Reward and recognition is one of the hottest HR and benefits trends in 2019. This is definitely worth bearing in mind when it comes to setting your new budgets. Many set their new reward and recognition budgets in April, however this guide will apply to everyone. It’s also important to consider how you spend your remaining budget should you have any.
The statistics80% of employees would work harder for an appreciative boss and 70% would feel better about themselves and their hard work if they were thanked more by their boss, according to research by Glassdoor. Just 14% of companies provide managers the tools for reward and recognition, according to research by Globoforce.
How much do companies typically allocate?This can vary greatly depending on a number of factors. Some spend as much as 10% of payroll and some hardly spend anything at all. Industry research shows that in the US organisations spend around $90 billion a year on reward and recognition. This might sound a lot, but reward and recognition programmes are a fantastic, cost-effective way of boosting employee satisfaction and productivity.
The typical average is around 1-2% of payroll.
That said, this shouldn’t cover all aspects of your reward and recognition programmes, as some of the best ways of rewarding employees are actually free.
Should you allocate more or less than 1-2% of payroll? That depends on your company, its objectives and values. Some companies may choose to allocate more than this as they find it’s more cost effective. An effective reward and recognition programme can also be used to promote the company through social media and job adverts as a desirable employer.
Where should it be allocated?You might want to split your budget into two sections, what you spend on the rewards themselves and what you spend on communications. If you had a budget of £20k, a typical split might be £12k on reward and £8k on communications. Again, this is just an example and there’s no right or wrong way to split your budget.
How to make managing reward and recognition easySimple. Integrate your reward and recognition into your employee benefits platform. Doing this takes the stress off those higher up and allows managers to allocate reward and recognition budget. After all, managers know their team best and so they’re in the best position to choose how they should be rewarded for their hard work.
This doesn’t always have to involve financial rewards. Giving managers the choice to reward employees with non-financial rewards like a longer lunch break or allowing them to leave an hour early, all through their benefits platform, is a great option to have.
What if you’ve still got some budget left before you set new budgets?If you’re like many companies and you’re setting your new budget in April, you may have some reward and benefits budget left over. Maybe you’re falling behind on sales figures or productivity? Try putting it all into incentives and rewards. As mentioned, rewarding and recognising your employees will increase productivity and employee satisfaction.
How much budget you allocate to your reward and recognition programme, how you use it and how often is dependent on a number of things and can vary greatly from company to company. However, it’s important for all companies to invest in their reward and recognition. As mentioned, it’s one of the most cost-effective ways of boosting happiness and productivity!
