The last few years have brought on massive shifts in the operating models of companies. Apart from rapid digitisation of organisation, the pandemic has also changed how companies engage with their employees. During these tumultuous times, companies have realised the importance of a technology-driven SaaS platform for HR function to help engage with, gamify, and retain their employees.
Until the onset of the pandemic, the biggest priority for all organisation across the country was to find and hire new talent. However, over the course of the last two years, the focus has shifted to retaining employees and creating an atmosphere of empathy. Businesses have been enabling this change by strengthening their rewards and recognition programs, thereby creating an atmosphere of awarding productivity, performance and efforts.
This is reflected in the growth that the Employee Rewards Market has shown over the last 2 years and an expected growth of 17-18% YoY up to 2025. The market will close to double during this time. Technology today is mainstream, and every other role is supportive of it.
Today, HR has beefed up its role to a position of a workplace custodian and not only just giving out rewards and incentives, but also engaging with employees, awarding them, and showing appreciation. It is the key role of this department to plan or chart out training and development needs and devise oneself to be a single place that helps them not only automate but also improve the efficacy of their R&R programs with the increased use of real time data and analytics. Added to this has been the increased move away from traditional methods of running R&R programs and the adoption of digital first and tech driven platforms. This increased focus will be driven by a few key trends over the next few years.
Adoption of Digital Rewards
Employees feel more valued when they see immediate rewards. This is backed up by the penetration of digital rewards increasing by 80% in 2020 and an expected 35% growth rate up to 2025. Of course, the pandemic has changed the way we work. The move to digital rewards has helped HR teams reduce the logistical challenges that come with physical gifts and the use of these vouchers to not only give incentives for superior performance but also as gifts given out across the organisation during larger mainstream festive periods such as Diwali, Durga Puja, Christmas etc.
Adoption of Specialised Platforms and Rewards Partners
With the increased spends on employee rewards and the adoption of more digital means of engaging with and rewarding employees, we see a rise in the number of organisations adopting SaaS based platforms and partnering with rewards organisations. As per a study
conducted by Outlook for the Incentive Research Foundation, more companies are tying up with third-party planners and/or incentive organisations in 2022 to help them build this culture of immediate rewards & gratification. In addition, a platform helps HR automate and gamify their R&R programs, building increased engagement while reducing the time and manual labour dependency on the running of these programs.
Peer-to-peer recognition empowers employees to appreciate their colleagues within and across teams, building greater engagement across the entire Organisation and improving interdepartmental collaboration. A recent study by the Incentive Research Foundation found that peer appreciation and being recognized publicly was the preferred choice for employees across all age groups. Another research by SHRM found that a peer-to-peer recognition model is 36% more likely to have a positive impact on financial results than manager-only recognition.
While some of these trends were being built over the last decade, one major change since 2020 is the increased focus on R&R programs by small and mid-tier organisations as well. The share in spends is expected to grow from 20% in 2016 to 35% in 2025 of overall employee rewards spent. As we move forward, we expect these changes to garner greater focus with a continuing shift towards the need for employee engagement, rewards and retention that will be driven by a larger number of employees, across functions in Organisation across different industries working remotely or in hybrid formats.
Some of the ways that we can use the digital movement to our advantage are:
- Go Mobile: It’s an app based world. Go agile and savvy with apps everywhere - Gamification – success rubs on others. If one is successful and is being promoted, others will be motivated to perform well
- Build bridges: A stronger strategic digital programme helps cleaner, transparent and better communication.
- Socialise – As in Go Social – social recognition helps and in a world where social media is just an extension of our lives, talking on social platforms about employee best performances will act like a catalyst to do even better.