Should you Outsource your Rewards and Recognition Program or DIY?

If you’ve been doing the work to build a high-performance culture and boost employee engagement, you know that implementing a strong employee rewards and recognition program is a big part of the undertaking. But should you build your program in-house or outsource it instead? In this post, we’ll give you some insight into why HR teams choose either option to help you figure out which one makes the most sense for your organization.

The case for building your employee recognition program in-house 

+ Building a completely tailored program for small teams

Companies that choose to build their recognition programs in-house prefer this because it helps them avoid any “one size fits all'' situations with vendors that aren’t true to their own unique type of company culture. You might choose to DIY so that you’re able to tailor your program to the fullest degree, picking and choosing the components that you want to include, like offering tangible corporate gifts on special occasions or organizing annual employee awards. 

+ Saving on outsourcing costs 

The DIY approach makes sense if you have a small business since your administration costs will be minimal and quite bearable rather than investing in employee recognition software. 

The challenges of building employee rewards and recognition programs in-house 

Though going with the in-house option gives you complete ownership of your recognition program, you’re bound to run into at least a few of these challenges:

- Administrative costs 

The biggest challenge you’re likely to run into if you build your rewards and recognition program in-house is in the manpower it takes to run the program. As soon as you add more components to your program, or as your team grows, you can expect to see your administrative costs and time investment increase significantly.

You can end up spending plenty of your typical workday on tasks like:

- Sourcing local suppliers for employee rewards

- Negotiating corporate discounts with suppliers 

- Putting in orders for employee gifts 

- Arranging special experiences for your employees to enjoy as a reward

- Creative brainstorming to find new ways to tweak your program to maximize engagement

- Manual time spent tracking participation and engagement

All these tasks can end up being extremely time-consuming that you’d end up wishing there was a way to automate them instead. 

- Low participation rates 

Many companies that prefer the DIY approach to building a rewards and recognition program often suffer from the program experiencing low participation rates and high failure rates. Without collaborating with vendors and making use of their purpose-built employee recognition software that integrates well into your existing company communications like Slack, it can be quite difficult to keep your program top-of-mind. And whether you use that technology or not, if you slip in prioritizing the program among your endless to-do list of HR priorities, it becomes too easy for the program to lose its momentum. 

- Poor suitability for hybrid workforces 

Building your employee rewards and recognition program in-house may have worked well in the past, but if your company is transitioning over to offering hybrid working arrangements, you’ll soon find that your program might not translate well when your team is distributed. When your program requires staff to be in-office to experience moments of celebration or recognition, then you risk having plenty of staff feeling left out. This can cause a huge disconnect to your company culture. 

 - Difficulty in tracking program performance 

One final thing to consider with the DIY approach is what your plan is for tracking its performance and impact. You’re kind of on your own for finding technology that helps you manage your process, and looking for performance indicators that can prove that your program is working. 

The case for outsourcing your employee rewards and recognition program 

If we consider all the above challenges of building your rewards and recognition program in house, it’s easy to understand why so many HR managers are choosing to outsource their programs instead. 

• Minimizing administrative costs 

The biggest benefit of outsourcing your program is minimizing all the administrative and time costs covered above. Outsourcing your employee rewards and recognition program helps you free up staff time and rest assured that the vendor in charge of managing the program and doing it well since that’s their only focus. All you have to do now is check in on the program regularly and make sure you’re promoting it to your workforce. The rest is off your plate! 

• Streamlining HR processes 

Rewards and recognition software vendors help you streamline plenty of HR processes with the use of their technology. Software like Bucketlist helps you streamline giving mentions and rewards to staff around their work anniversaries, birthdays, or other performance milestones. They also help you bring peer to peer recognition and public recognition alive by making the process of giving recognition between staff members extremely easy.  

• Ability to track engagement and program performance 

The beauty of outsourcing your rewards and recognition program to a software vendor is that you get access to real-time, weekly, and monthly reports to get an idea of how your program is performing. You’ll be able to count how many times employee recognition has been given and received, and get insights into which rewards are the most popular for your employees. All of these reports can help you justify and assess the return on your investment. 

• Suitability for the modern and hybrid workplace 

If your workforce is large, global, multi-generational, or hybrid, then it makes the most sense to implement a rewards and recognition tool. The use of rewards and recognition software centralizes all moments of recognition and rewards in one central place for all employees to see so that there isn’t that huge disconnect. Most providers offer a format similar to popular social media platforms, allowing staff to mention, tag, message, and publicly recognize one another with ease for all to see, whether they’re logged in in-office, from home, in China, or Brazil. 

• Creative variety of employee rewards

Instead of having to spend your time coming up with creative and meaningful rewards for your staff, most employee recognition platforms on the market already have this figured out. Using a points system, rewards and recognition software allow your employees to earn points and mico-bonuses for their completed projects, anniversaries, birthdays, reaching company goals, and other achievements and then choose how they want to redeem their points. Pre-loaded with standard rewards from experiences, gift cards, the choice to donate to charity, music lessons, and travel vouchers, these recognition platforms excel at giving your employees the power of choice in how they want to be rewarded. 

Considerations for outsourcing your employee rewards and recognition program 

• Cost of outsourcing 

One reason why you might prefer to build and manage your rewards and recognition program yourself is to avoid the costs of purchasing software or working with a vendor. Companies with small teams might not feel ready to make that investment if what they’re doing in-house is working for them. To decide if outsourcing the function is worth the price, you’d need to do a cost/benefit analysis, comparing the cost of the program with all your current administrative and time costs. 

• Technology challenges 

Integrating rewards and recognition software can come with its own set of challenges and a couple of hidden costs that you need to work out. For one, you’ll need to spend time training your workforce on how to use it. You might experience a period where your team is still coming up to speed on how to use the technology to its fullest potential.

Since technology tends to fail us here and there, you might also run into days where integrations aren’t working well, or when certain features of the platform are down for any reason. Choosing a provider that offers strong support and customer service is a good way to think ahead. 

Whether you choose to outsource your employee rewards and recognition program or build and run it in-house is totally up to you and will depend on your team size, your company culture, your budget, and the goals of your program. There’s certainly no right or wrong, but we hope this post has helped give you some insight into which option is right for you.