It's not just comfort, it's signalling. A company with a laid back culture, open kitchens, free food, a nice expensive architect-designed office is signalling that it is prosperous ("we don't cut costs here, we don't need to"). A company getting less prosperous is also about to get less promotions, less bonuses, and maybe some layoffs.

If you are 10 years old and you see your dad replacing his BMW by a beaten up Toyota, yes, he could just have decided to stop taking on so much credit, but chances are you'll think he's not doing well, even if he reassures you it's for perfectly valid reasons. So you mentally brace for giving up on that new bike you wanted for Christmas.

"They've cut the kitchens."

"Really? We just got an extra Jura coffee machine in every conference room..."

"Interesting, sounds like your cash flow is good at the moment. Are you guys looking?"

And the earlier you leave, the less affected you are - you benefit from the still strong brand, you get decent garden leave, you have little competition on the job openings and your former colleagues will be nice to you in case they need a hand out of the sinking ship later.

Absolutely true in my experience. What employees want, even more than additional money, is a lower mental load dealing with the everyday necessities of life, which an employer is perfectly placed to provide, since employees spend 40+ hours a week in the office.

A more cynical benefit of sodas/snacks/exercise classes/laundry/dogwalking/social events provided by the company is that it makes leaving a lot less appealing. A competitor can easily offer a higher salary, but when departing means completely restructuring an employee's daily routine, it can be a powerful force keeping people in place.

> those people can work literally anywhere and if they can do what they want to do anywhere else, they will leave.

I often wonder if the management team knows this. The people who are really good are also often:

1) more expensive

2) less likely to tolerate bullshit

3) will not be as submissive and willing to follow orders from the new managers

Since more bullshit is coming down the pipeline and orders from new managers will have to be followed closely, they do something like this, know exactly what effect it will have.

It is a variation of "we are not laying you off, just moving you to the basement". No company wants to be known for laying of the creator of language X, or famous technology Y. But if it seems they move on from their free accord then the company saves face.

However, I think I would prefer a higher paycheck every pay period instead of free lunch or soda and so on. What I don't have faith in is that the money saved from free stuff there will directly go to my paycheck.

For example, one way to fix the problem, at least for current empployees is to immediately give raises according to how much it was perceived it was costing the company in free soda or lunches, but that just doesn't happen I guess.

The amazing thing I've noticed is that employees of many startups have no problem paying a "startup tax" wherein they pay n times the current going rate for x service so long as the service is provided by their company, and the cost is deducted from their pay (+ some inevitably worthless stock options).

In other words, pay some employees below market rate, add in worthless stock options, and so long as you keep the "free" soda and dry cleaning cleaning coming (at a 2-4x cost over what they'd pay for themselves) coming, they're fine. Even if the fee they're paying is far more expensive than just going out to get those services themselves.

Once that ends, growth hacking ends and everybody gets burned.

  But the really good people, the people who constantly invent new things and have the skills to communicate their ideas and get them implemented, those people can work literally anywhere and if they can do what they want to do anywhere else, they will leave. So this "tax" of free soda and snacks is just a cost of doing business. And if you look at the revenue per employee, you do yourself no favor trying to maximize that number beyond the value that meets your net income numbers.

Do you have any proof for this paragraph? :-)

I mean, demonstrate that there are 'really good people who constantly invent new things' that are in some way better than other people.

I accept that it's convention (or touch stone) amongst SV participants and developers on HN. And we all like to believe we're especially talented. But, then if this is true it must also be true for CEO's right, there are some that are 10x more talented and therefore they should get Y more salary etc.

I agree with your underlying point "it's a cost of doing business", but not with your reasoning - to me the reasoning is that it's the social signaling for the industry: if everyone else gave away free shoes then company X hiring people has to do the same or be so 'different' in some way that it can go against the grain. As you say everyone totes up the benefits/draw-backs of their work place, team and tasks to decide if a role is good for them - I think that's quite a messy process and more than simply to do with whether there's free soda!

  >And if you look at the revenue per employee, you do yourself no favor trying to maximize that number beyond the value that meets your net income numbers.

The challenge here is that's exactly how FD's are incentivised (in the UK at least). It's often a case that their bonus will be defined as a percentage associated with cost saving or margin: it's effective as it gets one department in the business focused on whether costs are delivering real value, the downside is the one this article is talking about "knowing the cost of everything and the value of nothing".

I have been thinking about the proof question. I've been around enough, and in enough companies, to feel the truth of it is self-evident but the engineer in me is always looking for ways to develop objective measurements.

So evaluating folks is one of the things we end up doing as managers (often annually) and I look for people who have contributed to projects and those who have both contributed and started new projects. People who suggest new projects are often (but not always) less fearful about "rocking the boat" in the sense that every new project suggestion is potentially a judgement against an existing project. It is primarily their mental attitude that lets them operate freely, and in doing so I have experienced people who contribute more by inventing new things can communicating that to their peers. My hypothesis is that this lack of fear is the same thing that moves them to leave when the environment becomes less hospitable, they don't internalize that perhaps leaving may not include arriving anywhere else. For folks who are afraid they won't be able to find work again, they are unwilling to leave simply because the working conditions have gotten less comfortable.

I feel I understand the mechanics that underlies the basic assumption but I don't have a good way to prove it.

The macro question of how to (a) consistently support a high performance creative environment, and (b) objectively measure the performance of knowledge workers [0] must be the most significant challenge for leaders at all levels!

On performance measurement I agree - over time all managers build a nose for it with some heuristics - if it quacks like a duck, walks like a duck etc etc.

I suspect that with high performers "class is permanent, form is temporary" and this is why the challenge is how to create (hard) and then maintain (harder?) a creative culture. Personally, I increasingly put more focus on the way the individual interacts with the environment (and how the environment is configured for them) for enabling high performance.

What I get from your comment is that you're looking for people who are willing to be creative and challenge existing solutions which I agree are two hallmarks of challenger environments. I feel this is correct, but also have no proof.

I find the 'free X' stuff trivial (and possibly a signal of entitlement) but the underlying point is that touching anything that could negatively impact the creative culture should be done carefully and after a lot of thought. People always react with more anger to a minor thing being removed, than a major thing being added.

Ultimately, if 'free stuff' is a signal of an environment that values developers contributions less then there can be no surprise if developers leave when the environment becomes less focused on enabling them. I think the point you're getting at is that if the environment is less inclusive of inventing new things/trying new things then a person whose driven to try new things will inevitably move on to the next challenge. Again, I do sort of agree but have no proof - I probably feel that people tend to be more sticky due to human loyalty etc.

Moving on a bit from what you actually said ... I was picking at something I thought you implied which was the existence of the "10x performer" and them being able to pick and choose. This is something, I'm really cautious about. I feel like the narrative of the 10x risks becoming a really negative one where we're saying "there are rock stars that are 10x better who can pick and choose and float to whatever the best environment is". Even if this is true due to PR, I don't think this is objective reality. I see good people, and even great people, but team performance is far more valuable to me than individual performance and it's factors are complex. Even for personal performance individuals do wax and wane depending on the project/culture/situation and the idea of an order of magnitude of better performance(!) - I've yet to see it on a consistent basis ... except for me of course!

[0] This forum is highly focused on developers, but I see the same pattern across multiple groups, from UX/Design out to Finance/HR. We depend on individual and team contribution, but at best find some 'objective' measures for individual contribution and wholly flawed subjective ratings (ie likeability ratings) for team contribution.