Every rewards platform operates under a different business model, and choosing the right employee rewards solution requires careful research and consideration. Evaluating these solutions can be overwhelming.
Fond has spent years in the employee engagement space researching various providers and the differences between their offerings. To make this process easier, we’ve outlined four key things to consider when choosing your employee rewards and recognition program.
1. Review the rewards points-purchasing process.
Rewards points are purchased through an employee rewards provider to be distributed to your employees. These points can then be redeemed for items, discounts, or experiences as a way to reward employees for great work.
When your company is researching your rewards platform, consider the way various providers charge for rewards points. Many vendors add additional service fees in their contracts, meaning rewards points cost more than how they initially appear. For instance, if your points purchasing process includes a 15% service fee, purchasing $100 of points would actually equate to $115.
Other solutions offer points purchasing processes without service fees, so what you pay for is exactly what you get. Platforms that offer this solution are more straightforward to purchase from so you can plan your budget around how many points you want to buy, not additional service fees.
2. Have a thorough understanding of point breakage and expiration.
A handful of employee rewards and recognition platforms require you to purchase a certain amount of points when you first sign your contract. They can also require customers to purchase a specified number of points monthly, quarterly, or annually. If these points go unused, you end up locked into this platform, increasing the length of your contract. And if you decide to transition to a new platform, you’ll likely end up losing the money spent on those remaining points.
Consider a platform that enables you to purchase rewards points when you want them, based on the budget that works for you. I suggest selecting a platform that enables you to adjust your points purchasing at any time to fit your budget so you have more flexibility and transparency to make business decisions.
Point Expiration and Turnover
Some platforms allow rewards points to expire, which means those points are removed from your reserve and transferred to the vendor after a certain date. These platforms tend to address employee turnover the same way; when employees with points leave your company, their points are returned to the vendor. Expired points and point leakage or breakage can cost companies thousands of dollars in unused points.
Other platforms provide more flexibility to purchase rewards points anytime and within your allocated budget. Consider a platform that returns unused points directly back to you and does not set an expiration date on points. Plus, your finance team will appreciate the cash-flow benefit a flexible points purchase model provides.
3. Do your research about hidden fees on different platforms.
Certain providers markup items on their catalog, even if those items are discounted on other websites. These item markups might not be reflected until you receive your invoice, which can cause confusion during the purchasing process. Be sure to research which platforms include these fees so you know exactly what you’re paying for.
I recommend selecting a platform with no item markups so you can avoid these hidden fees. This way, you get the transparency you need to budget appropriately for your rewards and recognition program.
Be on the lookout for extra processing fees, additional shipping and handling fees, fulfillment charges, or extra taxes when purchasing an item. Consider a solution that displays exactly how many points an item is worth so you know exactly how much an item will cost. When your employees use their points on a reward during checkout, they won’t be surprised with additional fees that compromise their discount.
4. Evaluate licensing costs.
HR leaders looking for a new solution often add multiple platform administrators to help manage the purchasing of rewards points, delivery, and routine platform maintenance. Many providers have a limit to how many admins can be enabled on the platform and charge additional fees for extra licenses. These providers tend to limit to how many users their platform can support as well, which can add extra costs to your monthly or annual software fee. Lastly, be on the lookout for expensive caps on normal platform usage, like solutions that charge extra for exceeding a number of recognition events sent.
I recommend that anyone looking for a rewards platform should investigate platforms that do not charge per-user, but instead allow for unlimited admins and users for a flat fee. A fixed rate provides more transparency for how much you spend on your solution and the flexibility to add additional admins and users.
Transparency and Flexibility
HR leaders need flexible, continually improved, and transparent rewards solutions. Before you buy, ask to see how to purchase rewards points and how funds are added to the company bank within the platform, ask for real-time budget dashboards, and review a reward purchase from start to checkout. Find a solution that truly empowers your workforce, otherwise, your team might be buried under hidden fees, unused rewards points, and an inflexible solution.