and leave work 30 mins early or go out to have lunch and work the normal day.

    Thanks for a great blog Michael, have been following from early on and don't miss a post!

    Regards, Ruth

  2. Great perspectives, thanks Ruth! Love your first post on thegivingguide too, what a great story and starting point for your brand.

  3. I work for a large private hospital in the IT department and they provide us a fruit basket refreshed weekly. It is a great idea and works well, except all the bananas go on the first day and by the last day there is a few scrawny apples left :) I think fruit is a good snack to offer as it promotes a healthy workforce.

  4. Nice Nootn, I like the fruit basket idea.