By Steve Bradbery, Ceridian Stored Value Solutions
During challenging economic times, some employers will think staff retention is not something that they need to worry about but, like good clients, the best employees will always have their pick of employers.
The most successful businesses are therefore those that worry about motivating staff as much as they worry about delighting customers. Whilst it may be tempting for employers to think they can save money by cutting the incentives budget, it is actually a false economy.
One study reported that 75% of employers accept that incentives raise morale (Grass Roots: “Corporate Faith in the Power of Incentives – A Research Report” April 2009), whilst another (Employee Benefits Research 2009: evaluation of and attitudes to benefits) found that 75% consider rewards for individual performance to be important to their staff. However, although employers see incentives as being desirable, some fear that adopting an incentive scheme will be expensive, particularly SMEs. This is a common misconception; in reality even a minimal budget provides significant return on investment when the scheme is managed effectively.
Traditionally employers have rewarded staff by giving them a ‘bottle of something’, cash bonuses or vouchers. The bonus often arrives months later in the payslip and is not memorable and motivating unless particularly significant. Commonly it gets swallowed up in living expenses. The bottle of something can often be unappreciated and does not encourage healthy living. Employees are considerably better motivated when they can choose how their rewards are spent.
A series of smaller rewards, handed out more frequently, can be used one at a time, or accumulated to make a larger, more significant purchase, perhaps something they wouldn’t normally consider buying for themselves. One of the easiest ways to give your employees regular and unexpected rewards is through a prepaid card. Steve Bradbery from Ceridian Stored Value Solutions, who have developed prepaid programmes for companies across a broad range of sectors including retail, travel, entertainment and manufacturing agrees, “I have no doubt, from working with many companies and organisations, that prepaid cards are the most effective way of motivating staff. The traditional ‘bottle of something’ is often inappropriate and small cash bonuses get absorbed into living costs. Prepaid cards sit in the purse or wallet and are spent on treats that are remembered.”
Most people will have now seen these cards: they look and behave just like a traditional debit card and employers can top them up electronically whenever they want to reward staff. They ensure the bonus does stand out and, unlike some vouchers, they can be used across numerous brands, meaning they are almost tailored to the employee. For example, if one of your team regularly eats out they could use their prepaid card for a meal with friends, whereas another employee with a passion for shoes could indulge it by spending their reward at a high street fashion store.
As with any reward scheme, it’s important to communicate it well. A recent study found that 57% of business leaders who felt employees didn’t understand their reward scheme experienced a drop in motivation. This doesn’t necessarily mean countless bulletins, meetings or emails, in fact it’s better to keep it concise and effective so that employees understand and remain engaged, but don’t become fed up with constant updates.
Employers are also realising that they need to invest in the company’s future by tactically choosing the behaviours to reward, and this too can easily be done with prepaid cards. It’s also important to change the incentives on offer frequently to keep them fresh and exciting and to run short term ‘one-off’ offers to encourage bursts of effort at critical periods. Timing is also a critical factor. The greatest productivity is gained when the desired behaviour is rewarded immediately and unexpectedly rather than waiting for traditional times such as Christmas, when bonuses are often expected regardless of performance.
The next consideration should be to establish and manage targets, which must always be set at a level which is challenging, yet achievable to avoid disenchantment among your workforce. This may mean being prepared to lower overall expectations of performance during tough economic times and introduce smaller rewards at more frequent intervals.
At Global Prepaid Exchange, we encourage businesses to think about staff motivation in a similar way to customer loyalty programmes. Retailers design programmes around customers to let them know they’re valued, and they’re targeted so the right customer receives the right offer or reward. It should be no different with your staff, and the principles for development using prepaid are exactly the same. It’s also important not to stop incentivising during tough economic times, but don’t assume cash alone will be enough to motivate your staff. Do keep your employees top of mind, communicate effectively, and do focus your spending on the appropriate incentives package.
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