Feature: Motivation: Loyal standard

A handsome carriage clock or a gold watch are lovely gifts to get, but these are no longer viewed as a suitable reward for years of faithful service. “I believe that long-service awards work, but long gone are the days when the prospect of a gold pen would incentivise you to stay,” comments Yvonne West, manager of Sainsbury’s Business Direct. In this digital age, people expect to be rewarded regularly, flexibly and appropriately.

“The days of being handed a carriage clock after 20 or so years’ service are a thing of the past,” says Karen Collins, head of HR and development at motivation and communication company BI. “Employees are not engaged by these sorts of products. Not only do they hold appeal to a very small percentage of people but they are also predictable and not particularly useful.”

She argues that the most appealing offer is the “freedom to choose”. While BI’s staff have access to the company’s own online points-based rewards solution, AwardperQs, this approach has underpinned growing demand for online catalogues, vouchers and other multi-choice incentive products for long-service schemes.

This lies at the heart of the offer at Michael C Fina Worldwide, which has cornered the market, not just as far as URLs are concerned, with its customised online catalogues at LongService.com. “The main criteria is freedom of choice so the more selection available, the better,” explains Sheila Sheldon, director of European operations.

Kuljit Kaur, head of business development at P&MM Motivation, admits that carriage clocks are still the first thing that people think of when it comes to long service but points out that prepaid technology has brought the awards into the 21st century. “In today’s market, trying to find the ideal reward for such a broad mix of people, ages, experiences and lifestyles is a tough one that can take up precious time and effort,” he says, adding that this has made P&MM’s Ultimate gift card relevant to the long-service market.

Kevin Harrington, research and development director at SayShopping voucher supplier Sodexho Pass, says relevance is key to making the awards motivational. “The reward needs to appeal to the employees’ interests and passions and should be executed in the most suitable way,” he says. “Whether it’s by offering multi-purpose vouchers or a catalogue point scheme, employers should allow their staff to choose their own personalised award – be it a once-in-a-lifetime holiday or a state-of-the-art flat-screen TV.”

Adam Maher, director of loyalty at Maximiles, which runs the ipoints scheme, agrees. “To achieve maximum appeal and impact for each individual in an increasingly diverse workforce, employers should allow employees to choose from a range of tangible and aspirational awards,” he says. “These could include memorable events such as a holiday of a lifetime which can have a lasting impact in the same way as a valued physical gift.”

According to research by Michael C Fina, it is “lifestyle” products that are the number-one choice for employees for long-service awards. This reflects the increasingly long hours and stress that staff are under, says Catherine Forrest, business incentives manager at House of Fraser. “This is the reason why many staff retention programmes are increasingly experience based because the company wants the employee to get out and about and enjoy their ‘down time’ by undertaking a different activity.”

At the same time, sabbaticals or additional annual leave are a more intangible award offered by many employers for long service. “Companies are now offering employees the chance to ‘buy’ extra days’ holiday because they realise that cash incentives are not necessarily high on everyone’s agenda but spending more time with their family is. ‘Duvet days’ are also becoming more prevalent, which all help reduce absenteeism and sick days, and which make for a better working atmosphere.”

This raises the question of what impact can long-service awards have. Can these schemes really help to retain staff, who are unlikely to choose to stay at a company simply because they will get a holiday voucher after 10 or even five years? But Forrest explains: “Long-service awards are popular as a mark of appreciation and, as such, can help to boost staff retention rates.”

Collins at BI admits that it is difficult to measure the exact value of long-service awards when it comes to staff retention, but adds: “There is little doubt that they play an integral part in engaging employees and recognising and rewarding over their time with the company. Feedback from employees at BI has indicated that long-service awards are highly valued. In cases where the reward fits the audience and is motivating and engaging to them, there is little doubt that long-service awards would help to retain employees as they demonstrate that the organisation cares for and values its employees and wants to reward their loyalty and commitment to the company.”

Improving staff retention has a direct impact on profitability, with the cost of replacing one member of staff estimated by the Chartered Institute of Personnel and Development at £8,500. “The savings from implementing a long-service awards scheme start here and they can often become self-financing,” says Sheldon at Michael C Fina. “The bottom line is that a happy and loyal workforce is a more productive workforce, and making a big deal of recognising their important contributions goes a long way towards achieving this.”

With staff turnover levels rising over the years, Sheldon says Michael C Fina now supplies awards for anything from three months – ensuring that they are about loyalty rather than age, in line with age discrimination legislation. Julie Rosehill, sales director of The Voucher Shop, says the timescales have generally changed from rewarding after 25 years to just five years. “Employers are looking to reward staff at shorter time intervals in order to encourage loyalty and engagement.”

In terms of the amounts involved, values of around £30 and £50 are now standard for marking 10 years’ service, says Tracy Aslam, head of incentive business at The Kingfisher Gift Voucher. She also says it is important to make long-service awards timely. “The award should be presented in the month of qualification rather than presenting to everyone qualifying in any given year on just one or two points during that year,” she insists. “The recipient appreciates the fact that the award relates specifically to their contribution to the business, and that the employer has made the effort to mark the occasion at the right time.”

However, Rosehill notes that applying shorter time-scales carries a greater administrative burden, which has been another factor in the growth of off-the-shelf solutions, such as The Voucher Shop’s new Long Service and Anniversary Awards offering.

But, as she also points out, these schemes are most effective if they are integrated with broader motivation programmes, such as sales incentives and recognition schemes. “Long-service awards alone cannot improve staff retention, and it is imperative that flexible recognition and incentive rewards such as vouchers are also used on an on-going basis to provide an instant reward for a job well done.”

This means that long-service, still the domain of HR departments, is increasingly linking in with sales and marketing. Maher at Maximiles suggests that long-service can form part of a solution that will “incentivise a range of behaviours across an organisation such as sales, lead generation, customer satisfaction, productivity, punctuality and attendance at work”.

And the future is even more holistic, according to Ray Jobsz, managing director of EIC, which supplies long-service awards through its online points-based Essential Collection. “With online solutions becoming increasingly sophisticated, we are likely to see a continued evolution and progression towards e-based motivation, long-service and staff retention schemes,” he explains. “In the future, we envisage this to form one part of an online social networking solution, where products, services, events, corporate updates and even social occasions can be targeted right down to individual users, ensuring that corporate schemes no longer simply form an additional point of reference for employees but actually become day-to-day lifestyle products in themselves.”