We’ve reached that time of year when HR teams start planning end-of-year reward and recognition. This year, with the rise cost of living still biting hard, people teams must double down on making sure end of year non-salary recognition and reward contributes toward both employee financial wellbeing and motivation.
Every business will need to make important judgements to ensure that they celebrate the contribution of their people in a way which makes them feel valued. Equally, they must think about how they can sustain the feelgood factor, so they don’t just finish the year strongly, but carry momentum through the rest of the year.
At Edenred we recently surveyed 2000 UK employees to find out what they want and expect from rewards and recognition. Taking into account their views, here’s how you can deliver the right, practical level of reward that will their needs this end of year and beyond.
- Make reward relevant
Economists warn the cost-of-living crisis will rumble on through 2025. Inflation remains the highest in Europe and the cost of everyday essential goods is still rising, just at a slightly lower rate than before.
Christmas will no doubt be a tough one for many this year: for example,18% of employees will borrow money to afford presents.
In this context, end-of-year reward which reflects employees’ priorities matters a great deal. For many families, reward that makes food more affordable will be much appreciated and help with the cost of Christmas.
But it’s not necessarily the value of what you provide as a reward that counts. The majority of employees say they would be happy with an end-of-year reward worth between £21-50.
A simple cash addition to the pay packet is likely to fall flat though; many won’t equate the money given to a specific purchase, something which makes the reward less memorable.
What really matters is offering choice and evidence of thought which combine to give a positive recognition experience to your employees.
As many as 70% of employees say they’d like to choose their own reward by receiving vouchers or gift cards, for example, and more than half (58%) would like to receive something other than cash at year-end.
- Choose digital over physical gifts to meet the needs of every employee
At a time when hybrid, remote and non-office working models are increasingly the norm, the question of how you get your reward to each employee is a critical point to consider.
Hampers, wine, and chocolates may have been easy end-of-year gift options in the past but today, digital reward and recognition is what employees expect.
It also works best for employers, as digital rewards are easily distributed across a dispersed workforce, whether they are at the office or at home. They also give you the opportunity to personalise messages and the reward value while ensuring each employee receives the intended reward – something which isn’t guaranteed with physical reward.
Digital rewards also ensure that employees can redeem their gifts without fuss at the right moment for them, and without the risk of losing vouchers or gift cards.
- Think beyond the end of this year
At a time when employers are worried about staff leaving amid pay freezes and skills shortages, the case for a consistent, year-round reward and recognition programme is clear.
Sadly, this has not resulted in greater recognition from employers though. Employees feel only 50% say thank you enough and just 38% give recognition.
Only 32% said they have been rewarded for their efforts. This is a warning sign that employers need to address urgently if they want to keep employees engaged and reduce staff turnover during still-turbulent times.
So with the cost-of-living crisis predicted to carry on through to 2024, the key is to follow through beyond year-end with a consistent strategy that will go some way to keeping employees engaged and motivated throughout the year.
This should include a marketing and communication plan that doesn’t just cover end of year but the rest of the year too. The most effective way to do this is by getting support and advice from specialists in your marketing, PR, and digital teams. This will help you build a programme that reinforces your employer brand and your cost-of-living response.
End of year is always important, this year more than most. But remember throughout your planning that your scheme should not just be a short-term reaction to current circumstances. Your aim should be to make reward and recognition part of your organisation’s DNA – fully aligned to what your business is trying to achieve long term, and fully focussed on ensuring that employees buy into that vision by providing all the motivation and support they need.
