It has been predicted that COVID-19 will have a staggering impact on the Australian and New Zealand economies. PwC modelling estimates that over the coming year, Australia’s GDP could contract by 1.32% (or $34.2 billion). In New Zealand, figures released in late June showed that first quarter GDP had its biggest fall in 21 years, dropping 1.6% from quarter four.
The economic impact suggests that Australia and New Zealand are a step closer to being officially in a recession. This undoubtedly will have a direct impact on businesses and their budgets for months – even years – to come. Remuneration budgets are likely to be among the first hit.
In times of hardship and uncertainty, employers must enhance their retention efforts to ensure their top performing employees are rewarded and feel valued. Forbes found that 66% of employees say they would likely leave their job if they didn’t feel appreciated (this jumps to 76% among Millennials).
So, what can you do when you can’t show your appreciation through monetary rewards such as salary raises and bonuses? Fortunately, there are several less expensive ways you can retain and engage your deserving employees.
Rewards vs. recognition
First, it’s important to note the distinction between rewards and recognition. The two are often grouped together, but they refer to two separate things.
Recognition – The foundations of an effective recognition program remain largely unchanged, regardless of whether employees are in the office or working remotely. However, the means of delivery for such a program may need to be adjusted to cover those working remotely. An effective recognition program is really about recognising a job well done or acknowledging a particular behaviour, and in order to be effective it must happen in real time. The best recognition programs involve the use of public work channels, e.g. social media, messaging platforms, or during team meetings (either virtual or in-person). It should also be noted that recognition by itself (without any reward) can help to keep morale up – after all, who doesn’t like a thank-you from the boss?
Rewards – A rewards program is something that may look a little different since the pandemic. The default is to think that it only refers to financial rewards, yet in tougher financial times, monetary rewards such as bonuses may not be possible. It’s important to never undervalue the effectiveness of any type of reward, even if it’s non-monetary. Non-monetary rewards or incentives can play an important role in keeping motivation levels up – and just as critically, they can be just as gratefully received as financial rewards.
5 examples of non-financial incentives
1. Introduce a company-wide recognition program
Ensuring that staff are recognised may seem obvious, and it’s worth remembering that what gets recognised gets repeated, so cultivating a recognition culture will boost morale, productivity and motivation. Sincere face-to-face praise – whether in person or via messaging or video conferencing tools like Zoom and Slack – can be very meaningful.
Achievements don’t have to be sizeable to be recognised. Businesses can use technology to help celebrate milestones like birthdays, work anniversaries and training achievements, as this can still have a positive impact on engagement and performance.
What’s more, company-wide recognition is a powerful motivator. Recognising an individual’s hard work for all to see will amplify trust, motivation and willingness. Employers can also encourage peer-to-peer recognition by implementing an Employee of the Month program, which is voted for by peers.
2. Engage with community/not-for-profit partners
Cultivating a culture of giving back is another way to inspire employee engagement – and better yet, employee passion. By engaging with community initiatives and connecting with not-for-profits, businesses can encourage community giving and employee volunteerism. For many, this is a huge motivator.
Deloitte conducted a survey on employee volunteerism and found that, according to 70% of respondents, volunteer activities are more likely to boost employee morale than company-sponsored happy hours. Furthermore, three-quarter of Millennials surveyed said they would volunteer more if they had a better understanding of the impact they were making.
Employers should recognise their employees’ genuine desire to give back and offer them more opportunities to do so. Giving back to the community also demonstrates a business' commitment to corporate social responsibility (CSR) reputation.
3. Rethink learning & development opportunities
To build morale and boost engagement, employers should invest in the professional development of their employees and encourage them to upskill and cross-skill. The most cost-effective way to do so is through eLearning.
The long-term cost of eLearning is significantly lower for businesses, compared to in-person or instructor-led training. This is because there are financial savings on travel, classroom hire and maintenance, paper documentation, etc. What’s more, according to a LinkedIn Learning Report, most (52%) modern workers like to engage with learning at the point of need, and eLearning permits this.
Other cost-effective career development opportunities include internal mentoring programs, job rotations or short-term secondments in different departments if available.
When employees feel that their employer is investing in their future and helping them to become more employable, they will be more motivated to achieve highly.
4. Offer extra paid or unpaid leave entitlements
COVID-19 has caused immense stress and anxiety, which may be affecting employee health and wellbeing. One way employers can help to relieve some pressure is to offer more paid or unpaid leave entitlements. This communicates to employees that the company cares about their wellbeing and their at-home circumstances.
5. Offer flexible working arrangements
Flexible working opportunities are highly desirable among modern workers. COVID-19 has prompted a world-wide remote working experiment, which for many has proved successful. Therefore, it’s only natural that remote working practices are adopted permanently – even after COVID-19. Allowing people to structure their work to fit in with their parenting, caring and other life responsibilities can greatly increase organisational attachment.
The power of employee perks and benefits
Employee perks and benefits can also be powerful motivators – and they don’t have to cost the Earth.
COVID-19 has impacted all areas of employee wellbeing: physical, psychological, social and financial, so whatever employers can do to alleviate some pressure will be greatly received. Perks that can aid employee health and wellbeing include virtual yoga sessions (via Zoom); financial wellness seminars; and care packages delivered to employees’ home addresses (perhaps containing sweet treats, brand merchandise and a thank-you note). Additionally, providing travel subsidies and staff discounts at stores and restaurants can relieve some financial pressure – especially as workers begin to return to the office.
2020 has been a tough year. It’s only natural that employers want to say “thank you” to their staff for keeping up the hard work, but financially compensating workers isn’t the only meaningful way to recognise a job well done. Cultivating an effective rewards and recognition program will help to bolster morale and loyalty and motivate employees to keep striving for greatness – both now and outside of the pandemic.