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Corporate Perks: New Research Suggests Alcohol Perks Can Actually Drive Talent Away

February 28, 2018 by Josh Hrala

We’ve all seen them. Countless workplaces across the country have decided that alcohol-based perks are a great way to attract younger, recently graduated talent to their workforce.

corporate perks

On paper, this seems like an okay idea because it attempts to showcase that the company is hip and cool. A nice place to work that’s laid back and ran by fellow young, motivated individuals.

But does it actually work?

That was the question on the mind of Anthony Klotz, an assistant professor in the College of Business at Oregon State University. Alongside his co-author, Serge da Motta Veiga of American University, Klotz set out to see if alcohol-based corporate perks – happy hours, an open bar, etc – played a role in attracting new, young talent.

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“A lot of companies seem to assume that young people will view alcohol-based perks positively, but in reality, alcohol can be a turn off for many applicants,” Klotz said.

“These kinds of little things can play a significant role in terms of people’s interest in working somewhere.”

In other words, what may seem like a perk to some can actually turn others away. The assumption that all millennials want to drink at work is just that: an assumption.

To see what was actually happening, the team started by taking a look at what questions younger applicants asked during their interviews at various companies. This allowed them to see where alcohol ranked with candidates.

“Students preparing to enter the workforce ask a lot of questions about alcohol and job interviews and the best way to navigate those situations,” Klotz said.

“And generally, people are confused about how to deal with alcohol in the workplace. Not everyone finds it appealing.”

Taking a look at how applicants questioned alcohol-policy is one thing, but in order to see if alcohol-based corporate perks were truly working out how they were intended, the team ran two experiments.

First, the team devised two different flyers for fake jobs. One of the flyers had workers holding coffee cups and described employee luncheons as a perk. The second depicted workers holding alcoholic beverages and described happy hours as a perk.

corporate perks

These flyers were then passed off to 180 college students in a business class, a prime audience for the flyer since these same individuals will be hitting the corporate job market upon graduation.

Next up, the team performed another experiment where 122 college students went on a dinner with a ‘co-worker.’ For half of the study, the co-worker ordered water and in the other half the co-worker ordered an alcoholic beverage. The students were then asked what they would do next to get a sense whether the co-worker’s choice impacted if they would drink or not.

For both experiments, the team needed a way to gauge social skills. To do that, they had the participants of each study fill out a questionnaire that helped them judge their level of ‘political skill,’ which is a combination of social skills that indicates how well the students were at understanding others in the workplace, navigate the social space, and other interpersonal social skills.

With the political skills gauged, the team reviewed what happened during both of the studies. The results were that those with lower political skill didn’t benefit from the addition of alcohol to the workplace.

What this suggests is that some workers are likely turned away from workplaces that have a culture of drinking built into the perks.

“When people enter the job market, they are looking for a company that shares their values,” Klotz said.

“When the sales pitch is focused on the area’s wineries, happy hours, or the availability of beer at work, it may raise questions about fit for prospective employees.”

So, alcohol-based corporate perks might actually impact what talent decides to join organizations, which is problematic because companies could lose out on valuable workers by using a perk that they believe is overwhelmingly positive.

What about retaining those that do have higher levels of political skill, though? Were there any benefits there?

“This is a specific condition where alcohol is harmful in recruiting prospective employees,” Klotz said.

“However, we didn’t find any significant upside to including alcohol for the participants that showed high levels of political skill.”

corporate perks

Klotz goes on to say that what workers really want is a place of work that aligns with their personal values and goals. This means that companies should be honest during their hiring process. If, he says, alcohol is a part of the culture of the workplace, the best thing to do is to be upfront about it because it will help negate future turnover.

Also, he gives a bit of advice for those entering the job market who may be wary about how they will fit into corporate cultures.

“Think about whether the values you are seeing align with your values,” he said.

“Some of these small things can play an important role in whether you are happy and satisfied in your job.”

The takeaway here is that corporate perks should engage employees – not push them away or merely entertain them. We’ve talked about this before. Corporate perks are there to make sure your employees like where they work but they should also engage and retain. If your corporate perk is just there to seem hip, it’s probably not a great perk.

The team’s research was recently published in Human Resource Management.

Josh Hrala

Josh Hrala

Josh is an HR journalist and ghostwriter who's been covering outplacement and offboarding for over six years. Before pivoting to the HR world, he was a science journalist whose work can be found in Popular Science, ScienceAlert, The Huffington Post, Cracked, Modern Notion, and more.

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