The Cash/Non-Cash Debate
Over my years in the employee recognition business, I’ve seen a real evolution in the age-old discussion of cash vs non-cash rewards. It appears at this juncture that the evidence shows that non-cash rewards have clearly come out on top. According to the Incentive Federation, “…over the last 20 years there has been a dramatic jump in the number of U.S. businesses using non-cash rewards, rising from just 26% of all U.S. businesses in 1996 to 84% of all U.S. businesses in 2016.” So what accounts for this significant shift in recognition practices?
Reasons for the Shift
Recently, the Incentive Research Council – IRF - released its 2017 Trends Study describing the current developments impacting the incentive and recognition industry’s trajectory. One of its key findings was the increasing demand for non-cash rewards and recognition. The IRF offered several reasons for this change including the following:
- The fact that 77% of U.S. jobs are now in the service sector
- The positive correlation of employee engagement measurements to stock price increases
- The focus of CEOs on both talent and innovation as part of their core considerations
- The need to reward and recognize employees for non-core job roles they are asked to engage in on a daily basis
- The changing role of HR as a strategic corporate partner
The IRF believes that these top down and bottom up pressures will continue to support the growth of non-cash rewards and recognition programs.
The Impact on Recognition Program Design
Of course this will mean that recognition and reward programs will face changes. According to the IRF study, “recognition program design will continue to evolve as the need for and use of non-cash reward and recognition programs continue to grow.” So what are some of the major changes we will see in the way we reward and motivate our employees? The IRF is currently tracking six shifting program design patterns:
- More than One Award: 81% of businesses now use more than one type of non-cash reward to recognize their employees, sales people, channel partners, and customers.
- Social Recognition: Almost 40% of programs are now using social recognition. Employee engagement sponsors are asking for social recognition benefits/value to be factored into business case discussions.
- Integration: Programs’ power increases when they are integrated with other platforms. 34% of program owners said they are now integrating their programs with their sales force system.
- Personalization: Engaging three different workforce generation demographics, each with a different perspective, means personalizing each experience as much as possible.
- Sharing Economy/Paying it Forward: Employees and attendees today want the option to share their success, wealth, and gifts with their families and those in need.
- Top Performer Tracking: To date, best practices in the reward and recognition space have been the result of industry averaging. However, with more tracking data, better correlation between performance and non-cash rewards will be possible.
So Will Your Program be Ready to Roll?
So now that we’ve made the case for non-cash rewards, are you prepared to step up to these new imperatives? Guiding companies in creating state-of-the-art, technology-driven employee recognition and rewards programs is our wheelhouse. Let us help.