How To Leverage Holiday Rewards As Year-Long Retention Tools

In today’s job market, top talent is at a premium, and employee retention has become more important than ever. Although we’re in the thick of pumpkin spice season, now is the time for employers to be solidifying their winter holiday rewards strategy. With the right execution, these rewards can pay long-term dividends for employers well beyond the new year.

To help you plan ahead, I spoke to Marina Hodges, senior director, and head of incentives marketing at Blackhawk Network. A global company that works with thousands of Fortune 500 brands, private businesses, nonprofits and other organizations, Blackhawk has distributed billions in rewards and incentives to help employers drive employee engagement, loyalty, productivity, and retention.

Gary Drenik: Should employers prioritize giving holiday gifts and rewards to their employees this year (particularly in a tough economy)? Do employees truly care about them?

Marina Hodges: Absolutely, on both counts. Employees are your most valuable asset, and they are very much hoping to receive rewards and recognition from you this holiday season. Our research “Workplace Arrangements, Rewards, and Engagement Survey,” found that 57% of respondents want to receive a reward at the end of the year from their employer. But while they want to receive those rewards, we found that only a third of employees surveyed are anticipating actually getting them in our “Blackhawk Network 2022 Holiday Branded Pay Study” conducted by Leger.

Research from a recent Prosper Insights & Analytics survey discovered that more than half of employed respondents plan to spend the same or more on gifts this year compared to last despite current economic challenges. If your employees are prioritizing giving gifts, you should be too.

Drenik: What sort(s) of holiday gifts do people want, and how do preferences vary across generations? What special considerations should be made to show sensitivity to diversity, equity, and inclusion?

Hodges: Spoiler alert: people don’t want a “jelly of the month club” subscription. And they don’t want something cringeworthy like a re-gifted trophy with their boss’s name on it or a fruit cake with a bottle of water to help wash it down (those are actual examples we came across in our research2). According to a study from Prosper Insights & Analytics, the gift people surveyed most want to receive this year is gift cards—and that number is consistently high across different generations.

And it makes sense! Gift cards can offer almost limitless flexibility for people to use as they like, and the freedom to do so will feel meaningful and be very much appreciated. Prosper Insights & Analytics found that over the last year, employed respondents are steadily noticing price increases across the board for groceries, dining out, apparel and accessories; gift cards can help pay for any of these items, or can be used to save for larger purchases. People can also treat themselves and buy something they wouldn’t normally have splurged on (think shopping sprees and dinner out with friends or family). People have needs and they have wants. Gift cards solve for both by empowering people to buy whichever they prefer.

Holiday gift card rewards can actually be competitive differentiators when retaining and attracting top talent—particularly for younger generations. Our 2022 Holiday Branded Pay Study found that four in 10 employed respondents would consider leaving their current role if a new employer were to give out holiday gift cards. Younger employees are twice as likely to consider leaving for holiday gift cards than older employees.

Unfortunately, employees report that the majority of employers aren’t dishing out the gifts they most prefer; only two thirds of employees, report being satisfied with their employer’s holiday gift. This is a huge, missed opportunity.

Another potential landmine is ensuring you acknowledge employees’ different backgrounds, cultures, beliefs and so forth. Some of your employees may not celebrate winter holidays, and with several different religious observances late in the year, cookie cutter or hyper-specific approaches are not the way to go. Try to create some pomp and circumstance around the whole season—focus on a united celebration to the closing of a successful year, the prospect of a bright year ahead and recognition for your hard-working teams.

Drenik: How can employers reach employees that are separated geographically as part of an increasingly globalized workforce?

Hodges: Lean on technology and don’t be afraid of going digital. Gone are the days of walking around an office handing out company swag; today, employers need to be forward-thinking in their approach to distributing employee gifts. As the world gets smaller—and as people increasingly move into hybrid work arrangements that enable them to work from pretty much anywhere—your employees aren’t likely to all be in the same place and it will behoove you to find ways to reach them all where they are.

For example, you may be planning a virtual holiday party via a video conferencing software. Blackhawk offers technology that enables you to send your employees a holiday gift card reward right within that platform—all at once. With a little creativity, you can make this surprise moment theatrical and fun—and that delivery, combined with the ability to personalize gift cards, will show employees you put thought, energy, and care into acknowledging them. Plus, despite physical distances between them, employees will have experienced a unifying, positive company experience that can help nurture your culture.

Drenik: Why does a relatively small gesture around the holidays have such a lasting impact?

Hodges: People want to be recognized and thanked for a job well done. Our research found that receiving a reward or recognition would increase 83% of respondents’ productivity and loyalty to their company. With an astronomical voluntary turnover rate in the U.S. right now (think tens of millions) and rampant disengagement (think “Quiet Quitting”), it’s never been more important to treat your employees how they want to be treated. The right rewards and recognition can pay serious dividends when it comes to retention and engagement and can save you money in the long run despite the initial out-of-pocket expense. What costs more? Recruiting, hiring, onboarding, and training a new employee? Or doling out some gift cards?

Drenik: How can employers leverage holiday rewards to help keep people engaged and loyal to the company throughout the year?

Marina: Use the holidays as a jumping off point. Very few people want once-a-year recognition; half of respondents to our recent survey want to receive monthly or quarterly recognition. Employers can regularly check in and reward employees to keep their businesses running smoothly and their employees happy.

Let’s go back to the gift card example. Many prepaid cards are reloadable, so after giving them out during the holidays, employers can offer spot bonuses and reload cards throughout the year for ongoing recognition. Employees will love the rewards and the regular opportunities to earn them.

Drenik: Marina, thanks for sharing this intel ahead of the holiday season. It’s safe to say that employers should be using the above insights as a playbook for how, and why, to thoughtfully approach holiday rewards season for year-round return on their greatest investment: their people.