Employee Bonus Alternatives: Are Benefits a Viable Alternative to Cash?

Summary:

Do all good employers reward employees with bonuses?

What cash bonus alternatives are there?

How do benefits help employees?

What are the advantages to your business of providing employee benefits?

 


Employee Bonus Alternatives: Are Benefits a Viable Alternative to Cash?

Many organisations across the UK believe that the best way to engage and reward their workforce is with employee bonuses. Are you one of them?

It’s a conversation we have with many businesses that are looking to improve employee engagement, support wellbeing and boost productivity.

However, a monetary employee bonus policy alone won’t necessarily foster a culture of engagement and satisfaction that improves employee wellbeing and staff retention.

Do all good employers reward employees with bonuses?

Many great employers offer bonuses as a way of rewarding their employees — but then so do many not-so-great employers.

Offering cash bonuses is one way of rewarding success and encouraging positive behaviours, but it’s not the only way, and research suggests it’s not always the best option.

In fact, a survey conducted by Aviva found that only one quarter (25%) of employees consider bonuses to be an appealing perk, behind both increased annual leave (44%) and flexible working hours (39%).

Bonuses were found to be even less effective as a retention measure, with just 9% reporting that they were a major factor in considering whether to stay in their current job.

Performance-related pay, whether that’s in the form of individual bonuses or profit sharing schemes, also had mixed results when it came to employee satisfaction.

A report published in December 2021 by BDO found that performance pay increased the job satisfaction of male employees, but not female employees. Job satisfaction levels differed between sectors too, with the manufacturing and contracting sectors likely to display higher levels than primary and service sectors.

 

What cash bonus alternatives are there?

While cash rewards shouldn’t be discounted from employee bonus ideas, it’s clear that relying on monetary bonuses alone isn’t enough to enjoy high levels of job satisfaction, employee engagement and improved staff retention.

Fortunately, there are a number of alternatives to cash bonuses for your organisation to consider.

1. Employee Recognition Platforms

Rewarding hard work and success is essential for driving positive behaviours and creating a culture that has achievement at its centre.

An employee recognition platform allows an organisation to make recognition a part of the everyday, rewarding star performers and incredible results.

2. Employee Benefits Platforms

A tailored Employee Benefits Platform brings together a wide range of employee benefits and services into one place, including:

  • Retail discounts on everything from the weekly shop to the latest tech.
  • Gift cards and eVouchers to be used online or in-store at a wide range of leading retailers.
  • Cinema Benefits to be used for the big screen — including Cineworld, ODEON, VUE and Showcase — or for the small screen, with money off in the Sky Store.
  • Prepaid cashback cards — empower your employees to spend money online or in-store on the things that matter most to them, wherever Visa is accepted. These cards are the easiest way to reward high performance and deliver an exceptional employee benefit.

Our experienced account managers will support you in identifying the ideal selection of benefits based on your team’s needs and demographics.

3. Salary deduction schemes

One of the benefits of cash bonuses, especially in the current climate, is that they support your employees’ financial wellbeing.

Salary deduction schemes do the same, but in two ways:

  1. Supporting with commuting costs through a cycle-to-work scheme;
  2. Helping their salary go further by facilitating the purchase of both everyday essentials and luxury goods, by contributing funds directly from their payslips; and
  3. Offering an affordable way to buy products without having to take out expensive credit, which is only getting more expensive with interest rates on the rise.

Salary deduction schemes include annual leave purchase, money off tech and travel season tickets.

 

How do benefits help employees?

When implemented well, your organisation’s package of benefits can support every aspect of your employees’ wellbeing: mental, physical and financial.

Mental wellbeing

Poor mental health costs UK employers up to £45 billion each year, so it’s an issue your organisation needs to take seriously.

Knowing their employer cares about an employee’s mental health can make a big difference, while there are benefits that can directly influence positive emotional wellbeing, including Employee Assistance Programmes (EAPs) that provide access to accredited counsellors.

Physical wellbeing

Physical health is directly linked to productivity, as well as improved mental wellbeing, so offering benefits that encourage a healthy lifestyle can offer a range of advantages. This might include discounted gym memberships or cycle-to-work schemes.

Financial wellbeing

Financial benefits that support this pillar of wellbeing include salary sacrifice schemes, prepaid cashback cards and discounts on a range of products, helping employees’ salaries to go further and making the things that make them happy — or that are essential — more affordable.

 

What are the advantages to your business of providing employee benefits?

As the name suggests, employee benefits offer a wide range of advantages to your staff, but what about you as an employer?

First of all, supporting the wellbeing of your employees impacts every measure of job satisfaction, from engagement and performance, through to loyalty and retention.

Creating a supportive culture that rewards success, but also demonstrates that you care about every employee, will also help your organisation to acquire the best talent.

Employee bonuses are a positive step, but by implementing a holistic benefits and rewards platform you will:

Ready to find out more about how Sodexo Engage can help you achieve so much more than with employee bonuses alone?

We’ve been working with organisations for over 60 years to improve employee engagement and satisfaction, so what are you waiting for? Get in touch with the team today and discover how we can transform your rewards and recognition policy together.