In the 20th century, it was thought that production equipment was a company’s most valuable asset. Fast forward to today, and you’ll find a unanimous agreement among business leaders that people are without a doubt an organization’s greatest asset, which is why more and more businesses are turning to employee rewards programs.
Recognizing that there’s an economic link between employee satisfaction and a company’s financial performance, organizations in every industry are tasking their human resources departments with developing strong employee reward and recognition programs that make their employees feel valued, appreciated, and engaged.
In this post, we’ll share 3 ways that investing in employee rewards and recognition programs can help you save directly on costs, maximize your team’s productivity, and improve your company’s performance overall.
Benefits of employee reward and recognition programs
1. Reducing turnover and recruiting costs
When a disengaged employee quits, replacing them comes at a significant cost.
The Society for Human Resource Management (SHRM) estimates the average replacement cost of a salaried employee to be six to nine months of their salary. The number only skyrockets as you look to replace higher salaried and specialized employees
Why is it so expensive to replace an employee? Because of all these associated costs:
- Recruiting, advertising, screening, interviewing, and hiring a new employee
- Onboarding the new hire, including training and management time
- The amount of time it takes the new employee to come up to speed
- Errors made by the new employee while they’re still in training
- Slower productivity of the new employee while they’re still in training.
The most common reason employees quit their job is because of the lack of growth opportunities at work and lack of recognition when they exceed expectations. When you invest in an employee recognition program that rewards employees for their hard work and makes them feel valued, you minimize the chances that an employee might leave and avoid these costs altogether.
2. Maximizing productivity and profitability
Research by Gallup found that disengaged employees cost companies $450-$550 billion in lost productivity each year as a result of poor performance and high absenteeism. This isn’t surprising. Do you really do your best work when you’re in a job you don’t absolutely love?
When HR departments do a good job of understanding how employees want to be rewarded and deliver on that, we see a direct impact on employee output. Rewarded staff are known to be more engaged, be more likely to meet their goals, report higher levels of job satisfaction, and do their best work.
Employee reward and recognition programs help employees feel better about their personal impact and contribution to the company, therefore inspiring them to do the best that they can.
With improved productivity, you can also expect to see increased profitability. Additional research by Gallup found that higher employee engagement levels can increase profitability by a good 22%. It’s not only productivity that goes up, but sales, as well as customer service, and positive reviews, all of which contribute to your bottom line.
3. Fostering a thriving company culture and employer brand
Employee recognition programs are extremely beneficial to your company’s corporate culture. When you regularly thank your staff for a job well done, teamwork and collaboration improve, and you soon find that your staff genuinely enjoy being at work.
Employee reward programs play a huge part in turning your staff into advocates for your company. Engaged, motivated employees who feel like they’re part of a family are more likely to help promote your employer brand.
They will happily refer qualified professionals in their network to your open roles, showcase your workplace and culture on social media, and spread a positive reputation for your company. In a nutshell, you get free and genuine marketing!
How to get started with employee reward and recognition programs
Now that you understand the benefits of employee rewards, what can you do to develop or re-evaluate your corporate rewards program?
There are plenty of killer reward ideas (both monetary and non-monetary) you can implement to motivate your team from offering additional days off to selecting an employee of the month, to offering quirky departmental awards, to having peers reward bonuses to one another. The best way to know what will actually work best is to gather direct feedback from your team through surveys or group meetings and then take it from there.
Employee rewards software are also gaining tremendous popularity for their convenience and flexibility in letting employees choose how they want to be rewarded for their achievements and allowing for peer recognition. Spend some time exploring these innovative tools to determine if you think they could be a useful addition to your business.
No matter what your industry or business, you can always improve your organization’s performance and profitability by utilizing the power of employee recognition and rewards.
Looking to step up your rewards program? Set up a time for an obligation-free demo of BucketList’s employee recognition software.