Simple Employee Retention Incentives to Reduce Turnover: New Research

Employee retention is top of mind for most companies, which makes finding effective employee retention incentives top of mind for most HR professionals. Thankfully, this doesn’t have to be a guessing game, because new research from Fiserv clearly highlights what works best for any incentive plan.

The latest findings in their Q4 Gift Card Gauge reveal what employees actually want when it comes to perks and incentives. Companies can use this data to refine their retention strategies and other employee initiatives. Done right, it can be easier and more affordable to boost employee morale than you might think.

In this article, we'll explore the key takeaways from Fiserv’s research and how they can help shape more effective employee retention programs.

Do employee incentive programs work?

An employee retention incentive is a reward or benefit given to employees to encourage them to stay with their company. They’re designed to enhance loyalty and job satisfaction while also reducing turnover. Well-structured recognition and rewards can directly contribute to a sense of value and motivation, which is critical for employee engagement overall.

These types of perks and monetary rewards are also especially relevant for companies facing high recruitment costs, since reducing turnover can significantly cut expenses associated with hiring and training new staff.

Assuming they’re purposefully designed and implemented, employee incentive programs can reduce employee turnover while also boosting employee experience, engagement, and productivity.

According to the Society for Human Resource Management (SHRM), employee recognition programs make employees feel valued while also helping to improve retention rates. Well-designed incentive programs can be a significant tool for reducing turnover and boosting employee engagement.

And engaged employees show 21% higher productivity and are less likely to leave their jobs compared to their less-engaged peers.

The most effective employee retention incentives

Fiserv is a global fintech company that polls thousands of US consumers from broad demographics for their quarterly surveys. Their latest Gift Card Gauge offers critical new data on what motivates employees and drives retention.

By using this data, companies can build a rewards system that resonates deeply, encourages loyalty, and helps foster a positive work environment where employees are motivated to stay.

Key Highlights from the Fiserv Report:

• Recognition matters: 89% of respondents said that receiving employee rewards or incentives helps them feel valued and appreciated.

• Everyone wants gift cards: 86% of respondents agreed that gift cards are an appropriate employee reward, and a full 74% think gift cards are more valuable than other types of incentives.

• Growing incentive culture: The number of employers providing more rewards has grown, with 20% giving more incentives compared to last year. This shows a broader industry trend of prioritizing employee satisfaction and retention through tangible rewards.

• Monetary value matters: 56% of employees want incentives worth at least $100, suggesting that higher-value rewards are more impactful in showing appreciation and driving satisfaction. Companies looking to maximize the impact of their incentive programs should consider the perceived value when selecting rewards.

• The timing of incentive payments matters: 54% of respondents prefer having both annual and performance-based incentives available. This indicates that combining different types of rewards can be more effective in addressing diverse motivations among employees—annual rewards outside of base pay for consistent performance, and timely bonuses for outstanding achievements.

Employees have spoken: a salary alone is no longer enough to keep top talent. And the most effective employee incentives for reducing turnover rates are gift cards and prepaid cards that are given throughout the year for different reasons, ideally in increments of $100 or more.

Incentive programs aren't a one-size-fits-all solution. These stats show that the most successful programs are those that are thoughtfully aligned with what employees need and value most—recognition, flexibility, and appropriate monetary value.

Companies therefore need a flexible, affordable way to deliver these types of rewards on-demand.

What incentives do your employees want most?

While this new research points to what most employees want most of the time, there is a simple way to figure out exactly what your team wants. You can just ask them!

If you don’t already, include questions about employee benefits and retention bonuses in your employee surveys. Be sure to follow best practices for increasing employee engagement in surveys (like sending SMS and email invites and creative reminders to nudge employees), to ensure a well-rounded, representative sample. Survey incentives can also work well here.

That said, here’s a pro-tip: research clearly shows that budget-boosting practical rewards like gas and grocery gift cards are almost always highly appreciated by most employees.

How to structure an effective employee retention program

Creating an effective employee retention program involves a blend of strategic planning, thoughtful incentives, and a strong focus on employee engagement.

To build a program that truly resonates with your team, consider these high-level components:

1. Define clear objectives: Begin by outlining what you want to achieve with your retention program. This could be improving overall engagement, reducing turnover by a specific percentage, or fostering loyalty among high performers. Having clear goals will help guide your choices in structuring the program.

2. Incorporate meaningful incentives: According to SHRM, well-designed incentives should align with both company goals and employee preferences. Offering more meaningful incentives like gift cards or flexible work arrangements can help drive desired behaviors and increase satisfaction.

3. Balance recognition and compensation: While monetary incentives are important, non-monetary recognition also plays a significant role in retention. Publicly acknowledge achievements, celebrate milestones, and offer personalized rewards to help employees feel valued beyond their paycheck. A good mix of recognition, both monetary and non-monetary, has been shown to boost morale and foster commitment.

4. Provide opportunities for growth: Team members are more likely to stay when they see a future at your company, so empower them with pathways for advancement and skills training. Growth opportunities not only demonstrate your investment in your employees but also strengthen their loyalty to the company.
   
   For example, one of our cultural principles at Giftbit is that ‘we adopt a growth mindset,’ which means we purposefully invest in developing ourselves—our talents, judgment, character, intelligence, and creativity.

5. Ensure consistent communication: Retention programs work best when employees know what to expect. Consistent and transparent communication regarding available incentives and supplemental wages, performance expectations, and career progression is vital. Make sure everyone on your team feels secure in their role and confident that their contributions are valued.

Ultimately, the most effective programs address both tangible and intangible employee needs—offering financial incentives while also nurturing a supportive, wellness- and growth-focused work culture.

What are the 3 Rs of employee retention?

The "3 Rs" of employee retention are Recognition, Rewards, and Respect. These three elements are essential for building an effective retention strategy, directly contributing to a positive work environment where employees feel valued and motivated to stay.

Recognition is about acknowledging employees for their hard work and achievements. Regular and sincere recognition fosters a sense of belonging and boosts morale.

Rewards go hand-in-hand with recognition, providing tangible value for employees to enjoy. Digital rewards are particularly effective and increasingly popular because they offer flexibility and personal choice, so that the entire experience feels more meaningful. Digital gift cards and prepaid cards in particular provide a quick and easy way to reward employee contributions, ensuring that appreciation is both timely and impactful.

Finally, Respect will be at the core of any successful retention strategy. Rewards and recognition flourish when the people offering them genuinely respect their employees' contributions and care about their well-being

How can small businesses improve employee retention on a budget?

Every HR professional worth their salt understands the importance of employee engagement. But of course budgets for employee engagement vary wildly. Thankfully, even small businesses can meet their hiring and retention goals by focusing on affordable incentives, embracing digital solutions, and fostering a supportive culture.

The days of having to pay up for things like employee merch and gift baskets that no one wants are long behind us. Instead, small businesses can leverage digital gift card providers to send instant, highly appreciated rewards to team members, without all the added hassles and expenses.

By choosing a transparent gift card distributor, you’ll ensure that your entire budget is spent on the incentives themselves, without hidden costs.

For example, there is no additional cost to use Giftbit to send employee rewards. If you want to send an employee a $100 gift card or prepaid card, that will only ever cost you $100. And your employee’s gift will be $100, too. It’s a cost-effective way to recognize employee efforts and boost morale without significant expense.

Furthermore, Giftbit can offer revenue sharing for large programs—reach out to Business Development Director Matt Brossard if you’d like to learn more.

Make employee engagement easy and digital

Engaging employees doesn’t have to be complicated or time-consuming. Making rewards digital means they’re accessible and convenient. There is no manual work, no mailing costs, no guessing—just instant, impactful recognition.

To start, using digital rewards can make employee engagement a seamless part of your everyday workflow. It’s easy to integrate Giftbit into existing tools you already use, like BambooHR, Workable, and Zoho Recruit. For example, you could just set a no-code trigger to automatically send rewards on an employee’s work anniversary.

Note, too, that the Giftbit rewards catalog is global with built-in currency conversion. It lets you easily send rewards internationally—making it far simpler than sourcing seemingly endless appropriate gifts for employees in various countries.

Reporting and analytics from Giftbit also lets you see whether your employees are redeeming their rewards, and for what brands. This type of insight will help you continually refine your program by offering the most desirable rewards (hint: according to Giftbit Head of Operations Emilie Fyfe, “people love choosing their favorite reward from the catalog.”).

Finally, eGift cards and prepaid cards from Giftbit can be personalized and delivered instantly. They work well for everything from bulk holiday gifts to one-time welcome gifts to new hires and everything in between.

Remember that the key to an effective engagement strategy is consistency. When recognition is easy to give and integrated into your workflow, it’ll happen more often. With the right approach, employee engagement can be streamlined, digital, and impactful.

Support a flexible and remote work environment by using digital incentives for employee retention. Sign up for Giftbit or watch a quick demo now.