A lot has changed in the workplace over the past decade.
It may be time you changed your rewards strategy, too.
The workplace is no longer the formal, inflexible place it once was. Over the past few years, structure has given way to greater flexibility in terms of when, how and where we work. And these days, it’s the norm to see employees settled in behind their laptops at their favourite coffee spot for hours at a time. In fact, the ‘coffice’ as it’s been dubbed is such a popular phenomenon that it must surely only be a matter of time before the term makes it into the Oxford English Dictionary.
But that’s not all the change the working world has seen.
- Artificial intelligence and automation are already making great strides in the workplace as they assume various roles and make way for others.
- Workplace management has changed significantly, with many organisations replacing hierarchical configurations with flat structures.
- The workforce has become a lot younger with Millennials (or Generation Y) estimated to account for 50% of the global workforce by 2020 and Generation Z having just entered the market.
- For the first time, CEOs are managing five generations of employees simultaneously: Traditionalists, Baby Boomers, Generation X, Millennials and Generation Z.
What’s more, the same CEOs are finding out that across the board…
A good employee these days is hard to find.
In fact, according to PwC’s 14th Annual Global CEO Survey, attracting and retaining the younger generations of workers is one of the biggest talent challenges being faced by workplace leadership. This is backed up by a recent CareerBuilder survey, which looked at global companies and found that around 45% of businesses are unable to fill much-needed positions due to the shortage of qualified candidates.
What does that mean for businesses?
- You need to create the kind of company culture that attracts top talent; and
- Once you’ve acquired the right employees, you’ll want to keep them happy because unhappy employees are a) less productive and b) more likely to leave, both of which have financial implications for your business.
Let’s unpack that second point for a moment. Gallup’s State of the Global Workplace study found that a massive 87% of workers worldwide are either not engaged or are actively disengaged. And if you’re wondering what they mean by these terms, here are the definitions as laid out in the report:
Not engaged employees are essentially “checked out.” They’re sleepwalking through their workday, putting time – but not energy or passion – into their work.
Actively disengaged employees aren’t just unhappy at work; they’re busy acting out their unhappiness. Every day, these workers undermine what their engaged co-workers accomplish.
The same study found that actively disengaged employees alone cost the US in the region of $450 billion–$550 billion a year, while Josh Bersin of Deloitte has said that “the total cost of losing an employee can range from tens of thousands of dollars to 1.5–2x annual salary”.
Note: These statistics may be US-generated (unfortunately, South African ones aren’t available), but you get the idea – losing top talent can have a significant impact on your company’s bottom line.
By creating a sought-after working environment, you’ll not only be able to attract top talent – Gallup defines them as engaged employees who “work with passion and feel a profound connection to their company” and who “drive innovation and move the organization forward” – you’ll be able to retain them, too.
One highly effective way to create engaged employees is to ensure a good total rewards package. According to international human resources association WorldatWork, this includes the following:
- Work-life effectiveness
- Performance management
- Talent development
And according to the Society of Human Resource Management, companies with an employee recognition programme in place show a 65% increase in productivity when they recognise their top performers.
A key element of employee recognition is having a rewards strategy in place – one that can be used to incentivise, recognise or surprise and delight your employees. And these days, rewards can include everything from cash, merchandise, vouchers and gift cards to travel and experiences.
But, which reward?
Given the global economic situation and ongoing rising prices, money may seem like an obvious choice. But, surprisingly, cash isn’t always king when it comes to employee rewards. In fact, according to Scott Jeffery’s study, “The Benefits of Tangible Non-Monetary Incentives” there are four reasons that non-cash rewards are the way to go…
Assigning a monetary value to non-cash rewards can be difficult, with the result that the perceived value of the reward can end up being higher than the actual value.
Cash can easily be lumped together with overall compensation. The same cannot be said of tangible rewards, which can make them more memorable.
While it can be tough to justify paying a large sum of money for a luxury item, give employees the chance to earn said item as a reward and it’s an entirely different story.
4. Social reinforcement
Non-cash rewards are a visible sign that an employee has achieved in the workplace. Plus, tangible rewards can be less complicated to talk about than cash rewards.
It’s also essential to take the current make-up of the workforce into account. Remember that statistic quoted earlier that by 2020, Millennials will account for 50% of the global workforce? The fact that this generation accounts for such a significant portion of the workforce – and with the even younger Generation Z hot on its heels – means that we must take Millennials’ preferences into account if we hope to have an effective rewards strategy. So, let’s take a short detour to find out who they are and what it is that motivates them.
The Y factor
They’ve been called lazy, entitled, and privileged. Been credited with introducing these gems (and many more) to the 21st century lexicon: ‘woke’, ‘sorry not sorry’, ‘the struggle is real’ and ‘said no-one ever’. And been dubbed (by Time magazine no less) as the Me Me Me Generation.
Millennials are digitally savvy, place a high premium on a work/life balance and are prone to job-hopping – one more reason to have a good rewards strategy in place. And just in case you’re wondering whether or not you qualify as a Millennial or not, in 2018, the Pew Research Centre officially declared this generation as all individuals born between 1981 and 1996.
So, what do we know about their workplace habits? Quite a lot actually, thanks to this PwC study, which found that:
- “Millennials tend to be uncomfortable with rigid corporate structures. They expect rapid progression, a varied and interesting career and constant feedback.”
- “Career progression is the top priority for Millennials who expect to rise rapidly through the organisation. 52% said this was the main attraction in an employer, coming ahead of competitive salaries in second place (44%).”
- “This generation are committed to their personal learning and development and this remains their first choice benefit from employers. In second place they want flexible working hours. Cash bonuses come in at a surprising third place.”
So, what does this mean for your rewards strategy?
Given that Millennials are so digitally switched on, and that cash is not their top priority, it’s clear that digital rewards are an obvious (and excellent) choice. And what could be better than an online shopping card that gives your employees access to an extensive mix of popular online retailers?
Here are four reasons to choose this type of reward for the younger generation:
1. They’re easy to use
It really couldn’t be easier for employees to redeem their rewards – they simply enter their payment details at the checkout point.
2. They offer choice
Online shopping cards guarantee rewards that employees will love. Why? Because they’re able to choose their own rewards.
3. They give incredible access
Online shopping cards can be used on any South African e-commerce site, as well as at informal trading outlets like markets, festivals and pop-up shops thanks to mobile payment apps like SnapScan and Zapper.
4. They’re cost-effective
There are no print, production or delivery costs when it comes to online shopping cards and they are as quick and easy to deliver as they are to redeem – perfect for the instant gratification generation.