Most mornings, I envy the people who ride the company commuter bus.
I usually take an intercity express bus, and the trip takes about two hours. By the time I arrive, I want to go home before I’ve even started work. The ride home takes more than two hours. What I envy most is the moment two or three packed express buses go right past my stop.
So why do companies run buses? And why do they feed us? Large Korean companies also offer a remarkably wide and varied range of other benefits.
I was curious, so I looked into it a little. My conclusion: benefits are not goodwill. They are a management technique and a business calculation.
First, they are an investment in productivity.
Research shows that the longer the commute, the lower people’s life satisfaction, and that higher pay does not make up the loss (Stutzer & Frey, 2008, “the commuting paradox”). Bringing tired employees in by bus and taking lunch off their minds is the cheapest way to keep their energy for work. (Personally, this is the one that hits home most!)
Second, they are a way to spend the same money more efficiently.
At first I assumed it was about tax. That is only half right: in Korea, most benefits are taxable too. The more convincing reasons seem to be that a company buys for tens of thousands of people far more cheaply than an individual can, and, above all, that raising base pay drags allowances and severance pay up with it.
Third, they are marketing.
Even when the employee store sells at a discount, the company does not lose much, because the retail margin drops out. (Every company seems to have side effects such as resale, of course.) In return, there is a clear promotional effect when employees buy the company’s products for family and relatives.
Fourth, they feel different when you receive them.
One experiment found that an unannounced cash bonus did not change productivity, while a wrapped gift of the same value raised it substantially (Kube et al., 2012). The gift acted as a catalyst for motivation, because a salary feels like a transaction and a gift feels like a relationship.
Then why do Korean companies offer so many kinds?
It comes from history: during the high-growth era, companies took on housing, tuition and healthcare that the state could not provide. Foreign companies are not stingy; their benefits take a different form, and they think about benefits differently. They give cash and choice. We give in kind, and in many varieties.
There are counterarguments, of course. Benefits are quickly taken for granted, and removing them leaves only resentment. And a benefit I don’t use is worth zero. (That was true for me too, but now that I have something to compare, there are a few benefits I sometimes miss.)
When I meet people from other companies, I sometimes get to hear about their benefits,
and hearing about them shows me the direction a company is pursuing and what makes it distinctive.
Thinking about it, they also show what a company values right now. A benefits list is the most candid employee strategy document a company ever writes.
Saying companies don’t do it because they adore us is not just a joke. If anything, I find it reassuring. Benefits that come from a strategy and a purpose don’t disappear easily. (In fact, labor law makes that hard too.)
Anyway, my conclusion for today: if I had a commuter bus, my productivity would go up a lot!
#EmployeeBenefits #WorkLife #OrganizationalCulture #CommuterBus #ForesightSignals
