Thanking employees after a year like no other

How can gifting incentives boost employee well-being this Christmas? Gail Cohen, director general of the Gift Card & Voucher Association, explores

With the ongoing challenges of the Covid-19 pandemic, businesses and employees have been faced with an extremely difficult working year and, while a vaccine is in sight, many businesses will be experiencing tight cash flows.

Business leaders should, more than ever, be encouraged to thank their staff for all of their hard work and commitment during this most extraordinary working year. With office Christmas celebrations looking likely to be shelved, financial incentives, such as gift cards, are a great way to show appreciation to those members of your team who have endured a challenging year.

Over the past year, the gift card industry has been a local and national hero, allowing consumers to show their support for local businesses through purchasing gifting credit, as well as being bought and sent digitally to loved ones in the months where meeting in person was limited due to Covid-19 restrictions.

During these months, 14 per cent of shoppers bought a gift card for somebody else, outselling physical gifts at just 12 per cent, and more than one in five consumers (21 per cent) purchased gift cards to support their favourite businesses during this difficult period.

With giving gifts in person still limited, due to many staff still working from home and face-to-face interactions placed under ongoing restrictions, gift cards are a great way to not only reward staff but allow them to spend their value with their favourite brands.

Below are three reasons why gift card rewards are a great choice for businesses in thanking workers this year, with benefits to both the business and the employee alike.

Gift cards can be bought and redeemed instantly online
According to recent research, over 50 per cent of consumers will spend their gift card within one month of receiving them and 98.6 per cent will spend them within the first 12 months. Not only does this demonstrate the effectiveness of sending a gift card as it is likely that they will be used promptly by the recipient, but, it is also easy to redeem the card’s value by accessing the chosen retailer online.

The ability to redeem and purchase gifts online has been a trend that has accelerated due to the coronavirus pandemic. Not only are consumers opting to send gifts to loved ones online, but at least 86 per cent of consumers are expecting to receive gifts digitally, and from afar (such as over Zoom) this Christmas.

For businesses currently employing a remote workforce, this is an attractive option to not only reward staff at a distance but allow their employees to redeem the value in a way that is convenient to them. Businesses’ HR teams or other key departments – depending on the exact business in question – purchase cards online and then they can simply be posted to their employees’ home addresses, or sent digitally to their email or smartphone via an app. With Christmas fast approaching, this is a quick, and easy way to say a big thank you ahead of the festive season.

Gift cards are targeted so will not be spent on household essentials
One of the major drawbacks of providing staff with cash bonuses, is that the money is often spent on miscellaneous costs such as rent, mortgage payments or domestic bills, rather than used to treat themselves. While cash bonuses may be an initially preferred option, workers are generally less likely to remember what they spent a cash reward on as these are often added onto a salary and, in some cases, can be scarcely noticeable.

Instead, employers can gift a multi-store gift card or even select a gift card for their employees that can be redeemed at a particular local business they are wanting to support. Similarly, the business may want to offer an experience (including online experiences, which are important to consider in the current climate) voucher to its employees to treat themselves to a different kind of reward. This demonstrates that meaningful thought and consideration has gone into the gift, rather than a cash figure that may be missed.

A tax-free employee benefit
Finally, gift cards do not just benefit the employee that is receiving them, but there are other benefits for the business too.

There is existing legislation from HMRC that means that businesses can reward staff without either employee or employer feeling it in the pocket. Indeed, for rewards worth up to £50, the HMRC Trivial Benefits exemption allows employers to thank their staff without the employee incurring additional costs in tax or payroll - all the business needs to do is order the gift card either in-store or online and then send on to its recipient.

At a time when staff are more in need of reassurance than ever, it is crucial for businesses to take every chance they can to show how much they appreciate the hard work of their team. A little investment in this area can go an extremely long way in terms of employee morale, engagement and long-term productivity. Gift cards have been a proven tool for increasing employee engagement, allowing workers to spend the value on an item they would truly treasure.

The Gift Card & Voucher Association was established as a trade body to represent the key players in what is today a c£6.9 billion gift card and stored value solutions market. With 80 members representing key retailers, issuers and suppliers the GCVA provides an information and reference point for the Gift Card & Voucher industry and is at the forefront of the issues affecting the industry.