The role of incentives and rewards in attracting and retaining staff
Danni Rush, chief customer officer at Virgin Incentives
The world of business is becoming increasingly competitive, particularly when it comes to recruitment. Latest figures from the Office for National Statistics show a record 32.9 million people are in employment, with the unemployment rate remaining low at 3.8%.
It’s an employee’s jobs market, and jobseekers increasingly scrutinise job offers before accepting a new role. For employers, this puts more emphasis on the need to differentiate their offering beyond the basic wage packet. These marginal differences can provide the competitive advantage needed to attract and retain the top talent.
However, with staff incentives and rewards and employee benefits now commonplace HR practice, how can businesses stand out from the crowd? Equally, how can they achieve this without breaking the bank? Here are a selection of tips to ensure your incentives programme competes in a fierce market.
Year-long rewards and mental health
One possible solution is to consider providing staff rewards and incentives at different points throughout the year, rather than reserving them simply for traditional gifting periods such as Christmas.
January is a great example of an alternative time of the year to show staff your appreciation, and is clearly desired by UK workers. In the latest Virgin Incentives survey of 2,000 UK workers, we found that half (49%) would be open to the idea of a reward in January over Christmas.
January is often a difficult time of the year for some and is typically when staff might start to look for a new job – take Blue Monday for example on 20th January. More than three quarters (78%) surveyed in our research identified this as the primary reason why they would support the idea of January rewards, suggesting it would help lift their spirits on their return to work. Meanwhile, two in five employees (38%) believe it would help combat post-Christmas blues.
Offering rewards in these off-peak periods can act as a useful staff retention tool to help maintain a happy, focused and productive workplace over a sustained period of time. It could equally help support with mental health issues, with more than a quarter (28%) of UK workers valuing January rewards for this reason.
And from a financial perspective, it makes sense for employers to consider January rewards as part of their HR strategy. During off-peak periods, staff rewards may well be cheaper and also easier to source. Year-long rewards can also help businesses remind staff that their contribution is valued all year round as opposed to one or two months of the year. This can promote happiness and loyalty among staff, as well as helping to create brand advocates out of them - in turn supporting staff recruitment.
Adapting your staff incentives and rewards
It’s not just a simple matter of offering rewards and incentives throughout the year though. Employers will need to consider carefully the profile of their business and the profile of employees they currently hire or are targeting.
Our research shows businesses must adapt their staff rewards and incentives accordingly. For example, a January reward is most popular among young employees, with two-thirds (62%) of 16-24 year olds open to the idea compared with employees aged over 55 among whom that figure almost halved to just 34%. Similar regional differences were apparent, with workers in the North East (38%) and Scotland (39%) least likely to welcome a January reward over a more traditional Christmas one, rising to 61% of workers in Greater London.
It’s clear employees know what they want, and their background, profile and working environment can influence their preferences. They are also becoming increasingly savvy and bad rewards or incentives can be received unfavourably, resulting in reactions ranging in severity. They can damage an employee’s relationship with staff, potentially helping them on their way out of the door. A fifth (21%) of UK workers admitted receiving bad rewards, with some (11%) reporting a ‘sexual’ connotation, and others (10%) accusing employers of gender stereotyping or giving political rewards (9%). It’s important employers know their audience and offer rewards existing or prospective staff value, including some of the most popular among UK workers: financial bonuses (82%) and extra vacation days (78%).
With the turn of the new year, employers have a great opportunity to assess their current suite of staff rewards and incentives, and consider how they can be optimised to assist in attracting and recruiting talented employees. Finding a selection that works for your business and identifying ways to differentiate your offering from competitors in a meaningful way could be the solution to your recruitment challenges in 2020.
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