When it comes to building a successful business, many companies, digital and otherwise, look to Silicon Valley for cues. And why shouldn't they? The region has been a source of incredible innovation for decades and in the past has produced some of the most successful companies in the world in recent years.

But what has worked in Silicon Valley isn't guaranteed to work outside of Silicon Valley, and when it comes to employee benefits and perks, companies should think carefully about what Silicon Valley innovations they adopt.

Here are six popular benefits and perks that have been popularized thanks to companies in the region that may not be a fit for your business.

1. Stock options

Ownership can be a powerful employee retention tool, and ownership in the form of stock options has become a standard part of compensation packages at tech startups in Silicon Valley and major markets.

But think twice before assuming that stock options are always a good thing. With them comes the assumption that they'll one day be worth something, and even when they are, employees are likely to be disappointed at what they're worth, often because they don't know the number of shares and options that have been issued. To boot, dilution is also almost always opaque to rank-and-file employees.

On the flip side, stock options can be a double-edged sword even when they are worth something. Early employees able to cash out with a small fortune may be harder to retain after a liquidity event, and employees left behind are sometimes divided into two social classes -- the haves and the have-nots. 

2. Free food

Catered lunches and dinners are a popular perk at many startups, and it's not hard to see why: feeding oneself on a daily basis can be a surprisingly time-consuming and expensive activity. Having delicious, professionally prepared meals can therefore represent a seemingly sweet deal for employees.

But beware: not every employee will find free food to be a tasty proposition. For many, meals offer personal time to relax and get away from work, but they can instead become complicated affairs when employees who bring their own lunches or wish to leave the office for a bite to eat are put in a position where they feel they might stand out if they choose not to dine with their colleagues.

3. On-site recreation

Think 'startup' and chances are that a foosball table or vintage arcade game will pop into your mind. The .com boom may be more than a decade gone, but some of the recreational perks that became common during that time remain and are increasingly visible at many startups today.

For companies staffed by twenty-something developers who live and breathe startup life and think nothing of coding through the night to ship a new feature, on-site recreation may be a no-brainer. But if your company is slightly more diverse, adding a video game console or pool table to the office may not be the greatest idea. While there's nothing wrong with striving to make work a little more fun, more experienced workers may see a hefty dose of recreational implements for what they often are: a reflection that employees are expected to live at the office.

4. Time for side projects

Many startups allow employees to devote some of their time to projects of their own choosing. Google's 20% policy, for instance, has been widely-publicized, praised and emulated.

But while allowing employees to indulge in a project of their own does have the potential to provide tangible and intangible benefits to the company, it's not without its perils. Providing time for side projects, for instance, can become a source of tension in practice as busier employees may feel they don't get to take advantage of it. And, assuming your company is not engineering-heavy, for instance, a good number of employees may see little ability to engage in meaningful projects.

5. Telecommuting

Studies have shown that telecommuters are often more productive than their on-site counterparts, but that doesn't mean that telecommuting isn't without its challenges.

While certain kinds of employees, such as developers, can often work effectively in an independent fashion, there are many kinds of employees that reasonably need to be on-site. And even though telecommuting has its benefits for all parties, the benefits of having your best and brightest in the same room shouldn't be discounted either.

6. Extreme schedule flexibility

More and more companies are coming to appreciate the fact that employees can be incredibly productive without much of the structure that is a corporate institution. At some startups, flexibility is almost unlimited: employees can effectively work when they please, nine-to-five be darned. At others, employees can, on paper, take as much vacation as they'd like so long as the work gets done.

A willingness to be flexible is generally good, and in many cases, companies increasingly have to be flexible to compete for talented workers, particularly those who have families. But policies on the 'anything goes' end of the spectrum should be looked at with some skepticism. After all, employees typically have to collaborate with their colleagues to get work done and when employees are effectively working in their own time zone, getting that work done can become very, very difficult.

7. Help at home

In Silicon Valley, the hunt for engineering talent resembles an arms race, so it's no surprise that companies are upping the ante with eyeball-popping perks. Software company Evernote, for instance, gives employees housecleaning service twice a month and according to Evernote CEO Phil Libin, it's the perk "that people love the most."

It's not hard to see why, but such evtravagant perks should be approached with caution. For one, skeptics would argue that employees are really paying for these in some form or another, but even if a company offering such perks pays market or above-market wages and is highly-profitable, extending the company's reach into employees' homes and personal lives, while a theoretically potent retention tool, isn't necessarily a healthy thing long-term.

Patricio Robles

Published 13 November, 2012 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (2)



Err employment law is quite diferent in the UK you know

No 1 share options are dfierent in the UK and sharesave is no brainer for any employee that can aford it. on particularly good year in BT the return was £40,000

2 3 and 7 will be taxed as benefit in kind HMRC is less of a Pussy than the IRS

over 5 years ago

Andy Killworth

Andy Killworth, Digital Marketing Executive at Koozai

Aside from flexible hours/locations, none of this is 'free' is it? I for one would quite happily not have someone else clean my home (I'm an adult after all) and have a slightly higher salary.

over 5 years ago

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