CEOs are faced with challenges every single day. None is as difficult as the problem of employee retention.
Identifying the exact cost of employee turnover down to the dollar is a big ask—a question that could keep your accounting team busy for days. How much does one exiting employee cost your company? Multiplied over your entire retention rate, how much would those numbers change if you were to increase (or decrease) turnover by 1%? Where is the breaking point at which spending to prevent employee turnover pays off in decreased retention costs?
Nailing down the exact cost of turnover is the first necessary step to solving the retention puzzle. But even if you monitor retention costs on a monthly basis and broadcast results to all managerial staff, there’s a bigger problem left to solve. Which viable solutions are actually worth implementing to address the issue of low employee motivation?
If you’ve already offered bonuses, implemented KPIs, and provided stock options, it might seem like there’s little else you can do to get employees to stay. But we’d be willing to bet there’s one major area in which your company could still improve: incentives.
Incentives And Benefits Are Not The Same Thing
Benefits are crucial to attracting new employees. But beyond a certain threshold, they do little to maintain the employees you already have. Benefits are like ground rules. They provide a foundational basis for any employee who considers working for your company.
Whether you offer stock options, annual bonuses, free spin classes, or high-value dental and vision plans, these are all benefits that your employees will soon take for granted. They do have the power to influence your corporate culture, but they won’t hold much weight when an employee decides to walk out the door.
Employees see benefits as a given—and you should too.
Employee incentives, on the other hand, always feel special. They feel unique to your company. And when they’re implemented correctly, they feel earned. The best employee incentive programs provide extrinsic and intrinsic motivation for your team. Because they’re built on rewards that hold high value, good incentives never feel stale or expected.
If you’re looking to motivate employees to work harder while they’re under your watch, and to keep them around for the long term, you should consider investing in optimizing your incentive program. Nothing else will make as big a difference in your retention rates than helping your employees feel incentivized, recognized, and rewarded.
What Are The Best Employee Incentives?
Business blogs (and books) are full of specific recommendations for employee incentives. Cash days! Yeti coolers! Custom uniforms! Trips to Bali! The truth is, you can turn pretty much anything into an incentive. These items only gain power when they’re implemented thoughtfully within the context of a strategic system that maximizes personal and collective impact.
You won’t find a prescriptive list of employee incentives here. Instead, we’ll provide the parameters for selecting incentives that actually bring results for your team, right now. The best employee incentives are:
The debate between monetary and non-monetary incentives is decades old (and completely outdated). Monetary incentives may seem exciting in the moment—it can definitely be memorable to walk out of the office with $200 in cash after making a sale—but that satisfaction is fleeting. Non-monetary incentives come with fewer strings attached. They get closer to the heart of what actually motivates employees, instead of fueling them with more instant gratification.
Figure out what actually matters to your employees. Custom branded apparel can be a powerful incentive for the thousands of technicians working for Comcast, but might mean nothing to your team of insurance brokers. High-value rewards carry social currency. They’re steeped in bragging rights. Find those items that make your particular employees say “Wow! Where did you get that?” and build your incentive program from there.
The best employee incentives are awarded at regularly timed intervals. They’re tied directly to the achievement of measurable, meaningful, and motivating goals that each individual employee helped to set. They’re designed to provide the employee with a deep sense of satisfaction and not a fleeting feeling of excitement. In short, good incentives are highly strategic. If you’re not up to managing the details of a program like this, hire someone who is.
Most standard incentive programs fail because they only reward the top 5% of employees. To significantly increase your ROI, you need to identify which universal incentive items hold the most value, and which strategy creates the most motivation, for the biggest majority of employees. Once you arrive at this balance, you’ll be able to maintain your incentive program for years to come with minimal adjustment and see a significant decrease in turnover.
Nothing is standard when it comes to successful incentive programs. Cookie-cutter systems with standard reward items just aren’t going to cut it. If you want an incentive program just to say you have one, by all means. But when you’re actually trying to increase employee retention, you need a program that’s customized to your company’s unique values, goals, and needs. Create such a program yourself, if you can, or delegate that task to the professionals. A great employee incentive programs provider can help you customize a program that’s designed to get real results.
Employee incentives are anything but simple. The problems of high employee turnover and low employee motivation are monstrous, and consume a seemingly-endless amount of attention by leaders across industry lines. It only makes sense that the solution would be appropriately complex as well.
Designing, implementing, and maintaining a high-caliber incentive program requires more bandwidth than most CEOs have. But there is a way to simplify. By outsourcing your employee incentive program to a firm you trust, you’ll be able to reduce your personal effort and capitalize on decades of experience in the incentives industry. You’ll finally end up with a sustainable solution to the challenge of employee retention, and transform the experience of employees at your company for years to come.
At Inproma, we create fully custom corporate incentive programs that reduce employee turnover and increase company-wide satisfaction rates. If you’re looking for a partner who can completely transform your employee incentive system and produce real results, we’d be happy to discuss the particulars of your situation and figure out a plan together. Let’s talk.