the enduring popularity of plastic...
How can you incentivise and reward employees in a way that's both highly personalised, but still offers them freedom of choice?It's quite the conundrum. Usually, a few complimentary words, or a congratulatory email, are nice and personal ways for managers to thank an employee for a job well done - but when it comes to giving something a bit more enduring, there's more to be done.
For companies of all sizes, the answer is increasingly a gift and, more precisely, a gift card. Provided as a spontaneous reward, or as part of an incentive scheme to promote employee engagement and motivation, they offer a whole range of advantages. Cards can be personalised to suit the employee, and can offer a degree of choice over where they're spent if you choose multi-retailer options. They’re also an ideal way to bridge the age gaps and interests in today’s multi-generational workforce.
Gift card spending on the rise
Our own research has found that 75% of organisations in the UK are using gift cards to incentivise and reward their staff. Demand was also reflected in a separate study which revealed that gift cards were the preferred form of reward at 67.7% - well ahead of electronic (34%) and drink-related gifts (22%).
The number of companies that gave out gift cards in 2016 rose by 37% over the previous year, and although they're widely used by larger companies, the appeal of gift cards also extends to SMEs. In a Sodexo study, SME leaders revealed that they planned to significantly increase spending on rewards that would improve employees’ work-life balance over a two-year period. There was a 15% increase in those planning to reward employee performance with bonuses, couhers and gift cards, and a 17% rise in those intending to bring in schemes to increase employee purchasing power. The numbers don't lie - gift cards aren't going away!
Business benefits for all
The flexibility of gift cards makes them ideal for budgets of all sizes. While research shows that larger companies can afford more lavish rewards, with the proportion of those handing out gifts worth more than $1,000 rising from 1.3% of the total to 6.2% from 2015-16, nearly 70% of gifts cost less than $100. Gift cards have the big benefit of coming in multiple denominations - from the small everyday reward to the big end-of-year blowout - and giving people power to spend how they please means there's no risk of an expensive gift going to waste.
Along with large organisations, SMEs are also reaping the benefits of the gift card phenomenon. We conducted a study that found that 88% of SME leaders in seven countries noted an improvement in the general atmosphere at work after rewarding performance through bonuses and gift cards. On top of that, 71% of respondents said that their company’s revenue had increased, and 72% noted a drop in absenteeism. That's a lot of impact from a little card!
So, what’s the secret to a successful incentive?
Put simply, it needs to tick three boxes – buy-in by employees, an element of surprise, and a wide choice of gifts.
For an incentive programme, buy-in is best achieved when management clearly explains the overall objective to employees - and then involves them in setting the targets or KPIs that will lead to rewards. Once the scheme is up and running, collecting employee feedback will also boost its effectiveness. By creating a feedback loop, the programme will always stay relevant to people’s lifestyles and aspirations.
When it comes to selecting gift cards and rewards, the element of surprise is particularly valuable, because surprises live longer in the employee’s memory. In fact, an emerging market segment is known as ‘surprise and delight’ rewards, whose popularity is backed by hard scientific evidence. The pleasure centres in the human brain react more strongly when pleasures are unexpected, according to researchers in the United States. Gift cards can be the perfect surprise reward - ordered in bulk, they can be kept back and handed out on-the-spot by managers. This is also a great way of regulating how many rewards are being handed out.
Finally, the choice of gift card has also become a particularly hot topic, given the demographics of today’s workforce. Key to the success of any scheme is the ability to offer a selection of gift cards that's broad enough to incentivise and reward employees of all ages and backgrounds.
Bridging the generation gap
Indeed, with millennials working alongside baby boomers, what kind of gift card appeals to both 20-year-olds and 63-year-olds? Growing in popularity amongst millennials are e-gift cards, which are easy to use and can offer almost unlimited choice. By contrast, studies indicate that older generations prefer the more personalised choice of a card attached to a particular retailer.
Aside from generational differences, a combination of our know-how and survey results has identified very distinct employee profiles in a typical workforce. The range of profiles underlines the need for variety gift solutions, in order to offer meaningful rewards.