As tough times drive down profits, businesses search for ways to slash costs. One target might be employee incentive and recognition programs. But according to experts, workers need to be motivated now more than ever. Maintaining these programs could be crucial to your company’s success. And industry experts report gift cards are often the motivational tool of choice.
Many workers lucky enough to still have a job are shouldering an increased workload, often for the same or even reduced compensation, and must deal with the anxiety of an uncertain future. Incentive industry experts say today’s overwrought workers need to know that their efforts are appreciated.
The Recognition Council’s White Paper report, “The Time For Employee Recognition and Rewards Programs is Now,” published in April, states, “As companies lose valuable talent to the forces of recession, managers must keep in mind that the remaining workforce may be discouraged, further impacting productivity at a time when employees need to be more engaged than ever.” Recognition and reward programs encourage employee engagement, the report says, and “nothing drives profitability like engaged employees.” (To access the full report, visitwww.recognitioncouncil.org/photos/custom/ RecognitionCouncil_Article-040609.pdf.)
Why gift cards?
In November, 2008, the Incentive Gift Card Council (IGCC) predicted incentive marketing suppliers would sell a record number of gift cards to corporate customers during the holiday season and beyond as part of employee recognition and motivation programs. Some studies project overall corporate and consumer gift card spending could rise from an estimated $400 billion in 2008 to as much as $600 billion in 2010, said IGCC.
Experts attribute the popular use of gift cards as safety incentives to:
- Lots of options: Gift cards are available from an ever-expanding list of providers, including major retailers, banks, catalog dealers, grocery stores, restaurants, gas stations and more. Companies can tailor their safety incentive programs to the wants and needs of their workforce. This is particularly significant when times are tough because workers feeling the financial squeeze might be more interested in cards that can help cover their basic necessities, like food and gas. Or workers who have cut back on frivolous spending might appreciate the opportunity to splurge on a luxury item or a night out at their favorite restaurant.
- Cost-effective and convenient: Gift card programs offer companies an economical option that is easy to administer. Gift cards are easily stored, shipped and tracked. They are also easily presented to and redeemed by recipients.
“Trophy value”: While cash rewards can
easily blend in with regular compensation and
be quickly forgotten, gift cards can be used to purchase
an item that can serve as a constant reminder of the
recipient’s safe behavior â€” and their company’s
recognition of that behavior â€” which reinforces the
motivational impact of the reward.
“Make no mistake. Gift cards will continue to be an extremely popular choice â€” if not the top choice â€” for employee incentive, reward, loyalty and recognition programs,” said IGCC President Andrew Dodge. “Gift cards are ideal for corporate gift-givers looking for a meaningful gift that gives the recipient some personal choice, and are easy to buy, receive and distribute in a timely manner.”
SIDEBAR: A smart startWith so many retail operations closing stores and declaring bankruptcy, the IGCC cautions companies to exercise due diligence when choosing a gift card vendor. If you’re looking to start a safety incentive program using gift cards or incorporate gift cards into your existing program, the IGCC provides the following guidance.
TALK TERMS AND CONDITIONS:Ask about fees, the card’s potential decline in value over time, and expiration dates. “Open-ended” cards issued by banks, shopping malls and credit card companies are more likely to have expiration dates and added fees, says IGCC. But gift cards issued by the nation’s 25 largest retailers do not expire, and 84 percent of them have no fees, according to the National Retail Federation. In addition, some state laws have restricted retailers from imposing non-usage fees and have placed limits on expiration dates.
BUY FROM REPUTABLE RETAILERS:Ask retailers about any recent store closings and scheduled openings of new stores. There may be financially sound reasons for select store closings, but it is smart to get the details.
ASK ABOUT REDEMPTION OPTIONS:Will all store locations accept the gift card? Are stores located near the intended recipient(s)? Are the gift cards redeemable on the retailers’ Web sites?
ENLIST THE HELP OF INCENTIVE SUPPLIERS:Companies that use incentive suppliers to administer their gift card programs should contact their supplier with any questions or concerns.