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The Google Effect

Thanks to well-publicized perks at the Silicon Valley search giant, more companies are beefing up their benefits and responding more quickly to employee feedback.
The Google Effect Cubed
Cubist Pharmaceuticals in Lexington, Massachusetts, has improved its employee benefits in the Google era.
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The Marketplace table by Teknion
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Richard Scrushy
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Industry:
Technology
Summary:
The Company provides targeted advertising and global internet search solutions as well as intranet solutions via an enterprise search appliance.
Primary executive:
Dr. Eric E. Schmidt, Ph.D.,
A resourceful job applicant could certainly use Google’s search technology to take the measure of a target company, to learn about its size, performance, and reputation. But when it comes time to benchmark corporate benefits, it turns out that Google is much more useful as a yardstick rather than as a tool.

The perks of working at the Googleplex are legendary—free gourmet food and snacks, free bus service to and from work, free massages, free you-name-it—so that, like its stock price, Google’s ascendancy to the top of best-places-to-work lists has been meteoric.

In Google’s backyard in Silicon Valley, the competition for employees has certainly been fierce, with companies offering ever more lavish and creative benefits. Facebook, for example, provides a $600-a-month housing subsidy for employees who live within a mile of its office in Palo Alto. Like Google, it also features free catered meals and beverages, plus dry-cleaning and laundry services on-site, as well as souped-up laptops for each staffer.

But across the rest of America, the movement toward extravagant employee perks has been more tempered. Many companies are trending toward adding Google-like perks, such as access to recreational activities and time-saving conveniences, but few are following in Google’s footsteps and offering complimentary meals all day or free transportation to and from work.

“Google remains an exception,” says Jeffrey Pfeffer, a professor of organizational behavior at Stanford University, who has studied the impact of employee benefits on corporate performance.

Competition for highly qualified workers can be a big motive for employers who go heavy on the perks. Like Silicon Valley, Boston’s Route 128 corridor boasts a slew of high-tech companies, each angling for the region’s top talent. At Cubist Pharmaceuticals in Lexington, Massachusetts, a Google-like environment has been created to lure them: Employees can schedule free on-site neck and shoulder massages, participate in on-site yoga classes and other fitness programs on their lunch breaks, drop off their dry cleaning at the office, work flexible hours, and even celebrate birthdays at breakfast with the company’s C.E.O., Mike Bonney. Once a month, the entire company gets together for a party to recognize recent accomplishments.

“There’s a tremendous amount of intellectual capital in this area,” says Sharon Levine, Cubist’s senior manager of compensation and benefits. “We try to distinguish ourselves.”

Cubist Pharmaceuticals, which was founded in 1992, focuses on acute-care antibiotics and employs about 450 people. Cubicin, a once-daily intravenous bactericidal antibiotic introduced in 2003, has brought the company to prominence in recent years.

The company’s How Do You Innovate Program awards employees $100 to $1,000 for generating innovative workplace ideas that take hold. A recent winning idea was a proposal to establish a Cubist College that would offer employees free courses taught by colleagues to foster career development; the “college” has already begun offering classes. The company also pays close attention to ideas it receives via an online suggestion box; one recent recommendation was the creation of a leave-and-take book swap area in the cafeteria, which was quickly adopted (for more on Cubist's benefits, see our slideshow).

Greater work-life balance is at the top of most employees’ wish lists, according to Tanya Flynn, a career adviser at CareerBuilder in Chicago. Google’s perks, she adds, “have made employees much more a part of the process.”

Eli Lilly, Fannie Mae, and Sun Microsystems all offer a compressed work week and flextime at the discretion of individual managers. I.B.M. and AT&T feature telecommuting and reduced hours, says Flynn, while S.C. Johnson and Morningstar allow job sharing and sabbaticals.

In Des Moines, the headquarters of the 128-year-old Principal Financial Group offers a balanced view of the state of perks in corporate America. At the High Street Retreat in Principal’s corporate center, employees can play ping-pong, foosball, or shuffleboard; rent DVDs; drop off film and check email; and enjoy the quiet reading room. And during business hours, they can visit an on-site pharmacy where the staff is familiar with the company’s health care plans and can advise workers on how to save money on their prescriptions. The company also has several lactation centers to help new mothers make the transition back to work, as well as several huge fitness centers, which are used by 1,000 employees every month. And Principal recently broke ground on a new child-care center.

It’s likely that in all cases, market forces are at play. Notes Tom Slater, Cubist’s vice president of commercial development, “You have to be competitive and keep in style with the times and in terms of what’s available.”

And ping-pong tables, it seems, are in demand.

 
 

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