Sales Incentive Blog

Cost of Employee Turnover

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One of the most noted reasons for retaining employees’ long term is turnover….specifically the cost involved in turnover.

There are different types of costs related to turnover and all must be considered to calculate or at the very least estimate the true cost of employee turnover:

Some examples are:

1. The cost of the person or persons who will be filling in until a replacement is found
2. Lost productivity costs due to the employee leaving
3. Lost productivity costs while the new employee is in training
4. Exit interviews, unemployment insurance, severance, and continuing benefits costs
5. Training costs - all training that the former employee received – classes, certifications etc.
6. Skill sets, contacts, and customers that will follow the former employee to their new company
7. Lost sales while the sales territory is vacant or understaffed
8. Recruitment costs – the HR department or a Recruiter’s time and all advertising
9. New hire costs – training a new employee
10. Administration costs – setting up the new employee - payroll, security cards, logins, passwords etc.

These are just some of the costs – there are certainly more.

When you sit down and add up all these costs versus the cost of keeping your current staff happy, motivated, and loyal - the logical decision should be let’s keep the current staff incentivized and develop a robust employee incentive program now!

Ideas for Employee Incentives

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In an earlier blog, Successful Incentive Programs, we discussed the steps involved when choosing an incentive vendor. Once a vendor is chosen, the real fun begins. 

Ideas for employee incentives are virtually endless.  Note that the ideas encompass both the activities and actions required to receive the award as well as the award choice.

Below you will find a list of some ideas for program activities and award choices that will hopefully get your creative juices flowing.

Program Activities:

Sales Incentives:

Award your sales staff on reaching/exceeding their quota or a percentage increase from the previous year.

Peer-to-Peer Incentives:

Launch a nomination program where co-workers can nominate each other for going above and beyond on the job.

Manager-to-Peer Incentives:

Similar to peer-to-peer only the mangers nominate outstanding actions and behaviors of their staff.

On-the-Spot Incentives:

Equip management with cards that they can hand out on-the-spot when they see exemplary performance – the cards can be gift cards or cards with a code that can be entered online for a prize.

Years-of-Service Incentives:

This is self-explanatory and every organization should at least recognize their employees in this manner.

Health & Wellness Incentives:

Entice employees to be healthier by offering awards for joining gyms, annual exams, smoking cessation, diabetes management classes etc.

Award Choices:

Before choosing your award mix you need to have a thorough understanding of your program audience and their demographics however, if implemented correctly, any combination of awards can work well.

Merchandise

Individual & Group Travel

Gift Cards

Debit Cards

Put on your thinking caps and start incentivizing your employees today! 

Motivation is in the air!

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It’s that time of year again – the first marketing piece for The Motivation Show has landed on my desk.

For those of you new to incentives, The Motivation Show is a long standing conference and exhibition for the travel, event, recognition, incentive, and meeting industries.  It is always held at McCormick Place in Chicago.  This year’s event runs from October 12^th – 14^th.  The show is a great source of knowledge for anyone – whether you are a seasoned professional at incentives, trips and meeting planning or someone who is brand new to the industry. 

It can be overwhelming stepping onto the exhibit floor and staring down aisle after aisle of vendors – where do I begin is a common thought.   Below you will find some tips to maximize your time while at the show:

TIPS:

1. Split your time between the exhibit floor and the conference.  Choose at least two conference sessions that intrigue you.  This way you limit you chances of becoming exhausted by walking nonstop – you can recharge while attending a conference session and learn something at the same time.
   
   
2. When walking the exhibit floor stick to a plan – start from one end or the other and stick with that and go through each aisle one by one – do not jump around all over because invariably you will miss something important.
   
   
3. Wear COMFORATABLE shoes – your feet will thank you!
   
   
4. Carry bottled water in your bag and some snacks.
   
   
5. Plan your meals during off-peak times – have lunch at 11 or 1 and if possible eat somewhere besides the exhibit center at least once during your stay.
   
   
6. Bring business cards, a notebook and pen and remember to carry them with you at all times.
   
   
7. Don’t be lured into taking a free gift from every vendor – you will regret it when you try to stuff all of it into your luggage and most likely it will end up in you hotel room garbage can.
   
   
8. Have fun – for more information go to – www.motivationshow.com
   
   

Successful Incentive Programs

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People have a tendency to over complicate things they are unfamiliar with such as Incentive Programs.  Incentive Programs don’t have to be daunting – you just have to follow you’re ABCs…..

Acknowledge, Acceptance, & Approval – acknowledge that your company, team, unit, division will benefit from an incentive program of some kind – safety, years-of-service, sales, referral, call center, Health and Wellness etc. Once you acknowledge this, you should gain acceptance and approval to develop a program from whoever will be involved in the final decision. It is more efficient to bring everyone to the table at the beginning of the process who will ultimately make the final decision then to spend hours researching and interviewing potential vendors only to find out senior management does not hold the same viewpoint as you in terms of offering incentive programs.  Work smarter not harder.

Begin – begin the process of creating an incentive program. Once the concept of an incentive program has been discussed and approved then the work begins. It can be overwhelming researching incentive programs and potential vendors.  There are plenty of sources of good information to get you on your way a few are listed below:

Incentive Marketing Association – www.incentivemarketing.org

Incentive Magazine – www.incentivemag.com

INmarketing Group – www.inmarketinggroup.com

Don’t get caught in “paralysis by analysis” – choose three to five potential incentive solutions providers to research.  Reach out to each of them and be prepared to answer some basic questions, but more importantly be prepared to ask some basic questions.  Some examples are below:

BASIC QUESTIONS TO ASK POTENTIAL INCENTIVE SOLUTIONS PROVIDERS:

1. Do you offer point based incentive programs?
2. What types of awards are available?
3. Do you bill on issuance or redemption of points?
4. Do you have your own software or do you outsource?

BASIC QUESTIONS YOU SHOULD BE PREPARED TO ANWSER:

1. What is your budget?
2. What is your timeframe to launch?
3. Who is your audience?
4. What is the goal of the program – drive sales, modify behavior, years-of-service

Check – once your program has launched you need to check back in often with your program administrators, participants, incentive vendor. Programs can be very streamlined and automated, but no program should run on auto pilot.  Are the goals being met, are the participants engaged, are you having quarterly progress meetings with your team and the vendor. Is there a constant stream of communication to the participants?

If you plan you work and work your plan and follow your ABCs you should have a very successful incentive program!

Health and Wellness Incentive Programs

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An apple a day keeps the doctor away...everyone is familiar with this saying, but did you know that your employees can do a lot more to improve their health and lower your employer health costs.  Savvy companies are rapidly adopting Health and Wellness programs for their employees.  These incentive programs reward participants on a variety of activities and behaviors such as health assessment surveys, smoking cessation, gym memberships, weight loss and generic drug purchases. 

Benefits of implementing a Health and Wellness program go far beyond lower health care costs to include diminished injuries, lowered absenteeism, increased morale and loyalty, increased productivity, reduced use of medical care benefits, lowered workers’ comp/disability, positive perception in community, diminished turnover, improved recruitment for competent workers.  With current healthcare expenditures at a record high of $1.7 trillion, can your company afford not to have a Health and Wellness program?

Did you know that 70% of healthcare expenses stem from preventable causes - obesity - smoking - diabetes are all preventable.

Click here for information on our Health and Wellness program.

Cash Incentives Rule - or do they?

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When given a choice between cold hard cash or a lifestyle award (grill, golf clubs, TV etc.) most people see dollar signs and will immediately say cash please! 

Dough, moolah, greenbacks, bread, C-Note, money - there are countless names for US Currency and countless ways to spend said currency.  What exactly do we spend our money on anyway?

Most people spend their salary on living expenses – groceries, gas, utilities, mortgage/rent, car lease/payments and if you also have children add on diapers, formula, tuition, clothes…  All of these expenditures are necessary and important, but quite forgettable from an experience or trophy value perspective.

Cash is compensation – it is what you receive for showing up to work everyday.  Cash is not an effective incentive award choice. 

When cash is chosen as the award mechanism in an employee incentive program participants tend to start relying on that award as though it was part of their compensation plan – they earmark what that money will be spent on – their latest cell phone bill, fill up the car with gas for the upcoming week’s commute – all the necessary things that are completely forgettable.  If you ask an employee what they have done with their cash – in most cases they will not be able to give you any specifics at all – the money has been lumped into their paycheck and spent on their living expenses.

Lifestyle awards now are another story.  When an employee is engaged in a point based lifestyle awards program they begin to peruse the awards catalog and start making mental notes about which award or awards they really want – an HDTV, grill, watch, or spa retreat perhaps.  What do all these items have in common – these items all carry high trophy value and these are also the type of items that an employee would not usually make with their paycheck (compensation) because all that money is going towards gas and groceries.

Before you give in to your employees’ demands for cold hard cash ask yourself what will be more impactful and meaningful to them – buying gas or having that HDTV for family movie night, that grill for the quintessential back yard barbeque, that watch for their spouse’s birthday, or that spa retreat just because.