It’s been a tough few years for the iconic retail chain John Lewis & Partners, which also owns Waitrose supermarkets.
The embattled group has been trying to claw its way back to profitability following a shift in buying habits, a pandemic, staffing and stock shortage and, of course, an ongoing rocky financial market.
Following the confirmation of a £234million pre-tax loss, Chair of the company, Dame Sharon White, confirmed that it was tripling its target of making savings from £300million to £900million by January of 2026. Part of this slashing of budget, includes the axing of staff bonuses.
This marks just the second time that bonuses will not be handed to staff since John Lewis started the scheme back in 1953, shedding light on the dire conundrum that John Lewis finds itself in.
The challenge of candidate attraction
The sobering reality for the chain is that, whilst bonuses are indeed an unnecessary spend, in the age of the candidate-driven talent market, doing away with key benefits is a move made only by the desperate.
Benefits mean much more than simply giving staff a pat on the back for a job well done. Jobtrain data states that 75% of younger candidates base their decision to take a job offer on the benefits they will receive. A further 54% stated that they’d be tempted away from their job by the prospect of better benefits.
So, by slashing this unnecessary perk of working for John Lewis, the firm may well find that far less applicants are interested in a career at the company.
What is the ‘perk-cession’?
Excuse the use of yet another new buzz-term, however it’s true that we’re currently in the midst of a benefits recession. Or, yes, a ‘perk-cession’.
It’s not just John Lewis finding itself having to cut benefits as profitability stutters. The likes of Twitter and Facebook owner Meta, along with hundreds of other high-profile employers, have made both staff reductions within the thousands and cuts to benefits portfolios in recent months.
In fact, nearly half (47%) of companies surveyed plan to trim employee benefits this year, according to Care.com’s 2023 Future of Benefits survey. It seems that whilst compensation has inflated in recent years, benefits are first against the chopping board when belts are tightened.
The good news for embattled businesses
There is some good news for those foreseeing a similar cut coming to their own organisation. Most benefits that were offered pre-pandemic aren’t really worth much these days anyway.
In short, subsidised fuel costs, free lunches, massages, work-gyms or even weekly trips to the golf course mean very little to the modern employer. They just don’t care.
Glassdoor analysis of 70,000 workplace comments posted by tech workers between 2019 and 2022 found that mentions of workplace benefits such as gym membership or free food reduced by half.
Instead, the research found that the most beneficial and sought after perks you can offer don’t cost anything. In fact, they could even save you money. Staff want flexibility, hybrid working, and the understanding that work-life balance is essential.
For example, working parents care way more about the ability to fit their work schedules around their child’s care, than they do about work lunches. Younger workers care far more about having at least a few days to work from home than they do about a free gym membership.
So, perhaps the so-called ‘perk-cession’ isn’t so much a slashing of benefits, but instead a fundamental shift in what benefits are, and what they do for employees.
