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Food as an Employee Benefit - One of the Best Values and ROI

Updated: Aug 17, 2023

What are the Benefits & Perks of a Meal Solution?

 

The pattern is clear no matter where you work. Employees value food during the day and more companies are realizing that offering free catered meals is becoming a necessary part of their overall compensation package.


Thinking about food as a part of a company’s benefits package is a foreign idea. In the past, food was thought of as “perk” of the job. Something that may be there or may not, but today, that’s changing. Meal benefits are something that prospective employees value and retained employees cherish. It’s something to look forward to, a reason to collaborate or simply to reenergize. But it also holds so much value relative to its cost. Employers can drive retention, generate higher levels of productivity, and in office participation at a fraction of the expense of other benefits.


Jess Cording, journalist for Forbes, recently reported on a survey of 1000 workers nationwide and concluded that 65% of the respondents said they would be willing to come to work more often if there was a food incentive. Moreover, 25% of respondents said they would be willing to come back to the office full time if a meal benef


it was offer. Additional, respondents also stated that food was the benefit that was valued more over other perks such as happy hours and gym memberships (1). In another retention study, hosted by indeed.com, 67% of respondents indicated that were “very happy” at their job when a food benefit was offered. Retaining and hiring great people is a continual challenge with unemployment hovering at less than 4.5% (2).


Wow that’s really something to consider as an employer!


How does free workplace catering drive results?

Let’s take a step back, and look at why providing your team members with free food drives employee satisfaction and retention.


  1. Improve productivity: Employees will feel more valued and charged after a great meal. Not to mention that they won’t have to leave the place of employment to spend crucial productive time waiting in line or at the drive through. Meals that are available in the workplace translates to more productivity and less time off the clock

  2. Encourage innovation and company culture: When team members share a meal together – daily, or even weekly – you can naturally drive an ethos of team spirit, innovation, and even unplanned synergies

  3. Improve recruiting results: Free meals can help you recruit new talented staff because it signals that upper management is invested in creating benefits that employees value and that add value to their work place experience.

What are the costs?


Tax Benefits: When food is provided to more than 50% of your team the expense is 100% deductible. Moreover, the employee gains the advantage of being provided a meal, tax free. (i.e. let’s say that the meal they get has a value of $12. That’s the equivalent of $15 gross earnings based on the average office employee tax bracket)


Other incentives like a gym membership, term life insurance or company cars are not exempt. But, food provided on the work place premise or are considered "de minimis" meals are 100% tax free!

  • De Minimis Meals refers to a deduction for any meal that you provide to an employee that has very little value such as coffee, donuts, meals that enable an employee to work overtime, picnics and or parties

Flexible Budget: The cost of a food program provided on a regular basis can range from $9-$15 per meal. But, the frequency and scope that is provided can meet almost any budget.


Value: Free food is valued more by employees than most other benefits including gym memberships, company cars, phones, laptops, onsite daycare, subscriptions and student loan reimbursements. (3) Food is also one of the most affordable and flexible benefits an employer can offer. On average, companies spend about 30% of an employee's total compensation on supplemental benefits alone. (BLS Burau of Labor Statistics)



Providing a full meal benefit (i.e. 2x per week at $15/meal) can represent less than 2% of an employees total compensation package, or about 6% of an on average benefits package.


***(based on an employee who’s total compensation package is $75K/yr)


For comparison, in the same scenario, a health benefit can cost the employer almost 10% of the total compensation package, and almost 30% of total benefits offered. (4)


A Free Meal Benefit = Instantaneous ROI!

At first glance, you might say to yourself, "that's hyperbole."


But, it’s in the math.



For example, say the employee makes $75,000 per year.

  • Based on an 8hr workday, at full time, that employee earns approximately $36/hr. Say there is a meal benefit provided to this employee which is valued at $15. If the employee does not need to leave the premises for an hour for lunch and instead takes a 30 min break, the company actually increased its productivity by $3.


Let’s use another example of an hourly employee making $22/hr.


Say you provide an employee with a meal that is valued at $11, 4 times a week - a weekly benefit of $44 for food. Instead of that employee leaving to wait in line at a restaurant or at the drive through, they can take a 30 min break instead of 45 min allowing them to get back to work sooner. That’s an hour a week of increased productivity for that employee. If the value of the productivity is say 20% of the sale over the course of the week ($110 additional revenue) and the gross profit is say 50% of the sale the company just generated an additional $55 over the week by providing a tax free meal benefit. Well you just made an additional $11 just for buying the employee lunch-not bad!


The direct ROI above only scratches the surface of value by providing a free meal. Providing a meal benefit adds back the value of increased retention, lowers the cost of employee acquisition, increases innovation, and builds a strong company culture people can get behind. It's easy to see why providing food is no brainer! (5)


Service Options to Provide Free Meals at Work


Corporate catering can take a variety of forms. Plus, it’s always better to work with an established and consistent vendor. Whether the need for catering is once a week, or a meal everyday, identifying the right solution is key!


What Are My Options?


On-site Corporate cafeterias:

A company may choose to invest in setting up kitchens, food service areas, and restaurant seating on their premises. Large scale food service providers often require long term contracts with very specific profit targets and cost controls. There is usually little room for flexibility, and should the client become dissatisfied with the service, they remain contractually obligated to continue.


Restaurant Delivery and 3rd Party Ordering:

This solution tends to be the most problematic, and not to mention expensive. Food delivery services by local restaurants have grown in popularity but many companies discover that there are several drawbacks to this approach including:

  1. Inconsistent quality,

  2. Poor service,

  3. Higher costs, and

  4. Limited accountability.

While 3rd party ordering services gladly accept your order, they are a software based company and not a hospitality based company. They simply take your online orders and provided little to no added value or customer service.

On-site Snack & Refreshment Kitchens:

Often companies choose snack kitchens as a good solution for their team. Kitchens are often stocked with beverages, snacks, or premade meals that employees can enjoy throughout the day. But these typically need to be managed by onsite employees, which can take away form their other duties and responsibilities.

Outsourcing Food Benefits and Catering:

At Lunch Wired, we offer our clients a wide range of catering options including breakfast, lunch, appetizers, snacks, boxed lunches, and Grab n Go solutions. We believe that the highest ROI on a meal benefit is catered lunches delivered directly to your location, and served on-site.


We can spread our fixed costs out over all our clients, thereby dramatically reducing the costs for each event because we have a central commissary kitchen.

Service Type

On-Site Cafeteria Provider

Restaurant & 3rd Party Broker

Specialty Vendor

Lunch Wired

Lower Overall Cost

X

Working Directly w/Vendor

X

X

X

Consistency

X

X

X

Comprehensive Selections

X

X

X

Requires a Contract

X


Flexible Delivery Logistics

X

X

X

Focus on Group Catering

X

X

The Lunch Wired approach to off-site corporate catering

Our central commissary model allows us to keep a great pool of Culinary Team Members who are well trained. This allows us to maintain the quality and consistency of the food we deliver to you. Our staff packages the food and delivers it to your place of work or meeting space. Our in-house delivery and expediting teams are focused on delivering your meals on time, accurately and to your expectation.


Our Catering Concierge Team Is focused on providing excellent solutions while maintaining budget with menus that fulfill your entire team’s needs. Our team is trained to solve your event or service needs with a wide variety of options. We intend to be a comprehensive solution for your food needs. Knowing that your Catering Concierge will strive to meet your needs while never overselling, means we are focused on building a lasting relationship that you can count on. Whether you are providing meals daily or weekly, your employees receive variety, high-quality, house-made food experience. When you work with Lunch Wired, you avoid the cost and complexity associated with building and managing an in-house kitchen or disconnected sales organizations only interested in securing your sale.

Let's Give You An Actual Example

We delivered lunch, Monday through Friday, for a well-known financial firm with 350 employees.

Every day we delivered a selection of individually boxed salads, sandwiches, wraps, hot meals, snacks and dessert. In many cases, we also provided a solution for vegetarians, vegans and individuals with dietary restrictions such as gluten and dairy intolerance.



LET'S TALK


If you are considering taking advantage of the ROI delivered by offering meals to employees at work, contact us! Our corporate catering team is ready and available to help you design the right catering solution for your needs! Feel free to send us an email at catering@lunchwired.com or give us a call at (303) 835-7988 ext. 2!










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