Back during the Internet tech boom of 1999, in what seems like a lifetime ago, I worked at a well known San Francisco dotcom that couldn’t help avoid the big crash that was to come.
Like the meteor that wiped out the dinosaurs, the bursting of the dotcom bubble (and the drying up of the venture capital and equity markets) was fairly indiscriminate in that it wiped out a great many Internet companies both good and bad.
But somehow, my dotcom — Pets.com — got held up as a poster child for the excesses of the the Internet bubble era.
The funny thing is, my company exhibited virtually none of the well-publicized (and crazy) dotcom behavior that the sector was known for. We were a modestly run and pretty sober company, for the most part, and we closed our doors with tens of millions of dollars in the bank that was returned to investors.
I found myself thinking of this again today when reading a Wall Street Journal story about how The Perk Bubble is Growing as Tech Booms Again. It sounds like 1999 all over again:
Here in the capital of the latest tech boom, engineers and product developers work late into the night creating the next big thing. But they take office culture just as seriously, fueling behavior that is reaching a level of froth not seen in a decade.
Some Web start-ups are partying like it’s 1999. Airbnb’s housewarming later this month is to include a visit by rapper and occasional tech investor M.C. Hammer. The party room at reviews site Yelp Inc. has three beer kegs with built-in iPads to offer information about what’s on tap. Last month, start-ups Peanut Labs Inc. and AdParlor Inc. sponsored the sold-out “Pirates of Silicon Valley Cruise,” a $600-per-person seafaring party.
Companies say the fierce competition for talent among start-ups has necessitated extraordinary perks meant to attract and retain employees.”
Is this a replay of tech industy excess?
As someone who lived through the last round of excessive technology industry perks, I’m amused by the tenor and tone in the Journal story from company executives defending the crazy, costly, and (some might say) silly benefits that they lavish upon employees.
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At Airbnb, which was founded in 2008 … institutionalized fun is a philosophy. “You can’t take the day too seriously if you’re in a meeting with somebody wearing a fake mustache,” says (29-year-old company co-founder Joe) Gebbia, who often participates in the company’s Mustache Monday.
He says creating a space where people feel comfortable spurs innovation: “We’re going to work hard and play hard.”
Well, maybe going a little crazy at work DOES spur some to be more innovative, but pardon me if I’m skeptical, because this sounds like a replay of what so many other Internet companies were saying back in 1999 and 2000 — before the bubble burst and the employee perks proved to be an unsustainable and costly excess.
Take it from me: you don’t want your company to be held up as an example of excess anything, unless perhaps an excess of success due to a great company culture — like Southwest Airlines.
Very few companies seem to be able to consistently offer these kinds of perks and be successful — Google is one such company, as I have noted before — and my guess is that these kooky benefits the Journal is writing about won’t last too long either. Why? Because there is usually something wrong if you have to offer crazy perks and goodies to attract and keep good people working for you.
When “model workplaces” aren’t
Of course, there’s more than crazy perks from technology companies in the news this week. Here are some other HR and workplace-related items you may have missed this week. This is TLNT’s weekly round-up of news, trends, and insights from the world of HR and talent management. Yes, I do it so you don’t have to.
- When “model workplaces” aren’t such a great model. The Center for Public Integrity highlighted how workplaces that are touted as models for others aren’t always what they appear to be. “Workers at plants billed as the nation’s safest have died in preventable explosions, chemical releases and crane accidents. They have been pulled into machinery or asphyxiated. Investigators, called in because of deaths, have uncovered underlying safety problems — failure to follow recognized safety practices, inadequate inspections and training, lack of proper protective gear, unguarded machinery, improper handling of hazardous chemicals. Yet these companies have rarely faced heavy fines or expulsion from the program. In death cases in which OSHA found at least one violation, VPP companies ultimately paid an average of about $8,000 in fines. And at least 65 percent of sites where a worker has died since 2000 remain in VPP today.”
- Is 401 (k) auto enrollment driving down retirement savings? According to The Wall Street Journal, “A 2006 law designed to boost employees’ retirement-savings is having the opposite effect for some people…an analysis done for The Journal shows about 40% of new hires at companies with automatic enrollments are socking away less money than they would if left to enroll voluntarily, the Employee Benefit Research Institute found…The problem: More than two-thirds of companies set contribution rates at 3% of salary or less, unless an employee chooses otherwise. That’s far below the 5% to 10% rates participants typically elect when left to their own devices, the researchers said.”
- Unemployment office staff find themselves unemployed. The St. Louis Post-Dispatch reports that although “they were assigned to the front line in the effort to get 113,000 unemployed St. Louisans back to work … Now nearly 60 people serving in various capacities in Missouri Career Centers throughout the region are themselves out of a job … The cuts stem from a statewide loss this fiscal year of more than $9.3 million — 30 percent of the federal Workforce Investment Act allocations that finance training and education programs across Missouri. The revenue is funneled to counties and municipalities by the Missouri Department of Economic Development.”
- Salaries for new grads are rising. “Employers have loosened the purse strings for this year’s crop of college graduates,” the Chicago Sun-Times reports. “The average starting salary offer to the Class of 2011 rose 4.8 percent to $51,018, compared with offers extended to the Class of 2010, according to the latest survey from the National Association of Colleges and Employers released Wednesday. The increases overall are a good indication that the job market for new college graduates is gaining strength, according to Marilyn Mackes, the association’s executive director.”