Why are incentives important? 4 ways incentives benefit your business

Insights
Posted on 7 February 2022 Read time 3 mins
Author Samantha Mitchell

“For it is in giving that we receive.” - St. Francis of Assisi.

Incentivising the people you want more of - employees, customers and partners - with digital gift cards will not only delight them, but it will also support your business growth in the short and long term

In this blog, we’re focusing specifically on the use case of employee incentives rather than customer or partner rewards (we’ll cover these separately). 

But what exactly do we mean by incentivising? 

Simply put, incentivising is a way of motivating or encouraging someone to do something for you. The promise of a reward spurs positive action

And when it comes to incentivising and rewarding, cold hard cash is not the only answer. In fact, we’ve already shed light on why the delight and loyalty factor is greater with digital gift cards vs. cash:

According to psychologists, “when paying with a gift card, people forgo buying everyday items in favour of buying indulgent items,” making the purchase feel like more of a gift and creating a long-lasting memory. 

And if you’re thinking “I’m not sure we really need an employee incentive program," remember it’s not just about the need or the cost right now - but about the ROI and other benefits to your business. 

Here’s how using incentives can be a win-win. 

4 benefits of employee incentives

1. Improve employee performance 

Productivity drives business, but what drives your employees? 

Happy, appreciated employees are ultimately more effective. 

There’s little doubt that recognition has an impact on employee engagement, job performance and value to your business. 

And did you know that this impact is actually measurable? Here are some stats that to prove it:

  • Employee engagement, productivity and performance are 14% higher than in organisations without recognition. (Deloitte)
  • A 15% improvement in engagement can result in a 2% increase in margins. (Deloitte)
  • A recent report on employee recognition found that 92% of workers are more likely to repeat a specific action after receiving recognition for it. 
  • 90% of top-performing companies utilise incentive programs to reward their sales associates. 

As you can see from these stats, if you haven’t considered employee incentives yet, you should certainly put it on your radar. 

If you’ve just had a strong quarter it’s the perfect opportunity to share a bit of delight with your employees. 

Or, if you’re pushing towards an ambitious sales goal, consider offering incentives to your employees to encourage them to get those deals over the line. 

 

2. Retain talent

Employees are the best asset for driving your business forwards - but employee churn can be expensive, not to mention stressful. 

According to Glassdoor, the average employer spends about £3,000 and 27.5 days to hire a new employee. 

Therefore, HR leaders are starting to invest more in employee retention. Overall, incentives budgets are expected to increase by 34% in 2022, with gift cards increasing 34%. 

There’s much being said at the moment about “the great resignation” - with resignation rates between 30 and 45 year olds increasing a staggering 20% between 2020 and 2021. There are multiple factors driving this - but it makes the hiring market more volatile and sharpens the need for managers to focus on retaining their best talent. 

Making employees feel rewarded has a significant part to play in keeping employees happy, focused and fulfilled in their roles. 

why-are-incentives-important-stat-quote

 

3. Create a more positive work culture 

What’s the greatest benefit of creating a work culture that celebrates success? 

This ultimately comes back to productivity, job satisfaction too and employee retention too. 

85% of HR leaders agree that recognition programmes positively affect organisational culture.

Incentivising employees can improve morale in a number of ways - from helping them feel seen and recognised for their efforts to making them feel more embedded with the company, and even fostering a healthy level of competition across teams. 

Involving employees in certain incentive decisions has its benefits too. For example, allowing colleagues to nominate one another for rewards is empowering, and shows the value of employee opinion.

One-off rewards that are unexpected by employees can help create that extra delight factor. According to one survey, 47% of respondents preferred to be rewarded spontaneously, whilst 38% preferred to be rewarded for good work, and the rest for traditional calendar events. 

4. Improve your reputation

It’s not all about the bottom line (although these benefits do also influence business growth):

As a side effect of happier, more productive employees and a positive company culture, incentivising your employees can also:

  • Boost customer satisfaction scores
  • Enhance career progression
  • Reduce staff absence
  • Improve staff wellbeing
  • Attract top talent

 

All of these things help create a positive brand image, and attract new business, new customers, and even new fans. 

Indeed, some of the best incentives programmes and initiatives go a step further by focusing on the idea of customer-focused rewards. 

Linking employee recognition to customer experience metrics helps create a more customer-centric culture, benefiting your business further. 

 

Get ahead of the gift card game

Incentives are a simple, effective way to show your employees that you care.

And it’s a growing trend. In 2021, B2B gift card sales dominated the gift card market, representing around 75% of the market, and growing 26% year on year (GCVA). 

Whether you want to launch a full-scale employee incentives and rewards programme using digital gift cards, or use rewards as a one-off to reward, incentivise and delight employees - we can help.  

With Tillo, you can easily bulk buy digital gift cards through our site, in seconds. With over 2,000 brands to pick from (everything from Deliveroo to IKEA) and 100% environmentally friendly, Tillo is the best choice to delight your employees. 

Check out our current promotion where the purchaser receives a £50 gift card of their choice when they place an order. 

 

Tillo dots icon

Sign-up to our mailing list for the latest rewards, incentives & gifting insights