In the midst of unprecedented inflation, ever-rising energy bills, and an uncertain future for many SMEs, the tricky economic situation makes it hard to give employees the financial rewards they deserve. As individuals experience their own financial struggles throughout the cost-of-living crisis, it's no surprise that many are starting to look for new jobs with higher salaries and better benefits.
When budgets are tight, it's more important than ever for HR strategy to focus on the non-monetary rewards that can make employees feel motivated and valued without spending too much. So, what are your options for non-financial incentives that can boost motivation and retention amongst employees? Here are some of the XCD team's favourite examples of incentives that are not financial.
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Hybrid working has been a hot topic ever since people started returning to the offices after the Covid-19 lockdowns, and it has been massively popular with employees. In one major survey, 82.2% of workers said that hybrid work has made them happier and 54.7% said that it has reduced their stress levels.
We don't need to hammer home the point about hybrid working (if you're interested in XCD's view on the topic, check out our articles What have we learned about hybrid working and How to get the right hybrid working model in 2023).
With employees almost unanimously appreciating the improved work-life balance and money saved on commuting that this flexible work style offers, this is a great non-financial incentive to offer employees and reward them for all their hard work.
Work from anywhere policy
Introduced by a range of businesses from Google to Spotify, a work from anywhere (WFA) policy is a new and popular perk that is being used to motivate employees. Though the specifics of WFA policies vary between different organisations, the gist is that employees are allowed to work from anywhere in the world they choose for a specified number of weeks per year. This may be in addition to hybrid work policies where they can work remotely for a proportion of their week.
Offering a taste of the digital nomad lifestyle, a WFA policy is an attractive option for employees who want the freedom to work remotely from another city or country without having to use up their paid holiday to travel. It's a great way to treat employees and show them that they are valued. Plus, it can help them save money on their commute to work!
You may also be interested in: How cloud technology enables flexible working
Four day work week
Another policy that has been much discussed in the HR world recently, the four day work week can be an attractive non-financial perk for staff. When we talk about the four-day work week in the HR world we often focus on the benefits to the business and its human resources. And yes, studies suggest that the policy can boost productivity, but that's not the only reason that employers should consider it. The four day work week can also act as a great non-financial reward and motivator for employees, offering the equivalent of a 20% pay rise by reducing their hours while still paying them the same amount. Why not give it a go and see how employee performance is impacted?
Birthday day off
A small but significant non-financial reward that many businesses are starting to offer is an extra paid day off for an employee's birthday. Just make sure that if an employee's birthday falls on a weekend or holiday anyway that they can take the nearest workday or a day of their choice off instead.
Early finishes or summer hours
Another way to reward your staff without having to opt for expensive bonuses is to implement an early finish policy or summer work hours policy. Organisations such as PwC have already implemented a summer hours reward, which allows staff to finish at lunchtime on Fridays throughout the summer months. Other organisations have implemented early finishes on Fridays all year round, proving popular with employees. With real benefits to employee satisfaction and morale, this is a great reward for hard-working teams which doesn't cost a penny.
As many employees try to cut back their regular expenses during the cost-of-living crisis, gym memberships and exercise classes are likely to be one of the first things to go. This is why offering a free or subsidised gym membership can be a great way for employers to show appreciation for team members. By offering a free or discounted membership to a gym, you're not only taking care of employees' financial wellbeing, but their physical and mental wellbeing, too.
Encouraging the team to exercise more can even have benefits for their productivity. We know that exercise can lower stress levels and release those mind-relaxing endorphins, helping people feel more ready to face the day. Exercise makes us feel more energetic and enhances our cognitive and creative abilities, helping us work better. Furthermore, it helps safeguard us against disease, lowering levels of sickness and absenteeism in the office.
Giving staff access to gym memberships or exercise classes is one of the best incentives to reward employees and boost their wellbeing in the workplace. Plus, many gyms offer corporate rates so this incentive doesn't have to cost the earth.
Mental health and wellness programmes
In a similar vein to using gym memberships as an incentive to motivate employees and boost their wellbeing, giving them the opportunity to use mental health sessions and resources is another great way to reward their hard work. This could mean providing employees with a subscription to a mindfulness app or offering them free counselling sessions to help them safeguard their mental health.
Nearly three in four managers report seeing signs of stress and anxiety rising in the workplace due to the cost of living crisis, and 93% of these say that this is impacting employees' productivity. While many employers may not think of mental health support as a good reward for employees, it can have real benefits and show recognition of the difficult times many individuals are currently going through.
Recognition and praise
Although their significance is often overlooked, the impact of praise and recognition on employee experience cannot be overstated. In fact, in one study 36% of employees said that lack of recognition was their number one reason for wanting to leave their job.
Other rewards like a flexible work policy or an extra day off for your birthday may make little difference to employee motivation if they are not accompanied by sufficient recognition and praise. This is why praise from management and peer-to-peer recognition are two of the most important non-financial incentives for employees in 2023.
Whether it's a handwritten 'thank you' card to an employee who goes above and beyond, a shoutout to someone who has done a great job in a team meeting, an employee of the month award, genuine and meaningful recognition can be a great motivator for employees.
You may also be interested in: Employee recognition ideas for effective teams in 2023
Are non-monetary rewards enough to motivate employees?
There's no avoiding the fact financial rewards are important to employees. Especially in the current economic climate, every penny counts. And yet, although some businesses are in a position to provide raises or one-off payments to help employees with the cost of living, many do not have the financial resources to do so. This means that to keep motivation levels high and maintain a great employee experience, businesses must focus on their non-financial incentives such as the examples listed above.
But are these kinds of incentives enough to motivate workers? Absolutely, if they are implemented correctly. In one revealing survey, employees were asked to choose the most important aspects of a job. The total rewards package, including pay and benefits, was considered the second most important aspect (59%). What was number one? Work-life balance, with 67% of the vote.
When considering the non-financial ways to reward employees, it's important to keep this in mind. Work-life balance and recognition (which also featured high on the list with 37% of the vote) should be key priorities for HR when considering non-monetary rewards for employees.
Are you looking for an easy and effective way to boost recognition and praise in your organisation? Try out Appreciation, the new peer-to-peer recognition platform from XCD. Designed to encourage and facilitate recognition between employees and their co-workers as well as their managers, Appreciation lets anyone send instant appreciation to anyone in the company. It's a great way to build a supportive company culture where everyone's achievements are celebrated.
Click the button below to download Appreciation today on the Salesforce AppExchange, or get in touch with us to learn more.