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Employee recognition programs help create a collaborative, encouraging workplace where in employees are engaged and working to their full potential. With the benefits of recognition programs having been proven in companies across North America, why aren’t all companies implementing them?

For smaller organizations or those on a tight budget, funding an employee recognition program seems like a great idea in theory, however financially impossible.

Here is the oversight: Employees don’t have to be recognized through hefty monetary rewards! Research shows that when employees are already being fairly compensated, cash or near-cash rewards do not yield the highest engagement levels.¹ Companies with limited funding can institute a recognition program where acknowledgments are given not in currency, but through peer-to-peer acclamation, work autonomy, or sincere private thank you cards. Adhering to a realistic budget for your organization merely requires being knowledgeable about your options and establishing an effective program: with an informed plan, it is possible to achieve all your company objectives on any budget size.

It is a common fear amongst employers that if they don't give monetary rewards or bonuses, their employees will feel undervalued and more likely to seek out another job. In fact, the key to retaining talent and promoting work engagement is to create “constant gratitude.” Constant gratitude does not require a large financial investment, but a creative one. By understanding the generations which make up your employee base, you are given insight into the modes of appreciation which resonate with each age group. The ability to recognize, retain, and invigorate your staff is not a question of dollars, but of insight and sincerity.

There are currently five generations working simultaneously within the workplace.²  The individuals that make up these classes are shaped by various age and life-stage demographics. The nuances within these influences make any research on the characteristics of an entire generation a general evaluation. However, even a basic understanding of the forms of recognition your employees will best respond to can save you time and money.

“You cannot manage what you don’t understand. You won’t be able to manage outside of your generation unless you can see through all of the generational lenses.”

— Tammy Hughes, CEO, Claire Raines & Associates

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If not money, then what?

Consider your generation.

‍Traditionalists, also known as The Silents (1900-1945), are now a generation nearing the end of their presence within the workforce. Statistically the most loyal generation, these employees grew up before the surge of social media and technology and prefer to have their time and commitment recognized privately.

If you have traditionalists amongst your employees, they are nearing retirement and likely occupy a higher position within your company. For a traditionalist, a personalized thank you card is likely to reinforce their already dedicated behaviour. Because these employees hold the development of interpersonal communication skills in high regard, recognition can also come in the form of mentorship: have a traditionalist take a younger or new employee under their wing to show you value their skillset and wisdom.

‍Baby Boomers (1946-1964) are the generation of competitive multi-taskers who value work and career advancement over a work-life balance. Most Baby Boomers crave challenging, creative work in their pursuit of self-gratification.

Give a Baby Boomer flexibility, their linear focus on career and security means they will highly value a day off from all those extra hours. Boomers also appreciate being shown respect through titles or public recognition; by highlighting their achievements in a formal setting or opening an opportunity for skill training or work experience, you are demonstrating high regard for their performance.

Generation X (1965-1977)Often incorrectly labelled as slackers, Generation X established the work-life balance mentality and believe in accomplishing work as efficiently as possible to leave more time for ‘living.’ Whereas traditionalists and millennials thrive in team settings, this generation generally prefer to work alone and focus on conquering challenges.

Like traditionalists, these employees prefer to be recognized in private over public praise. Their long-term goal is hold a job which enables a balanced lifestyle. Thus, they are consistently looking for ways to build their resume skills. Recognize Generation X employees by offering opportunities for personal development or enlivening their work routine with a new experience such as a conference or out-of-office work.

“For rewards and incentives, I would emphasize experiences more than anything—travel, project experiences related to work and their career.”

— Buddy Hobart, Author of Millennials and the Evolution of Leadership

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Millennials (1977-1997) grew up being recognized by their parents for every little thing, often being praised not for success, but just for showing up. Millennials have a difficult time comprehending why they shouldn’t be able to work where and when they like. Consequently, freedom, autonomy, work-life balance, and frequent feedback are top values.

Cost effective recognition ideas for these employees include strategic leaderboards, which celebrate various contributions from sales goals to commitment; the ability to work remotely or be given time off work; or an informal method of liking, sharing, and posting through which to give and receive recognition.

Constant Gratitude for All Generations

An option to attain ‘constant gratitude’ on a budget is to integrate an Employee Recognition Software that allows you, management staff, and employees to recognize one another with ‘high-fives’ or ‘badges.’ The absence of cash or purchased gifts as a reward means the cost of the program is reduced to a basic, per employee registration fee; enrolled participants can view all the recognitions throughout the company and comment on each, compounding a one-time recognition into a team conversation.

Millennials especially will adapt quickly and thrive in this program format. Known as digital natives, their social connectedness is second nature and implementing an online communication platform echoes their everyday discourse through social media. The software also offers a balance between public and private recognition enabling individuals who prefer not to have a spotlight on them in front of a crowd to still feel appreciated without any embarrassment. Although there is no monetary reward, the nature of the program- where an individual is recognized for a distinct behaviour- fulfills the need for consistent and specific feedback, which defines genuine constant gratitude.

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Your company can't afford NOT have a recognition program - book a demo with Qarrot to see why!

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Sources

• ¹ Incentive Research Foundation

• ² Forbes.com

Recognizing the unique Millennial

The top three challenges for HR organizations today are employee engagement, turnover rates, and succession planning. Though these issues are not new, former strategies just don't seem to have the same effect and the shift has left employers - especially those with Millennials in their ranks - scrambling for answers. In the past, reward systems were monetarily based, providing employees with compensation for their time and extra efforts with strictly financial compensation. The ineffectiveness of this method in retaining and motivating employees is indisputable.

• 37% of U.S accommodation and food services employees say that they had or will quit their position in their current place of employment within a 12 month period.
• The majority of employees in 2015 were reported as “not engaged” while another 17.8% were “actively disengaged”
• For the majority of 2015, monthly averages for consistent employee engagement hovered between 31.5% and 32.1%
• One-third of new hires quit their job after about six (6) months.¹
• Nearly four out of five (78 percent) of business leaders rank employee retention as important or urgent.
• In 2015, 40% of companies reported that with the arrival of lower unemployment rates, the difficulty in finding and maintaining talented individuals has heightened their concern for loss of personnel.

So, what has changed?

‍Millennials.

As of 2015, Millennials make up the largest section of the global workforce and will compromise nearly 75% of personnel by 2030.² The average tenure of a millennial employee is only two years and the key to building a strong, profitable business in 2018 rests in the ability of a company to redirect this pattern. Millennials may have a bad rap for being on cell phones and a general sense of entitlement, but here is the truth: Millennials aren't lazy, they have specific needs.

Psychologically, every human being experiences a direct correlation between their perception of self-value and their state of happiness. This is even more pronounced in millennials, where monetary rewards are secondary to the feeling of personal growth, engagement, and significance within a company. With every resource at their fingertips, millennials are constantly looking to jump into a role that will fulfill these elements. The employer then is fighting a perpetual battle against the threat of the “next best thing.” In order to win the fight, you have to understand your employee's criteria.

Fuelling your employees

Retaining valued talent in your business depends on your employee engagement levels. For Millennials, the single highest contributor to this is their belief that they are truly valued for their unique strengths. Recognizing the influential role an employee plays within your company bolsters their confidence and boosts their comfort with expressing ideas amongst coworkers and superiors. If a millennial believes their employer recognizes them as an asset, they respond by fully applying themselves to maintaining high standards, simultaneously satisfying a need for self-growth and importance.

“More than ever, they want to be part of a workplace culture that allows them to discover their own identity and inner confidence so they can unleash their full potential. (Glenn Llopis, Forbes 2014).

”Currently, less than 40% feel so engaged.³

Because Millennials base their performance on output rather than time spent on a project, it is essential that they feel their commitment to quality is noticed. According to a recent survey by TriNet, one in four millennials feel in the dark about their work performance; As it stands, 8/10 Millennials think they deserve to be recognized more for their work. Only 54% of female employees say they are recognized when they do excellent work and only 61% of males.⁴ That's an average of 43% of employees operating under the impression that they are not valued!

‍The answer to these statistics is relatively simple- Workplace culture is everything. Traditional superior-to-employee encouragement, though beneficial in its own way, can often feel contrived, insincere, or infrequent to an employee. Peer-to-Peer Recognition fosters camaraderie, heightens energy levels, and alleviates preoccupying worries about work performance which deduct from creative spirit.

You can completely re-establish your work culture by integrating a peer-to-peer recognition program. By encouraging staff to communicate with one another on their successes, you are cultivating company-wide collaboration. Values-based recognition from a peer is like getting a compliment from a friend on your outfit or touchdown in high school- instantaneously that person is invigorated with new energy to duplicate their success or surpass it. The cycle peer-to-peer recognition promotes quickly takes on a life of its own, as each compliment given encourages the receiver to then offer one of their own to another co-worker.

Did you Know? ‍

86% of values-based recognition programs show an increase in worker happiness.

Peer-to-peer recognition benefits

Peer-to-peer recognition is statistically 35.7% more likely to have a positive impact on financial results than manager-only recognition. In 2015, 41% of employees said that if they were given the tools to comfortably engage in peer-to-peer recognition, they would gladly do so. Once a program had been established, 58% of “happy employees” (individuals who considered themselves fulfilled by and content with their job) reported giving regular peer recognition.⁵ Staff who are empowered to recognize other employees are twice as likely to identify themselves as highly engaged while 90% of employers say their employee recognition program had a positive impact on overall employee engagement.

These interactions then, are not one-off comments, but authentic conversations progressively developing gratifying company habits, transparency, and teamwork. Not to mention the right culture attracts new, talented employees who will vie for the chance to be a part of a positive, collaborative team. Millennials will choose to invest themselves in your business' long term, thriving in the synonymous relationship between their ambitions and your company’s achievements.

What are you waiting for? Mature employee recognition programs are 12 times more likely to have quantifiable, superior business results!!⁶

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Foster a collaborative and engaging workplace culture of your own - book your Qarrot demo today!

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Sources

• ¹ https://www.tlnt.com/9-employee-retention-statistics-that-will-make-you-sit-up-and-pay-attention/
• ² Bureau of Labour Statistics
• ³ Tony Schwartz, Harvard Business Review
• ⁴ Modern Survey
• ⁵ Great Place to Work
• ⁶SHRM/Globoforce Employee Recognition Survey 2012

Are your staff coming in late, leaving early, or constantly chatting with colleagues? According to a recent survey by TotalJobs, one of the UK’s leading online job boards, these are sure signs of low employee engagement.‍

Employers are concerned. A majority attribute low engagement as a key driver of poor performance. And 1 in 3 report that they’re struggling to keep their employees adequately engaged.

The good news is that signs of decreasing employee engagement aren’t hard to spot. 59% of surveyed employers say that lower productivity is the first major sign of problems followed by other behaviors such as arriving late for work, leaving early, frequently chatting with colleagues and extensive Internet browsing. These tell-tale signs have tipped off employers that they need to take action. And many are beginning to combat low employee engagement in a number of different ways.

How employers are taking action

51% say that clear communication - whether via company email, newsletters, or team meetings is an effective way of reinvigorating engagement.

Nearly 46% report that setting out clear objectives for both individuals and teams is also a highly effective approach.

Other strategies include creating a stimulating work environment (39%), fostering a strong team dynamic (28%), building a strong and visible management team (25%), and recognizing proactive and engaged employees (24%).

As part of their efforts to combat employee disengagement, employers are increasingly turning to a roster of tools for help. Chief amongst these are employee rewards and recognition software solutions.

How can rewards and recognition software help?

As the name suggests, this type of software lets employers easily recognize and reward employees - whether for their on-the-job achievements, demonstrating the company’s values, or for their years of service. But good recognition software should go well beyond just helping employers dole out rewards and praise. Consistent with the results from TotalJobs’ survey, a good solution should also improve an employer’s ability to:

• Disseminate objectives and priorities to front-line staff
• Focus individuals and teams on business goals and values
• Encourage and promote teamwork
• Make earning rewards fun and engaging

In industries such as retail, food service, and manufacturing, these additional elements can make the difference between success and failure in the battle against low engagement since management aren’t always right on the front-line with employees.

In particular, employee recognition software should facilitate the communication of the very goals, targets, and behaviors employers want to reward and provide the ability for individual employees and teams to cheer one another on as they work towards accomplishing them.

The keys to this are the immediacy and transparency the software provides, both in notifying employer goals and then letting employees post their own updates and comments as well as displaying individual or team progress towards the objectives.

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Curious about employee recognition software and solutions? Speak to one of our experts today!

Workers feel valued when they believe that their manager, peers, or higher-ups in the organization are aware of and understand their individual contributions on the job. The best way to help employees feel valued is to recognize them when they’ve done a good job. As many studies have shown, recognition doesn’t have to be big and expensive—often, a simple “thank you” will do.

How engaged are your employees?

‍If you’re unsure or don’t know how to approach this question, continue reading for our 6-question self-assessment survey to quickly gauge employee engagement.

Before diving in, we’d like to point out that this 6-step process is meant to quickly ‘triage’ your overall level of employee engagement on your own. More in-depth assessments can be done using one of the many great employee survey tools now available on the market. Unlike those tools, this approach is meant to jumpstart your thinking and give you a rough-and-ready sense as to whether your employees are generally in a good place or not.

When you answer these questions, simply give each a score of 1 (low / rarely), 2 (medium / sometimes), or 3 (high / often). Then add up your scores to arrive at your overall score.

With that said, let's get started.

Do your employees feel a sense of purpose?

Whether it’s working on a world-changing new technology or running the french-fry station at a quick service restaurant, your staff do better work when they feel a sense of purpose related to their job. It may be a feeling that they’re contributing to a greater good or simply understanding how they contribute to a great customer experience.

When thinking about this question, ask yourself: Do you or the managers within your organization communicate a sense of purpose to employees? If not, chances are you’re not scoring too highly here.

Do your employees feel valued?

How often do you or your managers recognize employees for their accomplishments? Do you promote a culture of recognition where employees also feel empowered to say “good job” to their peers?

Do your employees have clearly defined roles? Are performance expectations clear?

It’s common sense that employees need clear roles and responsibilities in order to do their job well. But our research shows that while most workers understand their overall job description, many are still hazy on the boundaries of their roles and often lack a good understanding of their manager’s expectations.

Many tools exist for communicating employee responsibilities and manager performance expectations. But in considering this question, ask yourself: Do you or your managers regularly talk to employees about their work? Are you giving them feedback? Are you clearly communicating expectations for how you’d like them to perform their responsibilities?

Do your employees feel accountable?

It can be easy to assume that anyone you employ feels accountable for fulfilling their job responsibilities, but here too our research shows that reality is different.

Feeling accountable on the job is driven by many different things. Sometimes it’s just an age or maturity question. Sometimes, it’s the seniority of the position (more senior positions carry a higher level of ‘accountability’ by their nature). But just as often, it’s a question of whether a manager has imbued a sense of accountability in her team. This comes from leading by example, but also in expressing an expectation of accountability to employees.

How well do you or your managers communicate an expectation of personal accountability to your employees?

Does your work environment promote open communication?

While it might be tempting to grade yourself highly here because you and your managers are great at keeping staff ‘in the know’, think again. A workplace that promotes open communication is one that encourages employees to express their ideas, concerns, and to give feedback. Not only does this help employees feel more valued, but it lays the groundwork for staff to grow professionally and progress within your organization.

How well do you or your managers promote open communication with your workplace?

Are your employees properly enabled to perform their responsibilities?

Resource-strapped businesses like startups often lack all the tools they need to be successful. This can be motivating for resourceful staff for a time. But in most organizations, if employees lack the tools or manager support to do their jobs properly, they quickly become frustrated. That frustration can turn to active-disengagement if they believe their situation isn’t going to improve anytime soon.

Whether you’re a part-timer at a cafe or are an executive at a large, global organization, feeling enabled to perform well in your job is critical to your motivation.

How well do you or your managers enable your employees to perform their jobs?

Final question: Have you been honest with yourself? Great. Add up your scores. What’s the result?

6 to 10    

Danger zone, immediate action is necessary.

12 to 14  

You’re okay, but some improvements are probably in order.

15 to 18  

Congrats, you most likely have highly engaged staff!

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Uncover more tips to help improve your team engagement! Visit us at Qarrot!

In an era when nearly 70% of U.S. employees report being “not engaged” or “actively disengaged at work¹, many companies are scrambling to determine their level of employee engagement and, if it's low, whether that's having a negative impact on their business.

Employee engagement - or how motivated staff is to perform their jobs - can impact businesses in different ways. Depending on the type of business and the employee role, the impact of low engagement levels can affect different business metrics.

Though poor engagement universally affects employee productivity and turnover rates, it can extend to a broader range of impacts, including everything from sick days taken to customer loyalty. For customer-facing staff, employee engagement levels affect their interactions with customers, impacting everything from customer satisfaction, customer loyalty, and even the company’s brand and reputation. For manufacturing businesses, low engagement correlates to higher rates of safety-related incidents. Similarly, across most businesses, absenteeism, sick days, and health claims (related to company health plans) are all impacted by employee engagement levels. In all of its various forms, poor engagement also correlates strongly to decreased sales and profits.

Regardless of the impacts you observe and measure, it’s important to understand these are the outcomes of poor engagement. And so any effort to improve engagement should start with analyzing why your employees are unengaged in the first place. A good understanding of the key drivers will arm you with the information needed to develop an action plan. Then, when it comes to business-casing the investment required to support your plan, you’ll know which metrics you can expect to impact. And you’ll be able to show the ROI from improving the metrics you believe you can impact through your action plan.

From analysis to action - national retail chain case study

Vision Source, a retail optical chain with 4,000 locations, realized that its franchise employees did not view themselves as “salespeople”. In particular, staff did not make a point of attempting to cross-sell or upsell patients as often as they could. The chain determined that this was largely due to a lack of system-wide sales training as well as motivational tools to focus front-line staff on making the effort to promote certain products and services.

Given this assessment, Vision Source put in place a system-wide sales motivation program that included online training, reference materials, and sales incentives.The impact was immediate. Employees suddenly had access to training that helped them improve their on-the-job performance and attractive incentives for selling certain higher margin products and services. Employees felt more empowered and motivated. And the result was a significant increase in the year-over-year growth rate.

Impact statistics from the field

As presented earlier, the impact of poor employee engagement varies by business, industry, and employee role. Here are statistics² from companies that have implemented employee recognition programs in which the focus is on recognizing and rewarding behaviours that reflect the company’s core values:

Engagement

90% of companies say it has positively impacted engagement, resulting in a more meaningful and happier work environment.

Retention

68% say it has positively impacted employee retention. The estimated cost of replacing an employee ranges from one to three times his or her annual salary and the average company loses about $1 million with every 10 professional employees who leave.

Safety

37% say it has positively impacted employee safety, resulting in reduced absences from work-related injuries, lower injury-rates, and lower costs associated with worker medical expenses, worker replacements, training, and insurance premiums. On average, $1 invested in injury prevention returns between $2 and $6 in direct savings.

Wellness

29% report a positive impact on health and wellness goals, reducing the number of sick days taken, paid sick leave and lost productivity.  Engaged employees are absent two-thirds less than the employees who are disengaged and unhappy.

Brand and Reputation

Organizations with 50% or more of their employees rating themselves as “engaged” retain over 80% of their customers.³ More highly engaged employees provide a better customer experience, which, in turn, promotes greater customer loyalty. In fact, companies in the top quartile of employee engagement experience a 10% higher customer rating than those in the lower quartiles. Improving the customer experience may pay for itself as U.S. brands are reported to lose approximately $41 billion each year from poor customer service.⁴

Cost Control

A high employee turnover rate correlates with inventory shrinkage. Inventory shrinkage is estimated to cost retailers a staggering $30 billion annually, and half of that loss, or $15 billion, is attributable to employee theft.

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Learn how your team could benefit from a recognition and rewards program! Book your Qarrot demo today!

The amazing growth of gift card rewards

Recalling my days working for a leading customer loyalty program, I remember the remarkable growth of program members exchanging their points for gift cards. This growth was remarkable for different reasons. First, it was a travel program where the majority of members accumulated their points for airline tickets. This travel orientation meant that members were accustomed to saving-up their points for long periods of time. Moreover, before the program introduced gift cards to its catalog, it added merchandise and experiences. This meant that members had a wide range of choices—everything from plasma TVs to show tickets to VIP events. Despite all these options, gift cards quickly grew to become the most popular non-travel reward.

Looking back, I now realize that the popularity of gift cards as a reward option had a lot to do with their flexibility and their faster attainability compared to the more aspirational, less attainable travel rewards.

But, my previous company isn’t alone. The entire incentives industry has seen the same trend in the past decade. In fact, the Incentives Research Foundation states that in 2012 gift cards had become the most popular gift among consumers shopping for friends and relatives and the tool of choice for businesses hoping to motivate employees, customers, and partners.

Gift cards: the preferred employee incentive reward

When it comes to motivating employees, gift cards are now undeniably the preferred non-cash reward option and used by 75% of businesses. Use of gift cards in employee rewards and recognition programs has even exceeded travel, merchandise, and cash rewards according to the October 2011 October 2011 report “State of Gift Card Use in the U.S.” by the Incentive Research Foundation. According to the IRF’s research, consumers have embraced gift cards because they make gift-giving “easy” and “reduce shopping time”. This convenience factor has no doubt also influenced people’s warm reception of gift cards as incentives in the workplace.

Incentive program managers and planners also prefer using gift cards as incentives because they are easier to administer, are more flexible and personal, and are popular amongst company staff. Above all, incentive planners view gift cards as the “most effective” reward option that offers the best overall return on investment, even compared to cash.

Similar to the IRF’s findings, we believe the effectiveness of gift cards over other non-cash and cash rewards is largely due to the unique combination of flexibility and “trophy value”. For example, if you offer your staff a catalog of merchandise, you’ll achieve high trophy value but low flexibility as staff may aspire to have some of the items you offer, but won’t necessarily find something appealing at any given time. In contrast, cash rewards offer high flexibility but low trophy value. The following quote from Mike Ryan, President Emeritus of The Performance Improvement Council, in the IRF report highlights this perfectly:

“A responsible person who receives cash as a reward may not feel comfortable about spending it on themselves, so it is not exciting for them. A $25 gift card is better than $25 cash because it gives them license to spend on themselves and this makes it appealing.”

Gift cards seem to strike that perfect middle ground - by offering a selection of well-known brands, as well as “open” prepaid cards from Visa, MasterCard, or American Express, your employees will find both trophy value and flexibility.

Compared to merchandise and travel, gift cards also dramatically reduce the administrative costs and burden associated with employee incentive programs. Ever shipped a TV across the continental US? It’s not cheap. Not to mention that merchandise programs require frequent catalog refreshes to maintain employee interest and tend to have higher customer servicing requirements (with staff calling to find out when their rewards are going to be delivered).

Digital revolution: the rise of e-gift cards

With the rise of mobile and digital payments, it’s not surprising that gift cards too are increasingly offered electronically. “E-gift cards” are similar to their plastic equivalents in that they can often be used in-store (printed or with a barcode displayed on your phone) or used to pay for purchases online (by either entering a PIN or redemption code). Moreover, Millennials prefer e-gift cards because, unlike physical cards, they can’t be “lost” and don’t need to be remembered before going shopping.

Plus with the growth of online retailers like Amazon as well as the online offerings of bricks-and-mortar retailers like Best Buy and Walmart, the number of possible ‘reward options’ is nearly infinite. Why manage a merchandise catalog with hundreds of items, when these online retailers have tens of thousands? And to offer their catalogs as rewards to your employees all you have to do is provide their e-gift cards as rewards in your employee incentive program.

Beyond the flexibility and choice provided by e-gift cards, I believe they will quickly overtake physical gift cards in the coming years as the most popular employee incentive reward due to their simplicity. Incentive program managers and planners will love them too - from the low cost of fulfillment to the instant gratification they provide (e-gift cards can be emailed or received instantly upon redemption), they help simplify and, at the same time, expand the utility of incentives.

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Qarrot makes motivation easy with our feature-rich platform and catalog of e-gift cards! Book your demo today!

With employee engagement on the minds of many employers and human capital professionals these days, we’ve taken it upon ourselves to scour hundreds of statistics from various studies and articles to come up with the 14 we find the most surprising.

These statistics concern not only the current state of employee engagement but the cost of low engagement to companies as well as the benefits of high employee engagement.

Current State of Employee Engagement

• 37% of U.S. accommodation and food services employees say they had or will quit their position in the current 12 month period.¹ (Retail, customer service, and hospitality organizations are designed around high-turnover: jobs are relatively easy to learn and new employees can be integrated fairly quickly. But, this strategy doesn’t eliminate the cost of “cycling through” staff.)
• 49,5% of U.S. employees are “not engaged” at work. (Worldwide, the percentage of engaged employees drops dramatically to 13%)
• 35% of the U.S. workforce said they’d look for a new job if they don’t receive a pay raise in the next year. ² (In U.S. tech-powered companies, 65% of employees are confident they can find another job if their salary expectations aren’t met.)
• 52% of the workforce is open to a new job opportunity.

The Cost of Low Employee Engagement to Companies

• 150% of a mid-level employee’s annual salary can go into finding and hiring their replacement. (400% for high-level or highly specialized employees. Those expenses cover advertising the vacant position, interviewing applicants, screening candidates, hiring, training...) ³
• 2 years is the average time it takes for a new employee to reach the productivity level of the person they replaced. (The onboarding process also costs the company; training, distraction for managers whose time for coaching and developing existing staff is removed.)

Employee turnover resulting from low engagement has other hidden costs: the process of training new hires can be a distraction for the current staff and, if turnover happens frequently, can ultimately demotivate those employees tasked with back-filling while the new hires come up to speed. This can have even more insidious effects with customers. Turnover amongst customer-facing staff can give the appearance of instability within the organization and ultimately can hurt customers’ confidence.

The Benefits of High Employee Engagement

• 80% of most organizations’ market value comes from intangible assets such as brand, quality of the workforce; its talent, passion, and commitment (A few decades ago, this value was almost exclusively based on tangible assets like machinery, products, and facilities.)⁴
• $2,400 is the average increase in profit per employee per year a company can reach with employee engagement programs.⁵
• 97% of the companies with good employee engagement levels (half or more highly engaged employees) report that engagement leads to greater productivity. 93% say that it plays a major role in the company’s capacity to meet its revenue goals. Overall, 82% of these companies report that high employee retention improves customer loyalty, which provides with a noticeable competitive advantage.
• 33% report a significant impact of engagement on profit margins, and 81% on revenue growth.⁶

Interestingly, highly engaged employees have both a positive impact on customer experience and, as a result, customer loyalty. A long-term study at Sears reveals customers who had a pleasant, pro-active or superior service experience are 10% to 30% more loyal than customers who have did not and would strongly consider purchasing again from a brand if they had a good customer experience.⁷

Regardless of the statistic, it’s clear that employers and human capital professionals are preoccupied with employee engagement for very good reason.

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Boost your employees' engagement and motivate improved performance with Qarrot - schedule your demo here!

If you own or operate a retail or food service business, you may be amongst the large percentage of companies unintentionally stifling the potential of your managers and, by extension, the performance of your front-line staff.

The Scope of the Issue

Over 50% of the global economy is driven by businesses with “distributed networks” of sites and employees. Retailers, including food service chains and retail banks, make up a major part of this group. However, many of these businesses are unintentionally limiting their success.
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According to McKinsey & Company, front-line managers—such as store, district, or area managers—are often burdened with heavy administrative work and lack the authority to make critical decisions that improve the customer experience.

Too Much Admin, Not Enough Impact

Rather than spending time where they can drive the most value—on the floor coaching staff and engaging with customers—front-line managers spend up to 60% of their time on administrative tasks.

This imbalance can have serious consequences, especially for service-based businesses. Research shows that customer-facing employee behavior is strongly linked to customers’ perceptions of service quality. If managers can’t influence and coach these employees, the customer experience suffers.

Why Great Managers Matter

It’s no surprise then that Gallup found that hiring great managers can result in a 27% increase in revenue per employee. Unfortunately, many companies still hire based on tenure rather than talent or leadership potential.

Natural leadership ability—the capacity to inspire, build strong relationships, drive outcomes, and make tough decisions—is essential not only for better performance, but also for higher employee engagement.

Related article: 3 Strategies for Helping Managers Improve Employee Engagement

The Engagement Connection

According to Gallup, naturally talented managers account for 70% of the variance in team engagement. And engagement matters—a lot. Low employee engagement, according to Gallup’s 2012 data, costs U.S. companies between $450 billion and $550 billion annually.

Rethinking the Manager’s Role

Before reworking hiring practices, companies need to redefine what the role of a front-line manager should be. These individuals shouldn’t be treated as administrative cogs, but rather as drivers of store performance and employee success.

A Case Study: Empowered Managers Deliver Results

McKinsey reports a study in which store managers felt powerless over key performance metrics—such as category sales—and were overwhelmed by paperwork.

To change this, the company experimented with:

• Improved store layouts
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• Streamlined reporting
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• More floor time for managers
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As a result:

• Managers spent 60–70% of their time on the floor
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• They delivered high-quality coaching to staff
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• They used performance scorecards to focus teams on key actions like greeting customers and suggestive selling

The outcome? A 51% increase in productivity in one region and 65% in another when rolled out across the store network.

The Path Forward: Empower and Engage

To replicate this kind of success, businesses must:

• Hire managers with real leadership ability
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• Redesign systems to free managers from excessive admin
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• Empower them to coach, make decisions, and engage directly with staff and customers

Final Thought: Let Your Managers Lead

Empowered managers drive better performance. When they have the time, tools, and autonomy to coach their teams and connect with customers, everyone wins—from the front-line employee to the bottom line.

Ready to Motivate Your Front-Line?

Engage your managers and empower them to motivate your front-line for better results with Qarrot. Book a demo today!

In many businesses, motivating teamwork - or more specifically, motivating your staff to win as a team - can trump the pursuit of individual achievement and bring a higher level of success. In fact, a joint study by the International Society for Performance Improvement and The Incentive Research Foundation found that “Incentivized teams increased their performance by 45%; incentivized individuals increased their performance an average of 27%”.

This learning equally applies to retail stores, restaurants, and cafes. In many of these businesses, an emphasis on shared goals and rewards can lead to better results.

Here are a few areas where we think motivating teamwork leads to better outcomes compared to individual performance:

Lots of part-time staff

Motivating part-time staff to go above and beyond is a challenge in any situation. But if a business can successfully instill a sense of teamwork amongst its employees, even the part-timers are likely to feel motivated and do their part to help achieve the goal.

With teamwork, each member feels that they’re a part of something bigger than themselves. If one member doesn’t do their part, then they’re not just letting themselves down, but the entire team.

And when the goal is achieved the whole team shares in the success, not just one person. This avoids the possibility of demotivating employees who didn’t win.

Employees frequently rotate roles

In many retail businesses, employees tend to specialize in one area. However, in certain sectors, such as Quick Service Restaurants, it’s not uncommon for an employee to work the cash one day and to be in the kitchen the next. This rotation of tasks provides some healthy variety to staff, but it also requires that they work together to communicate, transfer knowledge, and share tips and tricks.

As a result, this type of role rotation is another prime candidate for teamwork. What better way to nurture collaboration and knowledge transfer than through shared team objectives and rewards? Staff will feel more motivated to ensure their counterparts are equipped to perform the tasks through their rotations and to help one another.

Serving the customer requires teamwork

Businesses where multiple employees are involved in serving the customer - cafes and restaurants, for example – are ideally suited to team goals and rewards. Because the employee who takes the order is usually not the same person preparing the coffee or the food, shared team goals and rewards can be essential to success.

Teamwork is key to innovation

The Society for Human Resource Management cites teamwork and collaboration as key ingredients to successful innovation. And team-based incentives are a great way of emphasizing and fostering collaboration amongst employees to produce innovation.

The SHRM goes on to add that team incentives also benefit organizations by focusing employees on shared goals, fostering teamwork that leads to better group problem-solving, improving peer-to-peer support, and cross-organizational performance.

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Visit us at Qarrot to learn more about motivating teamwork and rewarding your staff for winning as a team!