Shifting demographics and employee lifestyles challenge employers to keep tabs on the varying preferences and groups in today's expanding workforce.
Analysts in the rewards and recognition marketplace are forecasting a very strong year in 2007, and that means businesses will be even more focused on providing a culture of recognition as part of the core of their business strategy.
"Research is leading us to a new concept that the employee is actually a profit center as opposed to a cost center," says Karen Renk, executive director of the Naperville, Ill.-based Incentive Marketing Association. "And so that is the foundation for a business case for companies investing in a recognition program."
But as the face of the employee continues to change demographically, executives must decide how best to reward and recognize groups of workers who have very different wants and needs. While anecdotal evidence suggests each demographic group responds to different types of incentives and motivation efforts, experts agree that finding the right reward for each demographic is paramount to increasing a company's productivity.
"Regardless of one's age, sex or nationality -- or even if they work in the office next door for from their home in the next time zone -- everyone wants to feel that how they're spending the bulk of their waking hours makes a difference," says organizational behavior expert and author Bob Nelson. "To let them know doesn't require a lot of time or effort [even when targeting rewards to the changing demographic tastes and needs], but does have an amazing impact on their willingness to do more."
Through extensive interviews and research, Human Resource Executive® has come up with four key demographic changes that recognition and HR experts and practitioners need to be aware of to best manage today's and tomorrow's employees.
"Recent census data shows that 14 percent of the total U.S. population has a home language other than English," says Maria Bavender, vice president of sales for Minneapolis-based Hallmark Insights. "This represents a 34 percent increase from 1980. In the United States alone, our Spanish-speaking population includes at least 35.3 million people. Our increasingly diverse population requires us to differentiate messages and marketing in a way that is for diverse audiences."
Bavender says her company recently launched a bilingual awards program that allows employers to recognize Spanish-speaking employees in their native language. "You can put the text in Spanish and the instructions in Spanish, as well as the Web site," she says. "It's an easy toggle, so if you're sending the award out in Spanish, [the recipients] can see their redemption instructions in either Spanish or English."
For international companies with employees scattered across the globe, Renk identifies a "tremendous need" for a global platform for rewards.
"It's not just the language barrier that's the significant challenge," she says. "It's the currency, the standard of living and cultural nuances that you must be aware of. One type of award that may be acceptable in one country may not be appropriate in another. For example, you wouldn't give anything alcoholic [as a reward] to an Islamic population."
Making sure that the intent of the message is consistent from one language to another should also be a high priority, according to Renk. More and more incentive companies are employing multilingual people to ensure their translations are appropriate, not only from a grammatical standpoint, but from a cultural standpoint as well.
"What might be an appropriate dollar amount in Central America may not be [appropriate] for western Europe," she says. "It's very important for a company that wants to deliver an incentive program as motivating to all its employees [that] cultural considerations [are taken into account]."
In this age of advertising over-saturation in all branches of media, perhaps it comes as no surprise that younger workers are more brand-conscious than other demographics when it comes to the types of rewards that motivate them.
"The younger worker has a consumer mentality" that is much more pronounced than that of older workers, says Renk. "They are attracted to major brands, the 'latest and greatest' products at the consumer level. They are technologically savvy, which means they want to redeem their awards quickly. We now have companies providing incentives on BlackBerry platforms through e-certificates, so an employee can almost instantaneously redeem [his or her] award" from an online site.
Gift cards are also becoming one of the most popular forms of rewards and incentives, a direct result of the growing ranks of the young. In a recent survey by Incentive magazine, 69 percent of companies said gift cards are more effective than cash in motivating and rewarding employees.
Managers like them because of their ease of use and instant-recognition quality.
Another emerging trend tied to younger workers is stepped-up timing for employees, Renk says. Companies are presenting service awards much sooner than in the past, she says, because they want new workers to bond with the company early to create more loyalty later on.
"When I started [working]," she says, "you got a certificate after five years. Now, the more frequent recognition engages the young employee more . . . because the younger worker is very mobile and expects to have many careers in his or her lifetime, so companies are taking steps" to grab them on their way in, not on their way out.
The younger generation also has a different preference in terms of how they are acknowledged, Bavender says. "Generation Y, for example, is more comfortable working in teams and prefers to be mentored [more than] other generations," while older workers don't seem to need as much back-slapping or hand-holding.
Hallmark recently launched a $5 award program that allows managers to increase frequency of on-the-spot recognition. The awards can be accumulated over time and then redeemed for higher-priced items.
So far, the program has been well received, "especially considering that the younger audience needs to be recognized [more] frequently. We find that the $5 level really helps managers relate to their younger audiences while staying within their budget," Bavender says.
"Keep them engaged" is the message analysts are preaching to companies hoping to retain their older, more experienced workers -- all of whom present a collective threat of retirement in the next several years.
While some older workers may like $5 awards, Bavender says, "I think those people are more looking for flexibility in their work schedules, so if they decide they don't want 40 hours anymore, or they want hours more amenable to their lifestyle," they can do that.
Nevertheless, they still want to be doing work that is meaningful and that utilizes their skills. "Employers want to keep their older workers engaged and feeling important and appreciated so they don't go [elsewhere] looking for appreciation."
Experience and lifestyle awards are going to continue to be strong motivators for older employees, especially when those employees are at a discretionary spending level. Older workers, for instance, are more likely drawn to unique reward programs such as "getting the opportunity to drive around the Indy 500 track" than younger workers would be.
Bavender says her company now offers gift cards that can be redeemed by employees for a number of unique experiences including hot air balloon rides, shark-diving adventures and stock-car racing. Travel rewards are gift cards that can be redeemed at American Airlines, car rental agencies such Hertz, and such lodging Web sites as www.bedandbreakfast.com.
For those older employees looking to pad their nests instead of travel, gift cards can be given out for retailers such as Macy's and Pier 1 Imports as well as Web sites such as cooking.com.
With a growing focus on healthy living and work/life balance, says Bavender, cards are also available for sporting-good retailers such as bikeshop.com, Bass Pro Shops and The Sports Authority.
For Gil Gordon, president of Gil Gordon Associates, a Monmouth Junction, N.J.-based consulting firm specializing in telecommuting, the idea of treating teleworkers differently than other workers just doesn't work. But, he says, there are certain incentives that off-site workers may appreciate more than other employees, particularly when it comes to using vacation time.
"The notion behind vacation is to give [employees] a rest from the daily grind [at the office]. While I don't think telecommuters should get less vacation, the nature of their work is less grinding for them, so they may be more interested in a cafeteria approach to vacation, such as taking unused vacation time and converting it to credits toward home office furniture or a cash benefit, instead of using vacation days."
According to Gordon, telecommuters, due to their stay-at-home location, are often more involved in community activities and could benefit more from an abbreviated type of sabbatical.
"Teleworkers get more involved in things like coaching Little League and other community organizations," Gordon says. "I wonder if it's possible to think about mini-sabbaticals of three or four days for teleworkers to allow them to blend the fact they aren't tied down to a desk with more [social] involvement. A three-day sabbatical would allow them to get even more involved in their communities."
Bavender agrees that in order to keep teleworkers feeling rewarded and recognized, it is necessary to think outside the office box.
"You do have some special challenges with telecommuters," says Bavender. "People who work from home start to feel left out." To respond to telecommuters' growing numbers and needs, she says, virtual awards -- those which can be sent via e-mail -- are on the rise, allowing "managers to keep those [out-of-office] workers feeling connected."
Among the new offerings targeted toward telecommuters are printable certificates that managers can fill out and e-mail to employees off-site to express their gratitude for a job well done or a project completed ahead of schedule.
"Sometimes you [rarely, if ever] see your employees who telecommute, but you can still get awards out to them quickly and you can really elaborate on what they did and why that was important and how you felt about that," Bavender says. "They're made so that you can hang them up. You can print them up and pin them up and be proud of them."
Utilizing an online recognition program is critical in keeping off-site employees engaged, Renk says.
Telecommuting employees are already integrated into their physical offices via their computers or their BlackBerries, but what is important is that they feel like they are a part of the office culture, which means they have to be part of the recognition platform.
Employees who work from home present a unique challenge to managers in that one of the important aspects of the reward program is public recognition, so a company needs to go to greater lengths to interact and recognize the employee in a public arena. Some companies with a high proportion of telecommuting employees are even starting to organize retreats where these employees can meet their co-workers for the first time.
"I would certainly assume that companies are working hard to develop some face-to-face contact" with the growing telecommuting crowd, she says.
Renk cites the Fortune 100's "Best Companies to Work For" list as proof of the overall importance of rewards programs that are directed to specific audiences. "Those companies [on the list] outperform their competitors, and their people strategies are one of the most important reasons why," she says.
"Employees want what's appropriate for them personally," Renk says. "It really doesn't matter what the hottest product is; it matters what motivates your workforce [in whatever demographic breakdown it is]. And the company needs to ask its employees [through surveys, intranet response boxes, etc.]: 'What do you want to see in the reward mix?' "