Orginally reported in HRD on 8th May 2023.

One in four Kiwis are saying that some of their benefits had been cut in the last six months - as New Zealand sees signs of a phenomenon that has been dubbed as a "perk-cession."

Frog Recruitment's survey found that some employers have withdrawn offers of complimentary coffee and fruit, as well as reduced the availability of gym memberships. In Auckland, Frog Recruitment said a clothing and homeware retailer there recently earned the ire of its staff after it stopped offering free coffee and fruit.

This isn't an isolated case in New Zealand, as there have been reports emerging across the world of employers pulling back several benefits they offered in the past.

The Manhattan "campus" of Facebook's parent company Meta reportedly ditched its free laundry and dry-cleaning perks to staff, according to The Guardian. Google also recently withdrew perks, such as free food, spa treatments, and nap pods, that were originally offered to office employees.

Shannon Barlow, managing director at Frog Recruitment, attributed the situation to the current economic landscape.

"For most businesses operating in this current difficult economic environment and in the face of a looming recession, perks are on the chopping block," Barlow said in a media release.

Be 'mindful' in removing common perks.

Perks have grown in popularity over the past months as employers utilise them in luring employees back to the workplace.

However, employers should also be careful in scrapping these benefits, according to Barlow.

"Employers should be mindful of removing common perks that they've already rewarded to employees. It can send a message to your workforce that they've underperformed, which can trickle down to decreasing morale," she said. "Taking away perks like coffee may not actually make much of a difference to the bottom line, but I'm willing to bet workforce lethargy and productivity will be down by mid-morning."

On top of morale and productivity, removing perks can also impact employee retention, as they are critical in cases where salary raises are out of the table.

"Removing valuable benefits can convey that the business is in trouble, and the organisation is at a higher risk of a competitor swooping in to offer your best talent the rewards they are missing in your workplace," Barlow added.

What can employers do?

Barlow suggested offering "simple, shared workplace perks" that have lesser monetary value, which can help people feel rewarded. However, she also cautioned that employees' demands are changing, especially amid rising costs of living.

"Employees' needs have also evolved post-COVID and a free apple or croissant may not cut it," Barlow warned. "They're looking for more value-based benefits such as subsidised transport or childcare costs, health insurance, flexible hours, and the option of hybrid working arrangements."

Transparency is also encouraged, according to Barlow. Employers should inform their teams that they plan to tighten purse strings and ask what perks they could continue without.

"Asking employees how they would prioritise the company's spend on perks will return more bang from their benefit buck," the managing director said.

Those who offer their benefits that focus on employees' wellbeing and career development will see long-term returns, according to Barlow, as they benefit an employees' work-life balance, reduce burnout, and improve efficiencies.

"In tough times, employers can't afford to jeopardise business continuity. Rethink the perks and be conservative with pay increases but keep your people happy and don't U-turn on the wellbeing benefits. Ultimately, maintaining a productive workforce through a recession will be the real 'benefit' for everyone," she said.