Employers with recognition programs may be missing the mark in engaging younger employees, according to a new study by the Conference Board of Canada.
It found only 37 per cent of organizations are taking today’s multigenerational workforce into account when designing their rewards and recognition programs.
The study suggests millennials may not appreciate long-service programs because they likely won’t be around long enough to reap the rewards, since past research indicates that cohort goes through an average of about five different employers over a 10-year span.
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Also, while the majority of employers celebrate long service, retirement and employee performance, they typically spend less of their rewards and recognition budgets on the latter areas. More than half (56 per cent) of the budget goes to long-service programs, while only 14 per cent is for corporate recognition. Organizations spend the least on life events and peer-to-peer programs, the study found.
“The majority of organizations use their rewards and recognition programs to increase employee engagement,” said Nicole Stewart, principal of the Conference Board of Canada’s compensation research centre, in a release. “If this is the primary objective of the program, it is important to look at what drives engagement.
“There also appears to be a disconnect between where organizations are allocating the bulk of their recognition budgets and what might bring them the best value in terms of employee satisfaction.”
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The study also found employers don’t typically spend much on recognizing high-performing employees. It found many employers incorporate non-monetary rewards, such as electronic cards or handwritten notes, into their peer-to-peer recognition programs. In fact, 37 per cent of employers use only non-monetary rewards, according to the study.
“Recognition of outstanding effort and achievement does not need to be costly and programs can be tailored to suit a changing workforce landscape,” said Stewart. “In fact, many organizations have found that they receive the most value from their peer-to-peer programs because of both the low cost and reach.”
In 2016, organizations spent, on average, $139 per full-time employee on rewards and recognition, according to the study. At $161 per full-time employee, the private sector spent almost double ($161) what the public sector allocated ($84).
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