2024 Employee Rewards Trends
Recognition is an intangible acknowledgment of people for their behaviors, personal efforts or contributions.
A Reward is something tangible that is given in return for service or effort.
An Award is a symbol of recognition for an achievement or milestone.
Introduction
Sharing research and best practice insights is an important part of our mission at Engage2Excel. Over the past seven years, our Trendicators research division has produced dozens of eBooks on a wide variety of issues, challenges and opportunities relating to employee recognition and engagement. However, in reviewing our archives, we noticed that information about employee rewards was conspicuously absent.
To fill this gap, we recently conducted a roundtable discussion with members of the Trendicators Advisory Board. The discussion was led by Jeff Gelinas, president of Engage2Excel; Mike Donnelly, president of Hinda Incentives, an E2E company; and Ron Eliakim, Engage2Excel’s VP of Merchandising and Strategic Award Services.
Research and best practices presented and discussed at the roundtable shaped the content of this report on 2024 Employee Rewards Trends.
The Business Case for Employee Rewards
The business case for employee recognition and engagement is well established. Research by Dr. Jack Wiley, Engage2Excel’s chief scientific officer, shows that highly engaged employees drive higher profits, demonstrate significantly higher performance and have far lower voluntary turnover rates. What has received less attention is the emotional impact of non-cash rewards. Paychecks are seen as entitlements and are used for necessities. Non-cash rewards are an extended form of recognition and appreciation for exceptional performance and the demonstration of organizational values. While cash rewards are easily delivered, they have the lowest memorable impact. The Impact of Rewards table below charts the progression of perceived value for common rewards categories. A well-balanced portfolio includes a mix of these options.
Employee Rewards Budgeting Trends
The Incentive Research Foundation (IRF) annually studies economic trends in the rewards industry. In a 2022 Incentive Federation study co-sponsored by Engage2Excel, total non-cash rewards spend in North America was estimated at $176.2 billion, representing a 40% growth over spending in 2016. This rate of increase was greatly diminished by the cancellation of travel programs during the pandemic. Average per-person spend on non-cash rewards grew from $764 in 2020 to $1,090 in 2023. This includes all types of recognition, incentives and non-cash rewards. A new IRF study on 2024 budgeting trends, based on a survey of executives who purchase or operate incentive programs, reveals significant increases in planned spending for 2024 over 2023, with a projected 31% increase in total merchandise spending and 42% growth in gift card spending.
Curating Meaningful Rewards Portfolios
Merchandise rewards are effective because each time a product is used, it serves as a reminder of how the reward was earned. Curate your portfolio to appeal to the preferences of different cohorts in your workforce. Younger generations tend to prefer eco-friendly and socially responsible items. In gift cards, the trend is toward digital cards for immediate gratification online. Lifestyle products and electronics are always popular as durable symbols of appreciation. For service awards, branded products resonate and bolster company pride while effectively reinforcing loyalty.
Best Practices for Improving Program Success
Some organizations focus only on building awareness around launching an employee rewards program. Unlike open-enrollment programs, which are promoted annually during the enrollment period, rewards programs should be promoted throughout the year. A purpose-built strategy, a communications platform and a creative approach to getting the word out are essential for improving program success. Partner with your rewards provider and marketing team to develop a strategy to help remind employees to take advantage of their well-deserved rewards.
Building Awareness for Your Rewards Program
The key to improving rewards program success is building and maintaining top-of-mind awareness. Awareness campaigns impact program usage, boost program access (logins), profile completion, recognition given and redemptions. As shown below, organizations with three or more awareness campaigns throughout the year have more than twice the program logins as those without campaigns. Moreover, organizations with four campaigns over the course of the year will experience spikes in total logins, reward redemptions and recognition given.
Roundtable Key Takeaways
The following is a recap of key topics and takeaways from our roundtable discussion with members of the Trendicators Advisory Board. These discussions are essential in shaping the content of the Trendicators research and best practice reports.
