A few weeks back, when Basecamp was in the news for all the wrong reasons, there was a part of Jason Fried’s “Changes at Basecamp” post that didn’t get a lot of attention:
No more paternalistic benefits. For years we've offered a fitness benefit, a wellness allowance, a farmer's market share, and continuing education allowances. They felt good at the time, but we've had a change of heart. It's none of our business what you do outside of work, and it's not Basecamp's place to encourage certain behaviors — regardless of good intention.
He goes on to say that Basecamp “paid every employee the full cash value of the benefits for this year” and introduced a profit sharing plan, so they’re trying to be thoughtful about it, I guess.
What bums me out about this change is that the benefits Fried describes as paternalistic could also be labeled asymmetric, meaning they provide greater benefit to people who earn a lower wage/salary1. These types of benefits can be tremendously rewarding to people with less disposable income. When considering whether to offer benefits that are “paternalistic”, it’s important not to throw the baby out with the bathwater.
Fog Creek’s benefits
I don’t know how to share this without sounding gauche. I love to exercise, especially during the summer when the sun is out, and I can go for a run with my daughter, followed by a strength workout in the carport, followed by a ride on the Peloton, followed by mowing the lawn, followed by a 4 mile hike with the kids2. I’m grateful that I have a body where I can do that. I have, at this point in my life, fitness for these activities. I did not always have this level of fitness.
Back in 2011, when my daughter was only two months old, I made the decision to move to New York to accept a job as a support engineer at Fog Creek Software. Here’s an archived version of the job description, listing benefits such as:
Competitive salary
Free gym membership
Free MetroCard
Free lunch
Free soft drinks and snacks
Comprehensive health insurance plan
401(k) retirement plan with matching
Stock plan
Generous parental leave policy
Flextime
Four weeks paid vacation
Long term / Short term disability
While the salary was indeed a significant bump from where I was at, we were now living in New York, which was a lot more expensive than the suburbs of Atlanta. Further, we had to give up my wife’s income. With my salary, we were able to pay our bills, but we weren’t able to put away any money in savings. Things were tight.
If it hadn’t been for the benefits, I wouldn’t have been able to accept the job. The healthcare benefits—which were insane, paying 100% of premiums and 100% of the deductible—we didn’t have to budget any money in our savings for unexpected healthcare expenses. And with a free MetroCard, my transportation to work was covered, so we were less dependent on having a car.
The benefits were what helped us to offset some of the variable risk of uprooting our young family and moving to New York. Could some of that risk have been offset by just bumping the salary? Maybe. We could have perhaps saved a bit more money in the long run, but the benefits gave us the peace of mind we needed to justify making the move, which at the time was more valuable to us than an increase in salary.
Life benefits
Fog Creek also provided a few “lifestyle” benefits which I was eager to take advantage of. “Free gym membership” was one of them, which paid up to $150 per month(!) for a gym membership. For where we were at in our life, this was an unheard of amount of money to pay for a gym. The most I had ever paid was $19/mo for Fitness 19.
With a “high school gym class” level of fitness understanding, I was never particularly fit or healthy3. I had heard about CrossFit, but never considered it too seriously because of the cost. With a $150/mo budget for a gym membership, I could afford to try it out. Before the end of my first week at Fog Creek, I had signed up.
During my first CrossFit class, I had to take a break and sip water while sitting against the wall to avoid passing out. This was not a difficult class! I was just that out of shape. One of the coaches gave me a ride home. But I kept coming back. I finished the “foundations” series of classes and started going to regular classes. I lost weight, added muscle, and started doing things with my body that I had never thought possible.4
Getting paid to learn
All members of technical staff at Fog Creek got to attend a work-related conference each year, all expenses paid. I had never attended a work-related conference at all, so I was always incredibly grateful to be able to take advantage of this perk.
During my time at Fog Creek, I attended: the Business of Software Conference; UserConf NYC (now ElevateCX); an Edward Tufte one-day workshop; an “unconference” hosted by TechSmith in Okemos, MI (I learned all about screencasting); Adobe MAX in LA (for a minute I thought I wanted to be a videographer); and Wistia’s first customer conference (again, for a minute I thought I wanted to be a videographer). When I moved over to Trello, I ended up spending my learning stipend on leadership coaching, which helped me to build a solid foundation as a manager.
Similar to the gym membership, it’s unlikely I would have budgeted our family’s finances to further my career, certainly not to the tune of several thousand dollars per year.
In favor of asymmetric benefits
I’m 100% positive that if I had been given a bump in salary rather than a gym membership, it wouldn’t have gone to a CrossFit membership or a work conference. Finances were just too tight and I wouldn’t have been able to justify the purchase. Taking advantage of the “free gym membership” benefit gave me the opportunity to appreciate fitness, which quite literally changed my life.
I’m at a different point in my career now and my family’s needs have changed. We’re content spending $39/mo on a Peloton5 subscription and wouldn’t take full advantage of a $150/mo gym membership if it were available. Similarly, I’m able to fund my MBA education mostly on my own, though FullStory’s learning stipend is helping out a bit.
If companies offer benefits that nudge employees in a positive direction both personally and professionally, I’m okay with that. I know there are extremes that need to be avoided, but in general I’m in favor of benefits that might be appreciated to a greater degree by those who need it the most.
I’m not sure the best way to phrase this. You could say “lower wage/salary”, but you could also say “more junior employees” or “those who are earlier in their careers”, but that’s not quite right, either. The perceived benefit is a function of income, yes, but it’s also a function of expenses. You could have relatively low income but also have low expenses, so perhaps the benefits wouldn’t be felt as much? Still, if benefits are equal for all, the monetary upside of benefits relative to wage/salary will be greater for those with a lower income.
True story from a couple Saturdays ago. It was awesome and I slept very well that night.
Having a baby also made a big impact on how I thought about health and fitness. I wanted to ensure I was healthy and able to support my family.
Oh, that first summer in 2011, I won a “paleo challenge” at CrossFit Queens, which entitled me to free membership for a month. I was able to give that month to Emily for her to get started. We were both hooked.
Again, gauche. Sorry.