Now, tech companies are stealing your free lunch. Now they’re after your 401 (k) and health care.

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• The tech companies are continuing to reduce perks and could start reducing 401(k), healthcare and matched 401(k).
• Even after losing the perks that used to define the tech industry, most employees will not leave their jobs.
• Experts said this could change if financial incentives for employees were reduced.

To attract and retain top talent, tech companies offer a variety of office perks, including on-site dry-cleaning, ice cream bars, and paid egg-freezing.

All that is changing now. A slowing economy has led many companies to cut jobs and benefits. This has triggered an identity crisis for some tech workers. According to Layoffs.fyi – a website which tracks job cuts in the tech industry – the sector has shed 200,000 jobs or so since 2023.

Twitter has also reduced the number of free lunches offered by Twitter. Meta employees reported that the company was cutting back on snacks and cereals at cafeterias, after Facebook had already cancelled its Lyft subsidy and canceled the laundry service. Not only Big Tech, but also tech startups and venture capital funds have chosen to reduce or cancel lavish holiday parties.

Few perks will be spared in this new austerity era, and some might never return. Aaron Terrazas is Glassdoor's Chief Economist. He told Insider that tech companies are "preparing for a long period of slower demand and capital investments, so they look at longer-term benefits cuts."

The perk purge is not going to end anytime soon. Experts say that companies will continue to whittle away at these benefits so long as the tighter labour market prevents a talent exodus.

Daniel Keum is an assistant professor of Columbia Business School. He said that the floor for companies at this time seems to be pretty low. "More benefits will be cut, but people will not leave because of many reasons. One is the current downturn in the industry, where a large number of people are searching for work."

Employers should be aware that some benefits are more important to employees than others.

Many tech workers are willing to do without free sushi or massages but they will revolt if their financial benefits, such as 401(k), disability insurance and healthcare perks like fully covered egg-freezing or deep prescription drug discounts, change.

The Most Important Benefits

Tech companies offer a wide range of benefits. The perks offered by tech companies are varied. They include the frivolous (such as booking a table at a restaurant) and the financially valuable, like generous employee discounts, reimbursements for travel and education expenses, as well as the less important ones.

Keum called these more valuable perks "invisible wage." He said that although they don't directly affect salaries, the perks make employees' lives easier and cheaper.

Losing these benefits is more likely to make current and future employees leave. In a survey conducted by iCIMS on May 2, a provider of recruiting software, 42% of respondents stated that they expected their employers to provide 401(k), 34% said the companies should offer financial planning and 28% wanted a program for student loan repayment.

Terrazas explained that most people arrive at a pragmatism when they consider what they are giving up, and the alternatives available. The trickier discussions are those that revolve around remote work and dependent coverage.

Experts say that companies would not rule out reducing these financial benefits, even if it meant alienating workers.

Employees may find it harder to demand more benefits due to the rise of artificial intelligent and offshoring. The tech labor market will remain tight due to a glut in new coding and engineering talent.

If you are in the tech industry, prepare to lose some of your most beloved perks – possibly for good.

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By: edavid@insider.com (Emilia David)
Title: Tech companies got rid of your free lunch. Now they’re coming for your 401(k) and healthcare.
Sourced From: www.businessinsider.com/google-facebook-cut-perks-employee-benefits-tech-workers-wont-quit-2023-5
Published Date: Thu, 25 May 2023 20:46:32 +0000

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