In a competitive business landscape, maximizing employee productivity is a top goal for companies across all industries. Achieving this, however, is often more complex than straightforward.
According to one industry report, only 53% of employee time is spent on core productive activities. A different study by PWC found that U.S. productivity has risen only 1% annually despite employees logging more hours than ever before.
In the U.S., only 64% of employees claimed to be satisfied with their jobs (well below the global average of 70%), indicating that falling employee satisfaction is another issue that can lead to curtailed productivity, a lack of engagement, and low retention rates.
Data points like these should prompt a critical evaluation of how businesses manage and optimize employee performance. They should also prompt companies to rethink how to motivate their greatest asset. According to the Brandon Hall Group, 53% of organizations said that a perceived lack of recognition and appreciation hurt their ability to retain top talent.
Other factors like organizational culture, employee engagement, technology use, and management styles also impact retention. In an era where work-life balance is increasingly important, addressing these elements is crucial for business success and employee satisfaction.
It’s time for businesses to consider other approaches to boost retention and productivity, including travel rewards designed for and targeted to employees.
Implementing an employee rewards program can help companies leverage their human capital more fully by tapping into their natural desire for recognition and acknowledging their achievements with appealing and high-value travel benefits.
Addressing the Challenges that Impact Retention
Employers face various pressures that impact retention, some of which can be alleviated by an effective employee rewards program. These include the persistent effects of inflation, alongside the sustained preference among employees for remote work arrangements. These challenges are part of several major trends that have disrupted workplaces worldwide in recent years, including:
- The Great Resignation: The Great Resignation peaked between November 2021 and April 2022, resulting in approximately 4.5 million people quitting their jobs monthly. Although resignations have returned to 2019 levels, it’s a warning signal to employers that they risk losing their talent if employee concerns are dismissed.
- Quiet Quitting: Quiet quitting can be summed up as doing the bare minimum and nothing else. Workers are doing their jobs but not going the extra mile to take on additional projects or work overtime. According to Gallup, 50% of the U.S. workforce comprises “quiet quitters.”
- Return to the Office: The pandemic saw most office workers going remote during stay-at-home orders. With no commuting time and lower costs, workers have resisted returning to the office. One of the most compelling statistics is that 57% of workers said they would consider quitting if forced back to working in an office full-time.
Given these prevailing trends, it’s clear that employers must take action to address retention challenges. A report by Gallup suggests that organizations should aim for a turnover rate of around 10%. Yet in 2021, the U.S. employee turnover rate soared to 47%, underscoring the urgent need for employers to implement compelling motivation and retention strategies.
There’s also the issue of recognition. Businesses can no longer rely solely on traditional incentives, like salary and benefits, to foster employee loyalty. A study found that 79% of employees said increasing recognition rewards would increase their loyalty to their employer.
The message from employees is indisputable: a lack of recognition is a deal-breaker. Without it, employees are prepared to leave in search of environments where their contributions are acknowledged and valued.
Why Incentivizing Employees Delivers Rewarding ROI
Employee rewards programs are not a panacea for all workplace issues, especially concerning fundamental aspects like pay or the demand for remote working options. However, when implemented effectively, these programs can yield significant benefits. While they don't directly resolve issues of a toxic work environment, they do play a crucial role in enhancing employee engagement and motivation, leading to tangible improvements in overall workplace dynamics and productivity.
- Performance: According to Gartner, well-designed recognition and rewards programs drive an average employee performance increase of 11%.
- Productivity: Stats show that more frequent recognition directly impacts productivity, with almost 77% of employees agreeing to be more productive if their efforts were rewarded.
- Engagement: The engagement issue can also result in quiet quitting and tons of wasted potential. According to one study, employee engagement was 14% higher in companies with defined recognition programs.
- Retention: The cost of high employee turnover is significant, with each resignation costing thousands in recruitment, training, and onboarding. In a survey of HR managers, 91% of managers agreed that employee rewards programs increased their retention rates. Another study showed that turnover rates dropped by 31% in companies with defined recognition and rewards initiatives.
Businesses are acknowledging the importance of employee recognition programs. Research from Deloitte indicates that companies invest $46 billion annually in these initiatives globally. Yet it’s surprising that 87% of these companies don’t track the returns.
In essence, the benefits and returns of incentivization are clear, but they demand recognition of their nature as a long-term investment. The actual value of these programs is often reflected indirectly in metrics such as employee satisfaction, retention, and productivity rather than immediate financial return.
The Path to an Effective Employee Rewards Program
A considerable challenge for companies reevaluating their approach to employee recognition and rewards is developing a program that employees care about and will utilize. While employees highly value tangible rewards, these don’t always need to be financial. McKinsey research shows that 55% of employee engagement is driven by non-financial recognition.
Equipped with these insights, organizations can optimize their employee rewards and ensure these programs are both impactful and valued by their workforce.
Offer Rewards That Employees Care About
A key aspect to consider in developing a rewards program is the variety of rewards offered. Providing employees with options to select rewards that resonate with their preferences is crucial.
The Incentive Marketing Association reports that 65% of employees favor non-cash rewards to boost performance. These can include branded merchandise, gift cards, and travel, which has gained immense popularity. According to our recent series of reports called The Tipping Point for Travel Loyalty, based on a survey of US consumers, 48% say the most valued benefit of rewards programs is the ability to save money on travel. This trend is primarily driven by Millennials and Generation Z, who typically value experiences more highly than material possessions.
With our survey data indicating that 64% of Americans plan on traveling more this year than they did in 2023, the appeal of travel-oriented employee rewards is only poised to grow. The challenge for companies is to provide both choice and an adequate supply of travel experiences.
Getting Employees to Buy In
Even if an employee rewards program has a wide variety of options, including high-value travel options, and even if it can personalize those options to each team member and implement sophisticated recognition structures, it won’t be effective if employees don’t use it.
Building buy-in starts with the reason for rewards. Random rewards don’t work; they’re just confusing, and seniority-based rewards aren’t much better. Approximately 87% of employee reward programs focused on length of tenure. And while long service is vital to recognize, it does little to motivate.
From the employee’s perspective, any rewards program must have clear goals and give them the ability to control their own destinies. For example, rather than being awarded, employees may turn down a reward and save points to work toward an even greater reward later.
Creating a rewarding employee rewards program
The benefits of employee rewards programs are clear. Still, with the rise in popularity of non-cash rewards, companies must provide wide-ranging rewards tailored to their employees’ tastes, including high-value, high-appeal travel rewards.
As prevailing employee and work trends like the return to offices continue to develop, brands should seriously consider a rewards program. Implementing an employee travel rewards program will help your company meet its retention goals, boost employee engagement, and increase productivity at a time when all those goals can be critical competitive advantages.
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