23 Statistics About Why You Need Employee Incentives
Although finding the right rewards and building upon the right tools can be a challenge to implementing a new employee incentives program, the toughest aspect for any organization is silencing naysayers and getting buy-in from management.
To help with your efforts to build momentum for your incentive efforts, we’ve compiled a list of 23 employee motivation statistics that you can use to sell your supervisors and coworkers on the idea of a reward-based employee recognition program. We’ve even organized them as rebuttals to the most common concerns we hear from skeptical managers.
“Employee incentive programs are a fad.”
- Most organizations (86%) have a rewards and/or recognition program in place.
- 70% of those organizations offer between 3 and 6 different programs.
- Incentives are part of a $100+ billion industry, $46 billion of which is non-cash incentives (a number that’s doubled in the past 10 years).
- 89% of employers assume that their employees leave for more money elsewhere, but only 12% of employees actually earn more from their next company.
“We don’t need an employee incentive program” or “We can’t make a change right now.”
Here’s the thing: it’s not really about the need or the cost. It’s about the return on investment. After all, if your organization could get back in productivity double what it pays for a program, wouldn’t it be smart to invest?
One of the main reasons why decision-makers don’t pull the trigger on a program is because they can’t see its direct connection with a predictable return. But you can show them employee motivation statistics that support the significant contributions employee motivation programs make to the bottom line.
FOR EXAMPLE, INCENTIVE PROGRAMS ARE VALUABLE FOR ATTRACTING TALENT:
- 90% of business leaders believe that an employee incentives strategy could positively impact their business, yet only 25% of them actually have a strategy in place.
- More than 4 out of 10 (42%) employees consider rewards and recognition program opportunities when seeking employment.
- 51% of sales talent and 52% of employees are already participating in some sort of program where they work.
- 39% of employees feel under-appreciated at work, with 77% reporting that they would work harder if they felt better recognized.
AND FOR RETAINING TALENT:
- According to a recent CareerBuilder/USA Today survey, 56% of HR managers are worried that their top talent will leave for another job within the year.
- 75% of people who willingly leave their jobs don’t quit their jobs, they quit their bosses.
- The presence of a corporate incentive program motivated 66% of employees to stay at their job.
- Organizations that offer at least one recognition program and that have a low turnover rate (0%-5%) report statistically more recognition programs in place than the medium or high turnover categories.
- A 5% increase in employee retention can generate a 25% to 85% increase in profitability.
- Plus, your employees won’t just stay. Their attitude will be better, which will improve customer service. For example:
- 41% of customers are loyal to a brand or company because they consistently notice a positive employee attitude, while 68% of customers defect from a brand or company because of negative employee attitude.
- Only 40% of employees are well informed of their company’s goals, strategy, and tactics.
AND LET’S NOT FORGET THE EMPLOYEE MOTIVATION STATISTICS ABOUT ENGAGEMENT:
- Disengaged workers cost the economy $300 billion or more per year.
- Companies that actively engage workers profit more than those that don’t. If you look at Fortune’s “Best 100 Companies to Work For,” these organizations have averaged an amazing 200.6% return over the past decade.
- Organizations with higher than average levels of employee recognition realized 27% higher profits, 50% higher sales, 50% higher customer loyalty levels, and 38% above-average productivity.
“But employee incentive programs don’t really work.”
If an incentive program doesn’t work, it’s usually because the program was poorly designed, difficult to manage, or both. Employee buy-in and management support are critical factors, as the following statistics show:
- Companies using incentive programs reported a 79% success rate in achieving their established goals when the correct reward was offered.
- Properly structured incentive programs can increase employee performance by as much as 44%.
- Annual revenue increases are 3 times higher in companies that use a tangible sales incentive over those that don’t use an additional incentive. When incentive programs are working, the potential for growth is much, much higher.
Tips for Employee Incentive Program Success
When looking to achieve long-term success through an employee incentives program, a number of factors need to be considered. 70% of Forbes Global 2000 companies use gamification to boost retention, engagement, and revenues. With that in mind, along with the employee motivation statistics above, we’ve outlined four key areas most important to focus on when managing a successful incentive program:
Promote or Encourage Action With Employees
Employees gauge an incentive’s value based on how hard it is to earn. If you set the goal too high, people shrug off the incentive as unrealistic and not worth the effort. But choose a goal that’s too easy, and it won’t be significant enough to inspire action. Instead, select rewards that inherently have high enough value to be envied, yet still seem within reach. The trick is to choose a reward that both attracts peer attention and stands out from regular pay. Keep in mind that a reward is often more impactful if it’s something that’s generally too indulgent to be justified in the bigger picture of everyday living expenses.
Ensure That It Produces Measurable Success
One of the biggest roadblocks for companies considering an employee incentive program is a lack of confidence that the benefit can be clearly measured against the cost of investment. But let’s take a brief look back at the employee motivation statistics listed above to see if such return-on-investment concerns are really justified. In the case of incentive programs having a significant impact on attracting and retaining talent, remember that just a mere 5% increase in employee retention can result in a 25-85% boost in profits. When you consider that it costs 5 times more to obtain a new customer than it does to retain a current one, it’s easy to see the connection between small boosts in retention and large jumps in profits.
Make It Adaptable to Change and Optimization
Another key characteristic of any successful employee incentive program is that it has the ability to easily be adjusted over time to accommodate evolving needs/goals. Giving out iPads to top performers might really motivate your staff, but it’s probably not the best idea in terms of return on investment. Besides, an award like an iPad doesn’t hold the same level of appeal to some employees as it does others, and therefore might not be the best motivator for everyone. Incentive awards don’t necessarily have to be super-expensive (or require a whole roomful of inventory) to accomplish your goals. Prepaid cards, for example, equally excite everyone on your team while saving you a whole host of program management hassles. Because each individual employee gets to envision exactly what he or she would buy with their card, it ensures a consistently meaningful award each and every time.
Keep It Simple
Finally, don’t make the mistake of thinking that a more elaborate employee recognition program will produce better bottom-line results than a simple one. Many well-intentioned HR managers have failed to design effective incentive programs simply because they built too many rules and conditions into the mix. At the end of the day, it all boils down to motivating employees by giving them a clear, achievable goal, and then rewarding them with something they really want. Not sure where to start? Get in touch with us today!