It’s no secret that America is facing a labor crisis. According to a recent survey, 77% of American businesses are facing a talent shortage. But this doesn’t just mean difficulty filling roles — it also affects companies’ ability to retain top talent.
The trend began long before the pandemic. There’s been a steady rise in the monthly quit rate since 2009. That leaves many workplaces seeking incentive ideas for employees to keep their workers happy and engaged. Here are a few tips to get you started.
What Are Incentives for Employees?
A workplace incentive can refer to any reward or program used to motivate employees. It’s really nothing new — the “employee of the month” program has almost become a cliché. But many employers are upping their game, offering financial bonuses, free meals and memberships, or even improving their benefits plans to retain top talent.
Research shows it works. Data published by the Harvard Business Review reveals that rewards and incentives for employees can increase job satisfaction and employee commitment.
That said, it’s important to remember that workplace incentives are designed to augment your existing company culture, but they won’t fix every issue. If workers are leaving due to larger, underlying concerns, you’ll need to address these issues before implementing an incentive program.
Types of Employee Incentives
Incentive ideas for employees can come in several different varieties. Businesses are introducing benefits that include:
- Monetary incentives (bonuses, gift cards, etc.)
- Employee appreciation gifts (coffee mugs, company apparel, etc.)
- Employee recognition programs or employee awards (e.g., “worker of the month,” etc.)
- Flexible scheduling (e.g., work-from-home or hybrid work options)
- Professional development opportunities (webinars, courses, training programs. etc.)
- Employee wellness programs (gym memberships, exercise groups, etc.)
- Tuition reimbursement (or a stipend for learning opportunities)
- Team-building activities (corporate lunches, parties, or retreats)
- Employee perks (discounts, deals on certain products, etc.)
- Additional time off work (extended vacation hours, flex time, etc.)
If you’re not sure which incentives to focus on, you might consider asking your team for incentive ideas for employees. After all, they may know better than you do what would keep them engaged and happier in their roles. Consider asking about incentives in an employee engagement survey or creating a focus group that provides insight into what motivates your people.
It may also help to offer more than one type of incentive program. Monetary incentives may be attractive to some workers, while other employees may be better served through lifestyle rewards, such as wellness programs or work-from-home opportunities.
Benefits of an Employee Incentive Program
Your employees truly are your most valuable resource, and it’s important to show them that. That’s why it helps to invest in them with an employee incentive program. Companies that do so can expect to see benefits that include one or more of the following.
Much attention has been given to the trend of “quiet quitting,” where workers cease to bring their full effort to the workplace. That’s often because their work goes unacknowledged and underappreciated — issues an incentive program can address. In fact, research from Cornell University shows that people are strongly motivated by short-term rewards.
Organizations that offer incentive prizes for employees can expect to see their employees more actively engaged than they were before. And when rewards are tied to the completion of a major project, it can keep the energy going for the next big challenge.
Motivated workers are productive workers. When your team is fully engaged in their job responsibilities, they’ll be better equipped to increase their output and workplace efficiency.
Data from the Incentive Research Foundation found that motivational programs for employees led to a decrease in employee turnover and an increase in workplace productivity. That lets you get more done without having to increase your headcount, which translates into a healthier bottom line.
Workplace incentive programs are good for your bottom line. Research has shown that organizations that prioritize motivating employees see a 27% boost in profits. When employees feel engaged and motivated, they’re more likely to put their best foot forward. Even small incentives for employees can boost employee engagement and efficiency, which will have a measurable effect on your bottom line.
Higher Retention Rates
According to the Incentive Research Foundation, companies that used incentive programs had a retention rate 87% higher than companies without such programs.
Similarly, a 2020 survey from Willis Tower Watson revealed that 78% of workers report that they’re more likely to stay with an employer because of a benefits program. While the survey focused on significant benefit programs such as healthcare and childcare, other incentives can also contribute to strong employee loyalty.
For example, during the pandemic, workers got a taste of the work-from-home lifestyle. Once restrictions were lifted, a whopping 64% of workers reported that they’d rather quit than return to a fully in-person schedule.
Naturally, employees will love the opportunity to work for a bonus reward in addition to a regular paycheck. But other reward programs can improve company morale for reasons that have nothing to do with money. In survey after survey, employees report greater happiness and less stress when given the option to work from home.
Additionally, incentives can provide a greater sense of belonging. After the pandemic, American workers found themselves asking questions about purpose. According to one survey, two-thirds of the workforce found themselves reevaluating their life’s purpose, which included their career. Incentive programs that help workers feel like part of a team can instill purpose and meaning, which can keep them happier and more engaged.
12 Incentive Ideas for Employees
Given these benefits, it’s important for employers to find ways to integrate incentives into their workplace. Keep in mind that not all incentives have to be monetary. But even if you have to offer financial incentives, it can pay off through the transformation of your company culture.
Here are some of today’s top incentive ideas for employees.
1. Financial Bonuses
No matter what creative ideas you may have, your employees will be the most motivated by financial incentives. According to data from PayScale, roughly two-thirds (65%) of workers prefer bonuses based on personal performance.
For example, you might offer a small monetary reward ($100) for the completion of a project or for maintaining perfect attendance. Whatever your employee bonus ideas, you’ll likely find your workers are more eager to earn extra cash than anything else.
2. Employee Recognition Programs
You may already have some sort of “employee of the month” program, but for most companies, this amounts to little more than a tiny plaque and a brief round of applause in the conference room.
A recognition program should be designed to do two things: (1) thank the employee for a specific contribution to your company, and (2) publicly recognize this contribution. Some companies even showcase star talent on their social media page, making them the shining stars of their organization.
At a minimum, this helps workers feel valued and appreciated, which can likewise contribute to their company loyalty.
3. Employee Gifts
In some circumstances, a piece of company swag can be a much-appreciated thank-you gift. Try to think of items your employees will actually use, like an insulated coffee mug or a gym bag.
While these items should never be a substitute for actual bonuses, they can be a tangible way of showing appreciation to workers who complete difficult projects or display a positive work ethic.
4. Flexible Schedules and Hybrid Work Options
Americans lead busy lives — they need schedules that adapt to their families and outside commitments. Employers can offer flexible work schedules that allow workers to adjust their hours as needed or work from home for at least a portion of the week.
Admittedly, this will require a mentality shift, where productivity is measured by performance rather than the total hours spent in the office. The good news is that research from Stanford University suggests that workers are more productive when working remotely. Offering this incentive can help you retain your best workers, and it may even help you attract some new ones.
5. Free Food
Sometimes, the best way to your employees’ hearts is through their stomachs. A survey from ezCater showed that a free lunch is one of the top perks that matter to today’s employees.
Even small businesses can take advantage of this perk. If you don’t have a large facility, you can always invite a local food truck and distribute vouchers to your workers. As an added bonus, this can be a creative way to pull your remote/hybrid workers back together, getting them to the office at the same time to collaborate on shared projects.
6. Professional Development Programs
According to the think tank Conference Board, 58% of workers claim to be ready to leave a workplace that doesn’t offer professional development. This number rises to 66% for millennials and 63% for Gen Z.
But professional development is as important for your company as it is for your workers, if not more. Look for industry-specific opportunities such as webinars and conferences, and allow employees to attend these events on company time. Alternatively, provide access to educational resources such as Khan Academy or LinkedIn Learning to provide in-depth training.
7. Tuition Reimbursement
Student loans are a heavy burden for many of your workers. And other employees may dream of attending college but find the costs to be prohibitive. Employers can offer tuition reimbursement programs to pay for past educational expenses, as well as any additional education that employees may want to take.
Many workplaces tie these benefits to some sort of employment contract. For example, workers might receive reimbursement as long as they stay with the company for three years. This helps your employees, but it also creates a mechanism for worker retention.
8. Profit Sharing
While retirement benefits are hardly new to the workplace, some employers are going above and beyond through profit-sharing programs. These programs can be used as an alternative or supplement to traditional 401(k) plans or even disbursed in the form of direct cash payments.
Since these payments are directly tied to company profits, it serves as a natural motivator for your workforce. And unlike other retirement plans, a profit-sharing option allows you to make adjustments as necessary, ensuring the program aligns with your company’s performance.
9. Wellness Programs
Many American workers are committed to a healthy lifestyle, and your workplace can help. You might offer your workers a discounted (or free) gym membership, which can sweeten the benefits package you’re offering.
Some workplaces might institute wellness programs, such as a “bike to work” program or drives to help workers quit smoking. Others may offer free health screenings and other events to promote healthy living.
This often extends to mental health. Providing mental health awareness programs and confidential access to services may not seem like a reward, per se, but it demonstrates a commitment to worker well-being that can further nurture company loyalty.
10. Community Service Projects
Studies show that serving others positively affects a person’s well-being. Employers can turn this into a workplace “perk” by seeking out opportunities for their staff to give back to the community around them.
This can be as simple as a food drive or direct involvement in charitable organizations in your community. The AOI corporation, for example, made headlines in 2020 when they paid their workers while they served Habitat for Humanity.
These sorts of opportunities can boost employee well-being and double as team-building exercises, helping you develop a positive company culture.
11. Time Your Incentives to Worker Performance
In addition to the type of crew incentive you offer, it may help to think about the strategic timing of the incentive itself. For instance, if you offer a financial bonus, you might directly connect it to things like:
- The completion of a big project
- Perfect attendance
- Workers who come early/stay late
- Unique examples of workers who show initiative
- Completion of projects before the deadline
These rewards can not only show appreciation for the worker’s past performance but can also help you build momentum for future projects and workplace goals. They also form logical touch points for employee recognition programs and may even stir your employees to achieve workplace goals in pursuit of these rewards.
12. Connect Rewards to Employee Referrals
If you’ve been struggling with maintaining your headcount, you might use employee incentive ideas to generate new leads.
For example, offer incentives for employees who submit meaningful referrals to your HR department. This way, your existing workers can offer helpful hints about future employees, streamlining your talent acquisition pipeline and reducing the money you’d otherwise spend on recruitment marketing.
Just make sure to remind your staff about this benefit throughout the year. Doing so will ensure you receive a steady, reliable stream of referrals to keep your workplace adequately staffed.
Motivate Your Employees with ProService
Remember, even the most creative incentives for employees won’t work for every company or every industry. That’s why finding an incentive program that aligns with your company's mission, values, and culture is important. It also helps to evaluate what programs are working — and make adjustments to the ones that aren’t.
Company incentives truly do translate into happier workers and a more efficient workplace. That’s why ProService Hawaii is proud to offer industry-leading HR services in Hawaii. If you’re looking for guidance on developing and implementing an incentive program, contact ProService today!