The End of Swag?

Leaders have started cutting back on nonessentials like corporate swag. But even this step has risks.

At first glance it looked like an ordinary company booth at an industry conference: Two salesmen in khakis and polo shirts embroidered with the company logo stood at a table. There were company-branded billboards behind them, and, on the table, brochures outlining the firm’s services and clipboards for gathering the contact details of prospective new clients. But something was missing—something key to getting passersby to stop and talk: corporate swag. 

In yet another sign that leaders are hunkering down for a prolonged economic decline, companies are increasingly curtailing nonessential costs such as the key chains, stress balls, T-shirts, notebooks, and other items routinely given away at industry conferences, job fairs, and other events. Victoria Baxter, a senior partner in the ESG & Sustainability Solutions practice at Korn Ferry, says one of her clients has ended their custom of sending branded hoodies to newly hired remote workers as a way to welcome them to the company, for instance. One press account, meanwhile, described how one company appointed a “swag czar” who must approve purchases of logoed T-shirts, hats, and other items. 

Marketing is often one of the first areas where leaders look to cut costs during a downturn. While eliminating freebies may seem like a harmless way to save money, experts caution that swag does serve a purpose. Ann Vogl, a senior client partner in Korn Ferry’s Marketing Officers practice, says corporate swag helps instill pride and a sense of community among colleagues—particularly important, she adds, while most employees are still hybrid or remote. She suggests that cutting back on swag could send the wrong message: “Anytime leaders complement bad economic reports in the media with internal cutbacks, they are sending a message to employees that they have a concern about their financial results now or in the future.” Put another way, cutting swag could make the company look cheap and leave employees wondering why it can’t even afford t-shirts. 

To be sure, swag isn’t the only expense being cut. Nearly every day the business media reports that yet another company is laying off workers. These stories have become so common that job-search website LinkedIn keeps a daily running tally of them; it’s regularly among the site’s most-read posts. Business travel and in-person conferences are also seeing cuts, leaders having realized how much money they saved in those areas during the pandemic.

Against that backdrop, the lack of swag doesn’t seem like such a big deal. Certainly, lots of employees couldn’t care less about it. Cabinets, desks, and closets across the country are stuffed with company-branded coffee cups, coasters, mousepads, and clothes that have never been used or worn, says Alina Polonskaia, global leader of Korn Ferry’s Diversity, Equity, and Inclusion Consulting practice. During an economic downturn, when employees are reading about layoffs and hiring freezes and worrying about job security, “what they crave most is recognition and attention,” she says. A recent survey by software company Workhuman and polling firm Gallup show that only one in three employees feels they belong at their organizations. Moreover, 81% of leaders say employee recognition isn’t a company priority. 

That’s why it’s important for leaders to look at the impact of cutting swag not just on costs, but also on employee morale, says Mark Royal, a senior client partner for Korn Ferry's Advisory practice who specializes in employee engagement. He points to recent Korn Ferry surveys that show declines in employee optimism regarding company prospects for success post pandemic. Confidence in the future is key to engagement and retention, notes Royal, and leaders need to see cutting swag in that context: How does it help the company’s broader strategy and competitive positioning? “For many employees, swag reinforces the idea that they are playing for a winner and that the organization values their contributions,” says Royal. Swag might even help performance and productivity, he adds. “Some discretionary expenditures may be wise investments,” he says, “if they promote greater discretionary effort from employees.”