The office Christmas party has long been a staple of the festive season. A time for junior and senior staff to mingle as they celebrate on the company’s dime. But it’s not just a nice thing for businesses to do, celebrating staff can have tangible effects. A report by McKinsey has shown that workplace recognition increases effectiveness by over 20% and can improve overall company engagement by more than 50%. At the same time, happy staff will stay in jobs seven times longer than unhappy staff, while also providing customers with better service.
But times are changing – now, Blackhawk Network finds just one in ten employees says they want a Christmas party. The cost of living is also rapidly rising around what is traditionally one of the most expensive times of year. In other research from Blackhawk Network it found that almost all consumers (97%) are concerned by the cost of living, and 70% are going to be cutting back this Christmas season compared to last year.
But with Christmas parties out and businesses and employees alike having to cut costs, how can they show employees they are appreciated while both gaining during this difficult time?
The importance of the right gift
What staff really want is a meaningful gift – something their employer has put thought into, rather than an obligatory handout at the end of the year. Blackhawk Network’s research reported that 86% of employees felt valued when they received rewards like gift cards. Unfortunately, the research also found that 60% of employees thought their employers were bad gifters – with some handing out empty hamper baskets, out-of-date food, and even toilet roll.
There is a clear link between staff retention and Christmas gifts. Emerging talent is three times more likely to think about leaving a company if they don’t receive holiday gifts during the Christmas season, while 79% say rewards make them want to stay with their company for longer. And more than ever, employers need to remain competitive, as two thirds of employees look for more fulfilment in the workplace.
Rewarding employees is a great way to do this. Research by Springworks found that 92% of workers are more likely to repeat an action if rewarded for it, while 81% of respondents in Blackhawk Network’s research admitted that rewards encourage them to work harder.
What employees want
However, while it’s not that difficult to provide employees with presents that knock toilet rolls or empty hampers out of the park, providing something meaningful can present problems. Staff want to be rewarded with something that aligns with their needs, which is why gift cards are the favourite Christmas gift for employees to receive. Almost two thirds (64%) of employees would prefer to receive a gift card, compared to bonuses (44%), additional holiday (30%), good gifts (19%), and a free lunch (14%).
Multi-store gift cards like Blackhawk Network’s One4all can be spent in over 140 retailers nationwide. Recipients receive a high level of flexibilty that allows them to spend the card on whatever they want. This works perfectly for companies who are trying to cater to a wide range of employees. Blackhawk identified over 150 different hobbies in its research, and being able to spend your Christmas gift in places as diverse as Waterstone and B&Q will make sure employees get the most out of it.
Why people love gift cards
If you’re trying to offer flexibility, cash may seem like the obvious option, but bonuses are often also associated with additional compensation that can disappear within the family budget. At a time when employees are looking to feel appreciated, employers should be providing staff with rewards that recognise their specific performance. Gift cards give them the opportunity to create memorable experiences or spend money on items they might otherwise not buy.
Gift cards also allow businesses on a budget to give their employees better rewards. Any amount under £50, including gift cards, benefits from the HMRC Trivial Benefit – this means that neither employer or employee has to pay tax or national insurance on it. So, it costs employers less for employees to reap the full benefits of their gift.
Gifts all year round
While Christmas is an obvious time to reward employees, it shouldn’t be the only time businesses do it. Small, tailored and consistent rewards throughout the year will help employees feel recognised, and in return businesses will be rewarded with a happier team. But to provide this requires businesses to invest in a diverse rewards and incentives package from which all employees can benefit. This is particularly important at a time when almost half of Gen Z employees are constantly feeling stress, and have the flexibility to change jobs, meaning they will leave for places that reward them properly.
We may soon see the end of the Christmas office party, but it is more important than ever that businesses show they appreciate their employees for the past, difficult year. It’s good business, but, ultimately, it’s also just the right thing to do as a good employer.