Recent corporate tax cuts are beginning to take effect for organizations of all sizes, leaving companies to face a big question: what to do with the extra money? Employee engagement, through incentives and rewards are a great area to invest in, given the impact they can have on company morale, employee happiness and overall employee retention rates.
According to a new survey from Mercer, one of the largest global human resources consulting firms, about a third of American employers will take some of their new tax savings and invest it toward employee rewards and incentives. Here are three suggestions to do so effectively.
1. Invest in Training and Development.
Of the 241 American companies that participated in the Mercer survey, 11.2% are using tax savings from recent corporate tax cuts to reinvest in their people. Your employees are the most important asset your company has, so using organizational savings to bolster employee benefits makes sound financial sense.
Employee incentives and rewards aren’t just bonuses, and parties (while those can work well to boost morale), material investment in employees’ futures is meaningful when building relationships and engagement between employees and your company. If you invest in your employees, they will invest in your organization.
2. Take a Look at Retirement Programs.
Just over 10% of employers enjoying tax savings are using their extra cash to change retirement plan contributions. While offering 401(K) plans is fairly common among employees adding a percentage match or raising that match can really make a difference in employees’ retirement savings plan.
This is another meaningful way to invest in employee incentives. While retirement plans are often seen as an employee benefit, adding or raising a match would be viewed as an incentive or reward for many. You’re putting more cash in employees’ pockets at the time in their lives that they need it most. Investing in employees’ future shows long term commitment.
3. Bolster Employee Incentive Programs.
Using tax savings to add to existing employee incentive and reward program is a great way to make a quick impact on employees. While bonuses are nice, investing in smaller rewards that can allow tax savings to last longer and have more impact for more employees is likely to have a greater overall influence on your organization.
Using small incentives, like spot rewards, allow more employees to be affected by the program. This ensures that employees feel a longer, and more even impact. There’s no bonus scale, just a little extra for all employees. Incentives should be enough to treat their family to dinner, or curb a grocery bill or other household bill for the week. It should be enough that the incentive is meaningful to the employee, but not so much that the reward can’t be spread around.
Employee incentives are a great outcome for corporate tax savings and are a great tool for maintaining employee retention rates well into this year. When employers make investments in employees with any kind of corporate surplus, employees are much more likely to feel appreciated and to imagine their future with their organization.