Do Employee Incentive Programs Work?

The employment market is changing. Some call the current shift the Great Resignation, while others call it the Great Reshuffle. No matter what you call it, it is hard to deny that employers and employees have changing expectations. What role do benefits and incentives play in employee retention and satisfaction in this environment? Do they work? And how can they be designed to have the biggest impact on employee satisfaction?

What Do Experts Say?

If designed well, incentive programs and other benefits help employee recruitment and retention. Claire Barnes, Chief Human Capital Officer at Monster, spoke about this topic on the HR Works podcast. She explains that when companies don’t offer benefits that meaningfully help employees, employees “look for alternatives, which is a risk from a retention perspective for employers.” For example, more than a third of employees surveyed are careers in some way, but only 17% of employers offer paid leave above the statutory minimum. This paid leave can be crucial for employees to care for their families properly. This lack of compensation can prompt employees to look for work elsewhere.

What is Included in an Incentive Program?

So what does a well-designed incentive program look like? The first step in designing an effective incentive program is listening. Rather than guessing at what benefits will be most useful to your employees, ask them. No one will know better than them what services they need. Barnes uses a monthly randomized survey to collect employee feedback at Monster, and she bases her benefits decisions on the results. If benefits must be cut to save costs, this process will also help you justify your decisions and hurt the fewest people.

Second, prioritize health, professional development, and flexibility. In the wake of the pandemic, employees are indicating that they value health and well-being more than ever. This bucket covers the obvious, such as generous health insurance and dental care. However, there are also less common health benefits, such as support for childcare and emergency care, access to counseling, and self-care days. 45% of those surveyed by Monster also say they value an employer that provides them with training and development opportunities. So, consider how you can help your employees prepare for future roles by instituting a training program. And flexibility is the new normal after the changes brought by COVID. This includes generous or unlimited vacation time, the option to work remotely, and parental leave.

Encourage the Culture

Finally, create a culture of taking advantage of the benefits offered. Offering unlimited PTO is great, but it can be counterproductive if employees feel that taking extended leave would be frowned upon. This can only be fought by communicating expectations to managers and having them lead by example. As Barnes says, “Culture starts at the top, but it sticks to the walls.” Having managers prioritize their well-being over productivity, use the available benefits, and share that transparently with their team will help show employees that they can too.

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