Most of our customers have access to our Rewards feature, a core part of the Mo product that enables businesses to reward individuals and teams in a considered and structured way. Rewards can be set up in lots of different ways, depending on how much rewards budget exists, who has the ability to reward, how these rewards can be given and the types of rewards that can be issued and redeemed by employees.
We typically work with our customers to understand what's meaningful to their people. And that will differ largely from person to person. Someone with a young family might prefer additional time off, whereas someone who is keen to progress quickly within the business might prefer access to learning and development opportunities. We also consider how best to balance high frequency (and often lower value) rewards with lower frequency (and perhaps higher value rewards).
But how has this all been impacted by COVID-19? How are businesses approaching rewarding their people in this crazy time? And what are employees choosing to do with their rewards budget, where are they spending (or not spending) their cash-based rewards?
We decided to take a look.
It's a very uncertain time for businesses at the moment. So, across the board we are seeing companies reducing their overall rewards budgets. This might mean that the current reward schemes are not being topped up in the short term or in some cases, existing rewards schemes are being frozen.
This doesn't just stop at discretionary rewards. Businesses are heavily reducing spend as the economic challenges take their toll. Executives and senior leaders within businesses are being hit by pay cuts. Reduced hours, company-wide furloughing and temporary scrapping of bonuses are hitting employees where it hurts.
Discretionary reward does not need to be a heavy cost, and whilst we're understandably seeing reward spend being reduced by most customers, we are also seeing and supporting the need to change strategy.
- Focus on non-monetary rewards (e.g. additional holiday allowance)
- Reduce the amount that can be issued but maintain the frequency (e.g. smaller on the spot monetary rewards)
- Double down on social recognition - the need for people to feel like their contribution matters at the moment is very more important in overall engagement
Mo provides employees with the ability to redeem cash-based rewards at a huge selection of high street brands and online retailers. Everything from coffee shops, to fashion brands, pubs and restaurants to app store credit.
We've seen a dramatic and instant drop in rewards being redeemed on the high street for obvious reason. Employees simply can't redeem their cash rewards with coffee shops, restaurants, cinemas, pubs and bars and employees choosing to spend their cash-based rewards with high street businesses has vanished since the lock down was introduced.
Costa, Starbucks and All Bar One have all flat-lined and we've seen an overnight shift to both custom rewards (these are rewards specific to each customer and could be anything from a bottle of wine or an experience day out to additional money in their wages) and online retailers.
This is similarly reflected in custom rewards that revolve around experiences, or leaving the house. Some of our customers offer nights away in hotels, afternoon tea, cocktails, dinners out and spa treatments. These have all but stopped as they're simply not feasible at the moment.
When it comes to cash-based rewards employees are moving their spend to key online retailers. Amazon is still top dog, with redemption increasing 10% last month alone (even despite rewards budgets being reduced).
Other online retailers are showing a dramatic rise, including: John Lewis, Argos and B&Q (perhaps this also follows the trend for more DIY over the bank holiday weekend?).
It makes perfect sense that while we're in lock down in our homes, employees are choosing rewards that can be delivered directly to them.
It's amazing to hear stories of people trying to do their bit during this time. And we're amazingly fortunate to be able to see some of the amazing moments being shared by some of our users on the front line (we work for a number of NHS Trusts, national care homes and private healthcare businesses).
It's also been exceptional to see heartwarming behaviour when it comes to rewards. Those that are issued cash-based rewards can donate an amount directly to a charity of their choice via the Mo Rewards Store. We've seen a 100% increase in those passing their rewards onto charities and NHS trusts on the frontline.
It's a very challenging time for everyone. And it's no doubt causing a pinch on rewards budgets. But if ever there was a time to think strategically about how companies choose to invest in rewarding their people, it's now.
Consider what is available, and where that overall budget needs to be, whilst also considering what schemes might provide the greatest impact for employees in this moment in time.
If you'd like some help in how you can think about rewarding your people during this time, let's talk.