Employee incentive programs aren’t cheap. Whether you’re sending 30% of the sales floor to Antigua or handing out cash bonuses from a company safe, you’re going to invest a big chunk of your company’s annual budget into recognizing and rewarding your employees. When every major company seems to be paying top-dollar for these flashy perks, it can feel like you have no other choice but to shell out as well. Where are the cost-effective employee incentives?
The truth is, “cheap” employee rewards aren’t worth your money. A good rewards program is a tangible representation of how much you value your team and appreciate their hard work. Switching to inexpensive reward items or incentive schemes doesn’t look very impressive to the employees you’re trying to retain.
Knowing this, the most effective way to reduce your overall costs is to invest in incentives that pay for themselves. ROI matters far more than initial program cost. At the end of the day, the best incentive programs actually end up saving money by how much they improve retention, productivity, and engagement.
6 Tips For Cost-Effective Employee Incentives
If your existing program isn’t pulling its own weight, try using the following 6 tips to pump up your ROI:
1. Go for a customized approach.
The standard employee incentive schemes are old news to most of your team members. They’re not motivated by points systems anymore. They already know they have a slim chance at earning that annual vacation. To start motivating the vast majority of your staff, you’re going to have to take a customized approach to rewards.
Invest in an incentive program that’s entirely unique to your company. Take things a step further and set goals and rewards that are unique to each of the major teams within your company. When employees see you investing in making this program tailored to their needs and wants, they’ll be far more likely to increase their participation.
2. Choose high-value rewards.
You’ll never succeed if you try rewarding your employees with devalued currency. What’s interesting is that many of the most expensive rewards are actually not very high-value in your employees’ eyes. Think about it. If only 5% of salespeople meet President’s Club each year, how much value does that reward have for the remaining 95%?
Choose reward items that your employees really care about. Whether that means opening a company store, offering name brand gear, or providing limited edition branded apparel, you need to set up your rewards system with items that hold a lot of social currency for your employees. Bank on bragging rights. They’re worth far more than plane tickets at the end of the day.
3. Consider hidden costs.
Most standard employee rewards programs come with hidden costs attached that can eat into your ROI. Things like tiered pricing structures, winner reward limits, and fine print fees should be avoided at all costs. If your current employee rewards program is nickel-and-diming your company, it’s high time to get out of that contract and seek a partner with more integrity.
The best employee rewards firms set cost estimates that are accurate, and they price your rewards in a linear fashion according to how many employees you reward and how pricey those reward items are. It’s that simple.
4. Stay on top of your timing.
Even the most incredible incentive program takes time to get off the ground. When a program is set up to reward a majority of employees about every 4-6 weeks, it can take around 6-9 months before you start seeing that big wave of participation. If you take the grassroots approach, you’ll be banking on bragging rights and word of mouth to get more people involved in the new program. Give it time. You might not see any return on your investment within the first two months… but if you wait it out through the first year, you might be glad you did.
5. Consider everything you’re saving.
When it comes time to renew your inventive program and judge whether or not it’s been cost-effective, don’t forget to balance the annual cost of the program against everything you’re saving. If your company was bleeding retention costs last year, that’s an easy number to compare with how things are going today. Compare your overall profitability year-over-year, and consider whether or not your incentive program played any part in that outcome. It’s almost impossible to place a dollar value on employee engagement. But how much are you saving in absenteeism, met deadlines, or improved customer experience? These numbers all matter a lot when it comes to deciding to repurchase an incentive program.
6. Know when to re-evaluate.
Good incentive programs increase in ROI over time—that’s what they’re designed to do, after all. If you’ve invested in a fully custom program with high-value rewards and you’ve given the program enough time to take hold, you should start seeing its value. If things aren’t working out, now is the time to consider revamping the program or investing in a different system of rewards altogether. If you’d previously handled all rewards in-house, it might be time to consider outsourcing. One of the best ways to keep your employee incentive costs low is to realize when it’s time to move on.
If you’re currently trying to refresh, revamp, or revitalize an incentive program, the best tip we can offer is to partner with a company with a track record of success. Most CEOs don’t have the bandwidth to design, implement, market, and manage a full-scale incentive program for the time it takes to see results. Give that burden to someone else. Preferably, someone who knows what they’re doing. You might be investing a little more up front by outsourcing—but as we’ve already seen, if the program pays for itself and then some, you’ll be way better off in the end.
At Inproma, we believe in high-value rewards that are also worth their weight in gold. Our fully custom employee recognition programs drive engagement and help companies motivate more staff members than ever before. Looking for truly cost-effective employee incentives? Let’s talk.