Inflation has reached a forty year high annual rate of 8.5% in the United States - creating turmoil that has gone unseen since the 1980s. This statistic alone is proof that employers and leadership are focusing on optimizing and operating their business more efficiently. In addition to impacting the business, inflation is affecting their employees' purchasing power and their engagement within the company.
Due to the current global crisis and unpredictable economy, many companies are unsure how to balance wages, salaries, benefits and rewards. “According to Payscale, fewer than one in ten US organizations plan to raise wages 5% or more over the next 12 months.” If this is the case than employers must construct a plan to reward, recognize, and incent their employees.
New research from the IRF, Academic Research in Action: Non-Cash Rewards in a Period of High Inflation, shows that non-cash rewards are a great way to keep employees engaged. Keeping employees engaged and motivated within the workplace will result in a higher employee retention rate which in turn saves on recruitment costs, training, onboarding, and retention efforts.
The IRF study also states that within the employee recognition space “Firms should always aim for a balance of cash and non-cash incentives, but in an economy that is highly unpredictable – even in the short term – remember that cash rewards are perfectly suited to evaluation by calculation. Consider rebalancing your incentive system to include more non-cash rewards that are geared to a person’s likes (to trigger feeling) yet novel enough that the recipient’s knowledge of the reward type won’t turn feelings into calculation.”
The depth and impact that non-cash incentives have on an individual are great, because anon-cash reward can be associated with an emotional feeling. Non-cash incentives can be more personal, meaningful, and resonate more deeply with the recipient. It can have a lasting effect.
These non-cash rewards can be implemented in several ways. Short term solutions can consist of digital and physical gift card rewards. While creating an employee platform to interact with employees, recognize milestones, reward great performance throughout the year is also a simple and valuable option.
Alternatively, adjusting current benefit packages is another option, but can be a bit more complex as it involves legal constraints and regulations. Benefit increases also generate long term liabilities for companies which also must be taken into consideration.
If you’re still looking for ideas on how to: enhance the employee experience; increase employee engagement; improve employee retention; or boost your corporate culture contact a Marketing Innovators specialist today.