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July 24, 2023

To retain talent, think beyond raises and cash bonuses

Originally published here in Benefit News

Promotions and compensation increases are great ways to show employees that they're valued, but they aren't always enough.

According to a recent report from workplace insight platform Gallup, 65% of employees prefer non-monetary incentives instead of monetary rewards, meaning that if employers want to retain talent,they have to think beyond raises, gift cards and cash bonuses. But what does "non-monetary" specifically entail — and can those rewards really be just as valuable?

"With monetary rewards, you're effectively putting a very specific dollar value on something," says Aaron Rubens, CEO and co-founder of Kudoboard, an employer-facing incentives platform. "Non-monetary types have nothing to do with the dollar value. It could be simply recognizing the person or even something that costs money indirectly, like sponsoring a trip of some kind or an educational opportunity that doesn't necessarily have a cash equivalent."

Kudoboard partners with companies' HR departments to offer a number of money-free solutions they can use to acknowledge their workforce during milestones and special occasions, such as birthdays and anniversaries. They provide separately-priced tiers broken down by size, sector and business function, all of which offer virtual greeting cards for various occasions, collages and slideshows. The celebrated employee can then opt to have their occasion made public so that colleagues can congratulate using an extension that sends the employee a Slack notification with a quick note.

Employers can also use the platform to celebrate large-scale events such as Veteran's Day, or even to announce longer festivities like Pride month campaigns.

"We wanted to move past the 'I give you X number of points and you use it' and focus on how to get people to connect authentically — especially now that organizations have become so much more hybrid and spread out," Rubens says. "In the old-world setup, everyone was sitting at their desk five days a week and it was easy enough to pass around a congratulatory card. It was still a little bit inconvenient if you wanted to hide it from the person or if not everyone was there, but it was still doable, because we were all in the same place."

Rubens is right; the shift to a more virtual work environment has detrimentally affected employee recognition. According to a 2022 report from workplace insights platform Zippia, 29% of employees hadn't received recognition for good work in over a year, if at all, and 80% of employees said they would work harder if they felt better appreciated. Strong employee recognition programs were found to reduce turnover rates by 31%, according to Zippia, which makes them critical to employer retention plans.  

"One of the challenges with a value-based approach is that it can almost have the opposite effect employers want, because they start to think about whether the thing they went above and beyond to do was worth it," Rubens says. "When you give people a chance to connect and really thank each other around things that matter in your organization, it feels more genuine because there's no transactional basis that underlies it."

That's not to say that monetary incentives don't work or aren't good strategies, according to Rubens. Employers have the choice to purchase a gift card through Kudoboard, too, but the goal is to pair that gift card with one of their other non-monetary offerings so that it creates a more concrete and memorable experience for the employee. Because although it may seem more effective to address something as broad as employee recognition with something concrete like dollar amounts, it doesn't always make it the right strategy.  

"When an employee leaves, it isn't always because of their salary or their benefits or anything concrete," Rubens says. "Sometimes it's because they don't feel like their boss appreciates them. And [employers] all know that intuitively. So how are you making sure that you're really paying attention?"