An acceptable Rewards and Recognition (R&R) program used to mean an opportunity to earn points redeemable for merchandise or additional PTO days. While such initiatives still have value, forward-thinking HR teams are looking to more sophisticated offerings such as personalized employee experience and mobile-enabled apps as the new standards for R&R plans.
With unemployment hovering around four percent and companies competing for the same small pool of available talent, employee engagement and experience are quickly becoming priorities for retention and referrals. Yet, talent management teams struggle to implement such programs. An approach might be effective one year, but then something changes. The talent pool shrinks. Hiring processes become more complex. People are demanding real-time interaction in their personal and professional lives, and that applies to recognizing workplace contributions.
According to a recent Everest Group study, R&R service offerings – with a growth rate of ~14% between 2016-2017 – represent one of the fastest growing HRO [HR outsourcing] markets. R&R providers increasingly want to expand their roles from program administrators to strategic partners who can deliver everything from consultative support, advanced analytics and AI-based chatbots to employee wellness and performance management services.
No more one-size-fits-all
R&R services are gaining traction due to the changing nature of the workforce, which includes a mix of five generations; contractors working alongside full-time employees; and an increasingly global footprint. Moreover, millennials frequently review employers on social channels and company review portals, meaning that good employer branding goes hand-in-hand with strong performance management and R&R programs. Companies must understand what motivates individuals and teams instead of relying on assumptions that may miss the mark completely.
How can organizations implement customizable R&R programs supported by multigenerational, diverse employees – without burdening HR and talent management teams?
R&R becoming sophisticated
Fortunately, new technologies are making it more efficient to offer personalized R&R solutions, monitor performance metrics, recognize peers and create goal-based incentive programs. Benefits of such solutions include:
- Reducing administrative burden and cost, increasing scalability and agility – In-house R&R programs are time-consuming and costly. A simple service anniversary recognition requires several administrative tasks, from identifying the person to be recognized to securing the reward. As organizations grow, the process becomes more complex and time-consuming. New R&R solutions are less costly, reduce the administrative burden and help HR enhance the employee experience. External R&R providers also enable companies to scale up and down quickly, increasing enterprise agility.
- Mitigating risk – External R&R programs deliver insights into rapidly changing employee engagement drivers and business needs. This visibility is key for helping HR assess the program’s impact, thus mitigating risk and helping companies regulate rewards spend.
- Decreasing attrition – Such insights preempt employee attrition and/or shed light on the reasons for attrition, aiding in taking corrective actions beforehand to avoid losing star performers.
As R&R providers become more consultative partners and companies increasingly recognize the benefits of outsourced R&R, this space will continue growing.
R&R innovation
We expect to see more holistic, mobile-enabled applications to support personalized feedback, recognition, rewards redemption, order tracking and decision support tools as well as tips for training and development. Personalized experience and rapid response will be crucial.
Technologies that will emerge:
- Prescriptive and predictive analytics help gauge the impact of R&R plans in terms of performance, coverage and costs; and predict recognition needs of employees based on past performance and outcomes.
- Reporting and descriptive analytics help with tracking rewards processing; maintaining records of eligible participants; scheduling orders; monitoring costs and more.
- Robotic process automation reduces cycle time, streamlines delivery and can be leveraged with AI to perform transactional work.
- Future applications of AI in R&R services might center around decision support and reward selection; NLP-enabled chatbots; and AI-enabled Interactive Voice Response (IVR) systems.
Employers are investing considerable resources to attract and retain the right talent in our rapidly evolving environment. Creating a culture that demonstrates how you value employees will increase retention; and an exciting, innovative R&R program that employees love to talk about can be a viable part of your recruiting strategy. Sophisticated R&R programs offer business insights, advanced research and technology to deliver a personalized employee experience that can give you a competitive edge.