The emerging financial crisis has sparked a need for medium-sized businesses around the globe to monitor employee engagement, productivity and effectiveness more closely.
That is the view of Adrian Finlayson, the Chief Executive Officer of one of the biggest suppliers of reward, recognition and incentive solutions, Accumulate. “With the market downturn, business must act quickly to determine the real cost of disengaged employees,” he said. “They should implement strategies to realign employees’ focus on behaviours and work practices that deliver efficiency gains, cost reductions, retain customers and secure sales.”
Gallup research conducted in 2005 estimates that in the United States, the cost of one disengaged employee is around $13,000 each year in lost productivity. The study, which also surveyed 1,500 Australian workers, revealed 20 percent of employees are ‘actively disengaged’ at work with an estimated cost to business of $31.5 billion.
This comes at a time when many Australian businesses are also suffering the impact of slower sales conversions, downgrades in sales forecasts, extended payment cycles of accounts receivables and increased customer attrition.
The number of disengaged employees within an organisation and the level of detachment often has a multiplier effect. Finlayson says while it is not hard to spot who these people are, there are a number of strategies that can be employed to target and motivate them.
“Disengaged employees earn less revenue, work less hours, provide lower service standards, achieve fewer KPIs, take more sick leave and are more likely to be injured in the workplace. Recognition and incentive programs are a highly effective way to motivate and align employee behaviour with organisational objectives and performance goals.”
He adds: “The size of the investment made when determining a reward program and the value of staff rewards given, however, should be commensurate with the expected commercial return.”
He says identifying and defining the right behaviours to help achieve business targets such as customer retention rates, service levels and cost efficiencies, is far more challenging than setting up a straight-forward sales incentive program. Businesses often do not get it right the first time.
Recognition and incentive specialist firms can help define and reward the right behaviours. They develop cost-effective programs that eliminate risk and wasted investment and implement a system to measure outcomes quantitatively.
“By promoting behaviours that are proven to deliver outcomes, and with clear visibility into the behaviours and the results, organisations will achieve results. Making ‘behaviour rewards’ small but frequent puts desired behaviours top of mind with employees and creates an affordable, sustainable reward program,” says Finlayson.
Reward management software, which provides human resources managers a system of ‘reward points’ to allocate staff, is becoming increasingly popular. While they bear some resemblance to consumer loyalty point programs, they are very specific to the organisation and people, and they also allow employees to earn, accumulate and redeem points for their chosen reward.
Finlayson says Accumulate recently launched a ready-to-go Reward Program solution for small and medium sized businesses (SMEs), which has proven to be very valuable. “Staff can earn reward points and then shop online choosing from a range of more than 1,000 different types of products, gift card and vouchers. We offer rewards starting at low price points, such as movie tickets and $20 gift cards, as well as big ticket items such as Plasma TVs and overseas holidays to cater for high-earning sales people,” he says.
“Similar benefits can be achieved by external sales channels if loyalty programs are extended to them. This will go a long way in households that are strapped for cash or suffering the adverse impact of the current financial crisis.”
For advice about reward and recognition options for your business, call 1300 733 725 or visit www.accumulate.com.au
