Managing your budget can be a challenge, especially when considering new ways to recognize and reward your employees. Of all the factors to examine when setting up an employee rewards program, budgeting is the among most important.
So, how should you go about budgeting for your employee rewards program, and what should you know going in? Fond has compiled six things you should know when budgeting for rewards software.
1. The budget option you choose will affect how your employee rewards program is used company-wide.
There are three primary types of budget options for rewards programs: a fixed budget, a variable budget, and an allocated budget. While there are advantages to each choice, it is important to determine which model will work best for your budget.
Using a fixed budget will establish a dollar amount for employee rewards over a specified period of time. You would stay within this budget to allocate rewards with this method.
A variable budget is slightly more complex: you must establish a performance-based system for evaluating employees and deliver financial awards accordingly.
Management receives rewards funding in an allocated budget for a designated time period. Whether this is a cash reward or a points system, managers can determine exactly when they want to deliver a reward, how much, and to whom.
The option you choose is dependent on the size of your company and your goals for recognition. Allocated budgets tend to offer more flexibility and analytics and fewer manual processes, which larger enterprise companies tend to gravitate toward.
2. Get the most out of your budget by avoiding cash rewards.
There are several ways you can budget for rewards software to maximize your return. Gift rewards are more than twice as likely to be used than cash, and cash rewards tend to motivate employees less than tangible rewards. If you want your rewards program to succeed, ensure your employees take advantage of their rewards instead of letting them go to waste. Many organizations choose to use a flexible, points-based rewards platform to deliver employee recognition to maximize their budgets.
3. A single and consolidated employee rewards platform can save you money.
Managing rewards programs on discrepant platforms can be time-consuming, costly, and unscalable. Tracking metrics and understanding what rewards are successful and where to improve can be challenging, but consolidating all of your rewards programs onto a single platform alleviates these challenges.
Not only can you save yourself the headache of tracking analytics, you can consolidate the rewards themselves (for example: gift cards, experiences, and products), saving you time and money. With a single rewards platform, your team no longer has the burden of manually securing and managing rewards.
4. Align your rewards program with your company’s goals to make a strategic financial impact.
Part of the budgeting process is evaluating the success of your rewards program. Rewards programs are most successful when they are aligned with your company’s goals. Ensure your program fits with your strategic objectives and overall mission and plan your budget accordingly. For example, if your leadership team wants to improve employee retention, you can highlight the fact that recognition and rewards improve employee retention in your budget plan.
5. Understand that rewards software is a long-term investment.
Are you invested in the long-term success of your company? If so, ensuring employees feel valued is key to keeping them at your organization. The effects of rewards can be staggeringly impactful, but it’s important to keep in mind that they happen over time. Rather than launching several rewards programs simultaneously, start the process by gradually increasing your budget over time. As you see more value and carefully review the analytics, you can evaluate which programs and tactics drive the most engagement.
6. Plan your budget around personalized rewards.
Every organization has employees with varying interests, and those entering the workforce prefer a rewards experience that reflects the uniqueness of their lives. Companies that tailor rewards to individual employees retain employees for longer and attract better talent.
Customizing rewards may affect your budget, and it’s important to plan ahead to ensure you get the most out of your rewards solution. An automated and customizable SaaS solution is the best way to ensure you get the rewards you want, when you want them. To get the most out of your budget, ensure you find a configurable solution that provides personalized rewards for your employees while staying within your budgetary needs.