Voices in Leadership • 6 MIN READ
Invest in Your Managers Before Your Perks Budget
MAR 18, 2026
Perks attract candidates but do not retain them. One Head of People explains why she redirected her discretionary HR budget from benefits to manager development.
What perks actually do
Perks matter in the first few weeks of a new role. A well-stocked office, a gym allowance, or a generous lunch budget genuinely improve early impressions. After that, their marginal impact on engagement and retention declines sharply. Research from Gallup, Deloitte, and numerous academic studies consistently finds that the quality of the relationship with the immediate manager is the dominant predictor of whether an employee stays and how effectively they work. Perks cannot compensate for a poor manager. The reverse is also true: a great manager can sustain high engagement even in an organisation with an average benefits package.
Where I redirected the budget
When I moved £80,000 from our perks budget into manager development, I was prepared for a reaction from employees. The reaction from managers was immediate and positive: they had been asking for development support for years. We ran a structured 12-month programme combining external coaching, peer learning groups, and 360-degree feedback surveys. Within 12 months, team engagement scores for managers in the programme had increased by an average of 11 points. Voluntary turnover in those teams fell by 18%. No perk has ever produced numbers like that for us.
