This company pays its employees to socialize outside of work

You couldn’t pay me to hang out with coworkers outside of work is a refrain as common as Mariah Carey’s “All I Want for Christmas is You” this time of year. Retail clerks, lawyers, software engineers, nurses, and even reporters have been known to utter the phrase.

But it turns out you can pay your employees to hang out outside of work. Remote-first compliance software company Ethena reimburses employees up to $100 a month to hang out with their coworkers.

In-person engagement. Ethena’s VP of people, Melanie Naranjo, told HR Brew that the concept emerged in March 2022, after rethinking the company’s office space.

Before the Covid-19 pandemic, Ethena budgeted for a 50-person space in Brooklyn. But during the pandemic, employees moved away, and the company began hiring talent across the country.

“We realized that our employees were not leveraging the New York space to the extent that we had envisioned that they would when we first leased the space,” she said.

For Ethena, one of the benefits of working together in-person at the office was the employee engagement it nurtured: organic comradery in the hallway or kitchen, the feeling of a shared purpose amongst colleagues.

Like many companies, Ethena began to grapple with a post-pandemic reality of a disparate workforce and underutilized office space. Naranjo began to explore what might be possible if there wasn’t an office…or an office budget.

“If that money originally was supposed to go towards engagement, what’s another way that we could invest in engagement? We [threw] out a couple of ideas. Do we want to throw a big end–of-year celebration? Do we want to buy more swag for the team?” she said.

The process. All of the office budget ended up repurposed in 2021. Some of the funds financed company offsites (a similar reallocation that tech company VSCO adopted when it abandoned office-based work) and some of the funds transformed into a new employee-driven engagement perk.

Ethena offers employees up to $100 a month to do anything with a colleague and chalk it up to engagement. Employees can save up to three months for larger, more costly outings, and groups of employees can pool their stipends.

Hit the bar for drinks after work, enjoy a Broadway play, run to the nail salon for a mani/pedi, rent kayaks—all are considered employee engagement at Ethena.

“Anytime you have employees together, inevitably they’re going to end up talking about work,” Naranjo said.

The people strategy is clear: Foster and grow relationships between employees, and let them decide what activity is best suited to accomplish that. Sometimes, employee engagement programs force fun and don’t deliver on the intended outcomes.

To that end, there aren’t restrictions on using the money, Naranjo said. If two or more Ethena employees are gathering, “spend the money.”

“We’re optimizing for retention of high performers. We’re not optimizing for avoiding any kind of risk possible,” she said. “I’m not thinking about the one or two people who might abuse the policy. I’m thinking about the 50 people who are really gonna get along with this and stick around with Ethena.”

For a remote-first company, it’s the relationships that are invaluable. Strong relationships outside of work can stave off a misunderstanding that could perhaps happen over Slack or Teams.

“At the end of the day, my job is to empower our company success through our people strategy. It’s not make our employees happy no matter what,” Naranjo said.

Engagement activities. “We haven’t, in my opinion, been as progressive and innovative…as we could have when it comes to how we measure engagement,” Naranjo said, pointing to company-sponsored happy hours as an example.

Naranjo said HR-designed programs may yield a high percentage of employee participation, but she worries many attend because they feel pressured to do so and the impact of these types of events don’t actually impact employee retention. In her view, engagement should be measured not by one event, but a suite of perks and programs, of which the stipend is one.

Naranjo posits that employees can do a better job selecting activities with colleagues they might enjoy that would spur connection and relationship growth, and she doesn’t need to coordinate company-wide events that would do a mediocre job at that.

And about the office...The company originally downsized their office footprint, but after realizing no one was using the smaller office footprint either, they abandoned it altogether. Employees can request a coworking space membership if they feel they need one.