Employee gifting in the cost-of-business crisis? More important than ever.
Posted on March 21, 2023 by Megan Goodfield
After having only just bounced back from the COVID-19 pandemic, many businesses are now facing another existential crisis: the increasing cost of business.
Soaring energy bills, ongoing supply-chain issues and labour shortages have created a perfect financial storm, leading to the UK’s highest company insolvency rates since 2009.
Companies are looking to cut costs wherever they can – and employee incentives are often proposed as the first to go. Seemingly inessential nice-to-haves are an easy target for cash-strapped finance leaders. But as any experienced HR professional will tell you, now’s not the time to cut back on employee incentives. Quite the opposite.
Making sweeping cuts to employee reward schemes is a short-sighted move. Research shows that creating a culture of regular rewards – where staff are recognised around once a month – boosts employee engagement, productivity and retention.
Even a small gift can make a big difference to employee morale. And keeping staff happy reduces turnover – which is a costly business in itself.
The cost of replacing disenfranchised staff has also risen. Once thought to cost around one third of an employee’s annual salary, the cost of recruiting and training a replacement has now risen to twice their annual salary. Simply put, replacing employees is unaffordable right now.
On top of the financial implications, staff turnover can also set off a chain reaction of negativity across the rest of the workforce – a phenomenon known as the ‘turnover contagion’. When one valuable employee leaves, it can cause a ripple effect of reduced productivity and diminished morale, until you end up with a flurry of resignation emails in your inbox.
These are trying times for businesses. But by simply rewarding staff with a seemingly small and relatively inexpensive gift, you can improve morale, productivity, retention and engagement – and in turn, boost your company’s bottom line. And in the cost-of-business crisis, that’s the number-one goal.
A little recognition goes a long way
It’s not just businesses that are feeling the pinch. The cost-of-living crisis is continuing to squeeze household budgets, too.
In its recent report on the crisis, The Office for National Statistics found that 89% of UK adults reported that their living costs had noticeably risen, with 94% and 82% of Britons citing rising utility bills and increasing food prices, respectively, as their number-one concern.
With such a large proportion of UK workers feeling the pressure right now, it’s unsurprising that HR departments are paying close attention to the crisis – and the effect it’s having on employee morale.
When times are tight, and morale is low, employees really appreciate the treats they receive from their employer. Even a small gift can make them feel genuinely appreciated, and can increase productivity by around 25%.
Treating staff to small gifts throughout the year is a win-win for businesses. Employees feel valued and happy at work, and employers benefit from increased productivity and morale – without having to blow their budget.
It’s clear that thoughtful employee gifting provides an innovative way for businesses to weather the cost-of-business crisis. But what do these small incentives look like? And what kind of gifts deliver the greatest impact?
To find out, we surveyed 1,000 members of the British public – across all age groups and backgrounds – to discover which employee incentives they prefer, and which make them feel most connected to their employer. The survey revealed some interesting insights.
- The largest cohort of respondents (44.2%) said they’d prefer to receive a premium gift card over the equivalent amount in cash.
- 62.5% agreed that receiving a gift card for a premium brand would feel more like a ‘treat’ than receiving cash.
- 91.3% said they’d be more likely to remember receiving a gift card vs. money towards a future purchase.
Even in today’s trying times, employees would prefer to receive a premium gift card over cash. And they’re also more likely to remember receiving a gift card than cash. Why? Because a gift card permits the giftee to ‘treat themselves’ to little luxuries that they may not otherwise buy, in a way that cash does not. Even if the denomination is relatively low, being treated to some extra-special items will help employees feel extra-special themselves, helping to cement the entire gifting experience in their minds.
Give your employee gifting the ‘wow factor’
When asked about receiving an M&S Gift Card in particular, our survey respondents shared strong emotional responses. 77.7% say they’d feel ‘truly valued’ or ‘thoughtfully rewarded’ if they received an M&S Gift Card from their employer.
M&S is known for accessible luxury: premium products that cost a little more, but not the earth. An M&S Gift Card provides just the right amount of indulgence – even at relatively low denominations.
Employees can spend their gift card on something truly special from the expansive M&S range. It could be a bouquet of flowers to brighten up their day; new branded trainers for an upcoming event; or sought-after cosmetics they otherwise wouldn’t buy. Whatever they choose, the gifting experience will make them feel ‘truly valued’ by their employer.
So whether you’re rewarding performance or celebrating a workplace milestone, gifting with M&S will give your initiatives the ‘wow factor’ – helping them stand out in your employees’ minds. They’ll fondly remember the experience for longer, significantly improving long-term motivation, morale, engagement and productivity.
To learn more about the never-ending impact of corporate gifts, read our exclusive report, ‘Unforgettable impressions: What do your corporate gifts say about your brand’.
Alternatively, enquire now about making your employee initiatives as impactful as possible with M&S Corporate Gifts