Beer, Food, And Furniture: The Casino Approach to Talent Management

Talent managers are increasingly borrowing from the practices of casinos, which have a well-earned reputation for effectively attracting, engaging, retaining, and directing the behavior of their customers. Casino customers lose money, spend hours engaged, and in most cases leave satisfied and eager to return. The same design principles that keep casino patrons engaged are increasingly playing a role inside organizations.

Firms like Microsoft, Google, Starbucks, Facebook, and Pixar have successfully used physical layouts, food offerings, social settings, and perks similar to those found in casinos to attract, maintain, and manage their customers/employees. According to one study, the number of corporations that offer “outrageous perks” nearly doubled between 2006 and 2011. So before you reject the idea, learn more about it.

Understanding the Casino Approach to Talent Management

Time clocks, policies binders, and rigid work rules may have worked long ago with regard to keeping employees at their desks, but times have changed. The casino approach focuses on using positive factors and “productivity perks” to influence behavior, including:

1. Enticing food — includes free, often gourmet food (DreamWorks, Skype, Netflix, Zynga, & LinkedIn) snacks and a large variety of drinks. Offering abundant coffee and caffeinated drinks both to provide a stimulant for productivity and to increase opportunities for co-worker interaction.
2. Unique office designs and facilities — creative office designs and furniture provide perks and innovations that not only excite recruits, but that also make it comfortable for employees to put in lots of hours. Three Rings for example designed its office to look like the Jules Vern Nautilus submarine, including a 20-foot long squid tentacle cushion and giant portholes.
3. Events — onsite events that are fun can proactively encourage creativity and cross-functional collaboration. Zappos holds both product design contests among employees (e.g. to design a new Adidas shoe) and toga/chug parties.
4. Policies — the absence of silly policies allow employees to create wild workspaces and workstations (Pixar and Google). Some organizations allow employees to bring their pets and children, which further reinforces a message of freedom and creativity. Perks like free beer and wine demonstrate unambiguously that the firm treats employees like mature adults.

Impacts of the Casino Approach to Talent Management

If you think that offering perks like a dress-down day or support for childcare makes your firm appear “modern,” think again. Numerous large and small firms in almost every industry have evolved beyond dated 20th-century perks to offer those more akin to the casino-based talent management model. “Outrageous” perks are primarily recruiting tools, but they have a much broader impact on a wide variety of both candidate and employee behavior. Some common impact/goals for the casino approach are listed below:

• Improving recruiting — although nearly every firm states in its recruiting and employer branding materials that they are “different,” the outrageous perks offered under the Casino approach are much more likely to be talked about. Offering free food/snacks, a relaxed physical environment (Zynga) or even letting employees bring their dogs to work (Google and Kimpton) send a clear initial message that you really are different from traditional firms like IBM, GM, and GE.
• Getting them to come to work early — offering a free breakfast (Twitter, Netflix, & Digg) gets employees to come in early. Infusionsoft offers a cereal bar and Pixar is famous for its free “wall of cereal.” Free shuttles, ample bicycle storage (Three Rings) and onsite shower facilities (Springbox) can also encourage workers to come in early. Some firms have even offered valet parking (Microsoft and Google) to get their employees to their workstations faster.
• Keeping them at work — by increasing the number of hours that an individual is physically at work, you increase the likelihood that they will actually work more hours and that they will interact with different employees. A free gourmet lunch (Facebook and Google) and ample snacks decrease the need to leave the facility for nourishment. Onsite facilities like car care (Cisco, SAS, and Google), allowing dogs, an onsite laundry (Google) and a huge swimming pool (Pixar) take away many excuses for leaving the facility. Adding frequent during- and after-work events like speakers (Google and Facebook), parties (Zappos) and movies (Pixar) keeps them at the facility longer. In perhaps the most outrageous illustration of the casino approach, Facebook during its first few years offered a $7,000/year bonus for employees who lived within a mile of their headquarters in order to encourage employees to come the work even during off hours.
• Increase collaboration — increased cross-functional collaboration is a primary factor in increasing the speed of innovation. By using architectural features (Google, Sun, and Pixar) and even timing the food lines (Google), firms can increase the likelihood that this valuable collaboration will occur more frequently. Other features like free shuttle buses (Google, Microsoft, and Genentech), sports facilities, and free movies (Pixar) can directly increase collaboration. Companywide ski trips (Google & Odin Technology) can be used to provide additional chances to bond and collaborate.
• Increase retention and decreased poaching — most talent management professionals realize that free food, gyms. etc. can directly impact employee retention because they offer desirable features that no other company can match. But perks like a free lunch (Skype, LinkedIn, and Zynga) also have another benefit in that by keeping employees at the facility, they minimize the chances that an external recruiter can take them to lunch and recruit them away.
• Reinforce your message of freedom innovation and creativity — it’s quite common for corporate value statements and websites to extol the firm’s culture of freedom and creativity. However actions speak louder than words in this area. For example, providing free alcohol to employees causes most in HR to “lawyer up,” but for firms that want to be seen as “different,” it provides another opportunity to treat employees as mature adults. Numerous firms have joined this trend by either providing kegerators or refrigerators full of beer and wine (Twitter, Yelp, Door Number 3, Crowdflower, Bluespring Software, Barkley Advertising, Digitas Health, DPR Construction, and Three Rings). Google’s “martini blowout” party sent out a distinct message just by the name of the event. Conservative individuals within HR may disapprove the concept but nothing demonstrates that your firm is “different,” creative, trusting, and tolerant clearer than providing alcohol.
• Improved health and productivity — in addition to keeping employees onsite longer, offerings like onsite gyms (Oracle, Chesapeake Energy, and Nike), providing organic food (Google and Facebook) and onsite healthcare facilities (SAS and American Pipe) can lead to better employee health, lower insurance rates, and reduced costs related to sick day usage.
• Impressing customers — especially at startup firms, bold and outlandish office designs and furniture can also impress visiting customers and investors. They can show potential customers that creativity and innovation permeates the entire organization.

Final Thoughts

The goal of this article is not to provide a list of all the new and what many consider to be “outrageous” perks that firms are beginning to offer. Instead, the primary goal is to make you aware that these new adoptions are based on solid research and behavioral principles. To the untrained eye, the “outrageous” offerings that we have all heard about might appear to be simply extravagant employee perks, but nothing could be further from the truth. Firms like Google approach talent management as a science, not an art. The best firms that have adopted elements of this casino approach have conducted a thorough ROI analysis in order to demonstrate to skeptical executives that the benefits in productivity and innovation far outweigh the costs and the risks.

You should also note that although many of the firms listed are Silicon Valley firms, the practice has spread to many other geographic areas and industries. The final lesson for all in talent management to learn is that the 20th century model of work/life balance is gradually being replaced by a model that purposely blurs the line between work and life, to the benefit of both the employees and the shareholders.