The U.S. recognition and incentives market is valued at over $50B annually. For many years, businesses have translated these dollars into monetary rewards and physical gifts for employees, like cash bonuses, gift cards, electronics and plaques. The good news? Companies are making a conscious effort to recognize top employees.
But the bad news? According to research by Bersin by Deloitte, 87 percent of that investment, a cool 43 bill, has zero impact on organizational performance – including your priority KPIs like employee engagement, performance, and retention. With a changing workplace landscape influenced by the rise of Millennials employees, a focus on employee experience design and personalized employee needs, it's no wonder that our traditional employee recognition practices are in need of an upgrade.
At Blueboard, we believe experiences are the best way reward your top employees. Experiences, unlike cash or gift cards, build lasting memories that only grow fonder over time, are personalized to the employee's unique passions and interests, and are social and buzz-worthy, helping to create a culture fueled by authentic employee recognition.
Being #PeopleGeeks ourselves, we wanted to better understand employee recognition preferences across a broader spectrum of voices. This month, we surveyed a wide group of US employees, asking what they’d rather receive from their boss after doing an awesome job at work – a Visa® gift card, or their choice of an experience? Experiential employee reward examples included Blueboard favorites like a relaxing spa day, club seats to the game, Michelin star dining, private lessons with a golf or tennis pro, or a weekend getaway. Respondents were told to assume all choices had the same retail value.
After all was said and done, we were delighted to see that experiences do indeed reign supreme. Looking at the aggregated experience data compared to gift cards, experiences won by a wide margin:
2 in 3 employees prefer experiences to monetary employee rewards
Taking our investigation a bit further, we sliced the data by various workforce generational segments.
3 in 4 Millennial employees prefer experiential employee rewards
This came as no surprise given Millennial consumer spending behavior indicates a high interest in experiences over physical goods, with this segment of 18-34 year olds more regularly investing in experiences like concerts, travel, and dining out than in new cars or trendy shoes.
Millennials also enjoy crafting their own unique personal brand, leaning on hobbies, interests and their workplace to define their image. Heightened use of social media provides the outlet for bringing their personal brand to life, and experiential employee rewards more-so than physical goods provide the social currency they crave (growing their likes, comments and followers across social channels).
60 percent of Gen Y employees prefer experiential employee rewards
As we look ahead to more senior segments, we see that 60 percent of Gen Y employees also prefer experiences. Gen Y's increased household expenses (with small children, new home ownership, etc.) can mean a natural inclination towards monetary employee rewards, but Gen Y also values a much-needed break from the chaos.
Gen Y employees approaching their 40's can also run into the elusive mid-life crisis. Employees are taking a step back and assessing their career choices and their general path in life, and reprioritizing their future needs. Experiential employee rewards like the music lessons, photography workshops, yoga and meditation retreats (as offered in the Blueboard rewards catalog) provide a great outlet for Gen Y employees to reconnect with their interests and passions, and take some much-needed "me time".
A recent Gen Y Blueboard reward recipient wrote in after redeeming her employee reward for a staycation that she shared with her husband:
"I must admit I was skeptical at first, I really just wanted cash as we are buying a house and thought it would be put to better use there. I was so wrong. Getting away from all the drama was exactly what we needed."
57 percent of Boomers prefer experiential employee rewards
And lastly, our Boomer population. Boomers, like Gen Y, value security and are seeing retirement in sight. After years of planning, they're excited for quality family time and the ability to execute on that re-prioritized life bucket list they were busy crafting in their 40's and 50's.
They value experiences that help them revisit cherished memories or hobbies, or that they can cross off their bucket list, especially adventures or trips shared with their loved ones. A great example is a recent employee who used his Blueboard employee reward to recreate his first date with his wife in celebration of their 25th wedding anniversary.
As a recent Blueboard employee reward recipient expressed after a weekend getaway with her grandchildren at Great Wolf Lodge, experiences serve as an opportunity to connect families, providing the outlet for quality time together:
"Thank you Blueboard for making this little vacation happen! Having family time is the most important thing to me and I am glad to have been able to share my reward with them."
No matter your organizational mix, experiential employee rewards are the most relevant and valuable option for everyone.
At Blueboard, we offer a catalog of experiential gifts for employees to pick from, and from there, our celebrated Concierge team brings their ideal experience to life. Whether tandem skydiving, trapeze lessons or PADI certification for Millennials, guitar lessons or Michelin star dining for Gen Y, photography lessons or weekend getaways with loved ones for Boomers, experiential employee rewards are exciting and make an impact.