Cost Free Employee Benefits

Attract and Retain the Right People Cheaply

Free employee benefits can be valued gifts.
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Among the best money saving ideas for controllers, CFOs and human resources managers alike, companies in all industries should seek opportunities to offer employee benefits and perks that involve little or no incremental cost to the firm. Examples abound, covering industries such as:

  • Airlines
  • Hotels
  • Brewing
  • Clothing and consumer products
  • Professional and financial services

All such employee benefits keyed to the firm's products can have the added beneficial effect of attracting people with the right interests as employees.

As the examples below illustrate, these can be ways to draw, for instance, travel enthusiasts to airlines and hotel chains, beer lovers to breweries, fashionistas to fashion industry firms, and so forth. Detailed explanations follow below.


The traditional practice among airlines is to offer unlimited free standby travel to all employees. That is, an employee is able to fly for free if there is an empty seat available on a given flight as of some point very close to departure time. Since such a seat would have been unoccupied anyway, letting an employee have it for free comes at no incremental cost. In years gone by, this employee benefit allowed international airlines like Pan Am to attract a large number of young people eager to see the world. This included people in administrative positions, who would accept lower salaries than otherwise would have been necessary to draw top talent.


Likewise, hotels and hotel chains have some history of offering otherwise empty rooms at no cost to employees. This also helps to attract travel-minded employees who can cut their own vacation costs significantly as a result.


An equally venerable practice within the brewing industry is to offer employees to take home a quota of free beer per month.

Craft brewer Ommegang, located outside Cooperstown, New York, takes this practice one step further. While employees are entitled to a free case of its premium-priced beer each month, this benefit actually has virtually no incremental cost impact to the company. The reason is that the free cases typically consist of bottles rendered unfit for retail sale when the bottling and labeling line misfires, putting labels on incorrectly.

Clothing and Consumer Products

Taking a lead from breweries such as Ommegang, any manufacturer of clothing or other consumer products should consider giving usable but unsalable merchandise (often called factory seconds) to employees for free, rather than discarding it. A more common alternative among consumer products companies has been to operate in-house company stores catering solely to employees, with their products priced either at wholesale or at production cost. This was once a valued little perk for employees of the former American Cyanamid Company, whose company store offered a wide array of personal care and household products at near cost.

Professional and Financial Services

Professional service companies, especially those experiencing significant employee downtime, can consider having skilled professionals on staff offer their expertise for free to fellow employees who lack these skills.

Thus, for example, a financial services firm with financial planners on staff might offer free financial plans to all other members of staff. Public accounting firms can offer free tax advice and tax return preparation to their employees.

Similarly, electronics and technologies companies might have their technical staff help other employees with home technology issues. Indeed, because financial services firms have large information technology staffs, their expertise also might be placed at the disposal of employees, for those employees' personal needs.

The possibilities are virtually unlimited and can be ways not only to increase employee satisfaction at little or no cost, but also to increase the ability of employees to offer testimonials to friends and relatives about their companies' services.

Regarding professional and financial services, positive word of mouth often is a crucial marketing tool, yet firms typically do little to spur it.

Free Holiday Perks

According to a survey by American Express OPEN, the credit card giant's division serving small business clients, many small businesses have eliminated or cut back on holiday parties in recent years. Many also have reduced or eliminated employee bonuses and gifts. These cutbacks have tended to produce predictable reductions in employee morale and loyalty.

Nonetheless, some businesses have found creative ways to reduce spending on gifts and parties. In addition to giving away their own services to employees as a benefit, some small businesses are bartering with clients who are themselves strapped for cash. One article cited the example of a services company that received payment in kind from clients that included liquor, coffee, and gift cards, then turned around to use these as gifts to other clients.

Another example was that of a small publishing company that gave free ad space in one of its magazines to important clients. The same firm cut the cost of its holiday party by creating a joint event with other small companies.

In yet another case, the executives of a small company tried to ease the pain associated with the cutting of bonuses by cleaning off employees' cars, if it snowed during work hours.

Bottom Line

Free employee perks and benefits, while attractive to some degree, nonetheless have crucial limitations versus cash compensation. Management must never forget, for example, that you cannot pay your own bills with a thank you from your employer.