Regardless of the industry, fostering loyalty helps retain top performers and enhances overall productivity, contributing to improved bottom-line results over time.

At the same time, there is a very significant cost to business for high staff turnover both financially and in lost time.   

According to the HR Industry Benchmark Report 2023, the average cost to hire a new employee is $8000 taking on average 20 days to fill a vacancy so it is clear that employee retention is imperative for the success of any business.

So, what are the essential ingredients to cultivate employee loyalty and retention?

Employee appreciation shouldn’t be a once-a-year affair; but a daily commitment. Business leaders must undertake planning to build an effective program that appreciates employees throughout the year to generate an impactful culture of recognition.

With the recent introduction of the Federal Government’s new industrial relations reform bill into Parliament raising the bar for employee rights, having an effective employee appreciation program has never been more important. 

Know what your employees want

It’s no great surprise that employee recognition and reward makes for a happier, more productive workplace. According to our latest 2024 Employee Appreciation 3.0 study, 80% of employees state that receiving rewards and/or recognition from their employer makes them feel valued while 68% say that a reward program is an effective motivator to deliver over and above requirements.

But not all businesses are listening with only 35% of respondents reporting that their employer has a dedicated reward and recognition program in place.

Reward or recognition programs can be a very cost-effective strategy to improve employee retention and give organisations a competitive edge when trying to attract new talent.

A reward program, strategically thought out and planned, will leave employees feeling valued, loyal, and motivated helping to build your bottom line.

So where to start?

Building an employee appreciation program

Creating a successful employee appreciation program requires a thoughtful approach. The emphasis should be on three simple yet essential elements: frequency, timely recognition, and flexibility.

By integrating these elements, organisations can not only elevate employee morale but establish the groundwork for a workplace that is inherently more productive.

Small but frequent rewards

Our research demonstrated that what’s important here is not providing a large bonus once a year, but that employees prefer smaller, more frequent rewards to celebrate their key milestones, whether it is completing a significant project or a work anniversary. Incorporating more frequent rewards also contributes to establishing a culture of recognition as a regular practice embraced by everyone in the company.

Findings from our survey, showed that 60% of employees expressed a desire for monthly or more frequent recognition, prompting employers to explore reward options that can be delivered frequently.

Mastering timely recognition

Another crucial factor for effective rewards is timeliness. When recognising employees for a job well done, the impact is most significant when the acknowledgment is delivered promptly. This is simply because real-time recognition reinforces the sense of appreciation in employees, motivating them to consistently perform well.

BHN’s survey data supports this, with 61% of employees emphasising the extreme importance of receiving timely rewards and/or recognition.

Additionally, businesses can enhance timely recognition by being mindful of major holiday periods, as this is when the majority of employees expect some form of acknowledgment. A small holiday gesture can set a positive tone for the entire year, making employees feel valued throughout.

Our data revealed that for 70% of respondents, a holiday gift not only helps them feel appreciated but also motivated and energised for the upcoming year.

Flexibility is key

Crafting an effective reward program involves recognising that there’s no one-size-fits-all solution, and understanding what motivates different employees and offering personalised rewards. Preferences vary widely; while some may appreciate grocery rebates, others might prefer splurging on luxury items for their vacations.

A versatile option, like a prepaid card, such as a Mastercard, eftpos, or Visa prepaid gift card, stands out as an excellent example of a flexible reward that caters to the diverse needs of the workforce.

Our research underscored the popularity of prepaid cards, revealing a clear preference among respondents. Gift cards and prepaid cards were nearly twice as sought after by employees, with 83% respondents desiring these, compared to salary bonuses (53%) or additional vacation days (44%). The gap was even wider for less-popular rewards like company merchandise (16%), food (22%), or an office party (14%).

The appeal of these rewards lies in the freedom they offer employees to spend according to their preferences, whether in-store or online. Other favoured options include single-brand gift cards, valid at a specific retailer, and multi-brand gift cards, accepted at various participating brands.

While physical prepaid and gift cards are widely appreciated, digital prepaid or gift cards that can be easily downloaded to a digital wallet are gaining traction in popularity. A majority of employees surveyed (65%) expressed a preference for digital cards as a form of recognition from their employers, with this holding especially true for younger workers and hybrid (76%) or remote (81%) employees.

Your employees are the key to business success

Whatever form of recognition or reward your organisation chooses, the crucial element here is to have an effective program in place that recognises your employees with an appropriate level of frequency, timeliness and flexibility.

This is proven to create a positive workplace culture where employees are happy, motivated, productive. It will increase employee loyalty and engagement and at the end of the day, you’re your employees and the work they do, that is the driving force behind business success.  

Will Feutrill is RVP of Incentives Australia at Blackhawk Network.