The HR World Blog featured an article in March that discussed the results of a new Deloitte survey which found that the economy is forcing organizations to think about cost reductions and customer retention. For years research has shown the real impact of employee incentive programs in various areas: lower hiring costs, increased employee loyalty and a rise in employee motivation and workplace morale; all of which foster customer loyalty in the long run. Applying these cost-saving concepts to your company by implementing an incentive program makes more sense than ever given the economy.
Lower Your Hiring Costs
Incentive programs attract high quality employees and help to retain talented employees. An Incentive Central white paper asserts, “Overall, higher levels of motivation and motivated performance translate into a 53% decrease in worker turnover.”
Employee incentives and recognition can be an important factor for employees when they consider other employment options. Even though the unemployment rate is rising, finding highly skilled or specialized employees remains a difficult task for human resource professionals. By arming your organization with a motivational incentive award program, you can substantially lower your hiring costs.
Increased Employee & Customer Loyalty
I previously discussed how having happy employees impacts the loyalty of both employees and customers. On average, when employee attitudes improve 5%, customer satisfaction jumps 1.3%, increasing revenue by 5%. New research conducted by American Express reveals that employees report their loyalty would increase if their employer offered ongoing employee incentive program featuring the option for employees to select their own incentive awards from an online catalog containing multiple kinds of items.
I felt this research resonates with what many current clients of mine are reporting. Employees who participate in an incentive program are motivated by different kinds of incentive awards and thus companies need to allow employees to work towards earning the incentive award of his or her choice. To make this possible, many different kinds of incentive awards should be available for employees to choose from.
Increase Employee Motivation and Workplace Morale
“In a tough economy, shared services leaders know that they have to not only deliver value, but strengthen relationships with their customers and with corporate to work effectively,” says Susan Hogan, a leader at Deloitte Consulting LLP. Incentive programs are a great way to strengthen a company's relationships while increasing employee motivation and morale. If implemented and monitored correctly,incentive programs utilizing tangible awards increase employee performance by an average of 22%. Team incentives can increase performance by as much as 44%.
By putting employee incentives to work for your company, you can help to reduce costs while retaining more employees and customers. Given today's economic situation, managers should take their time to implement or re-evaluate an incentive program to ensure the business is reaching its goals while achieving cost reductions.