Gift vouchers, it seems, are the flavour of the month as far as benefits are concerned. Why so?
Gift vouchers may well be one of the only growth areas in the UK today. They boast an overall market worth £3.2bn a year – 40% of it from the business-to-business (B2B) sector, according to industry body the UK Gift Card and Voucher Association (UKGCVA).
Employers have finally cottoned on to the fact that happy staff are productive staff, and that now, more than ever, they need to keep workers motivated. While the likes of training and development have, to some degree, fallen by the wayside as the recession continues, employee engagement is holding its own. And while pay rises are few and far between, employers have begun to recognise gift vouchers as a relatively low-cost reward that has an element of ‘treat’ about it.
Andrew Johnson, director general of The UKGCVA, says: “Companies like gift vouchers because of the convenience and choice – they’re leaving the final decision to the individual, but still giving them an informed choice.” He says that it’s all about finding the right brand for the right employee.
Andrew Sellers, development manager, commercial, John Lewis Direct, agrees, adding: “Receiving cash is great, but people will struggle to remember how they used it. Giving vouchers involves something tangible.”
So vouchers are proving their worth as a flexible and cost-effective reward that can be tailored to suit the beneficiary. Flexibility is key –- most vouchers have no expiry date, meaning that staff can set them aside for special occasions, or simply use them as part of their regular shopping.
And vouchers redeemable across a range of retail outlets are becoming increasingly popular. For instance, Sainsbury’s vouchers can be used across the supermarket chain’s stores, petrol stations and coffee shops, while Love2reward’s high-street gift voucher is accepted in more than 80 high-street stores.
Kuljit Kaur, head of business development at The Voucher Shop, stresses the importance of picking the right voucher. She says: “Employers need to understand what kind of behaviours they want to generate by giving staff vouchers. Too often clients spend too much time looking at the reward side.”
As she points out, giving someone a £2 voucher for selling a £1,000 mobile phone isn’t much of an incentive. And Kaur has a word of warning for anyone buying vouchers, saying that take-up of vouchers depends very much on how the company markets the benefits to its employees, and the steps they take to keep the scheme fresh and alive.
So, while vouchers represent a real benefit to both the company, in terms of staff motivation, and to employees, in terms of non-cash bonuses, their success relies, as does so much else, on preparation. Know what you want, from whom, for whom.
What the flex providers have to offer
Flex providers can offer scale. If employers want to offer vouchers for a single store, that’s all well and good. But if they are thinking about offering vouchers redeemable at a range of outlets, flex providers will have the necessary resources and expertise. And they are in a better position to avail of bulk discounts, passing on a percentage of the savings to the employer. Flex providers are also able to offer online voucher facilities and staff communications that may be beyond the means of the individual employer.
Raegan Matthews, business incentives manager, House of Fraser, which sells vouchers both via agencies and direct to corporate customers, says: “Employers may wish to run a complex scheme with regular updates, e-newsletters, presentations and so on. In such instances, companies would choose to outsource to a specialist agency.”
The Voucher Shop sells £65m of vouchers a year. One of their clients is Lucite International, whose HR administrator, Lynne Scott, says: “We reward employees for long service. We don’t have the time or the resources to contact individual stores direct. The Voucher Shop is able to supply a wide range of vouchers and issue them, as required, on our behalf.”
Flex providers can also offer vouchers redeemable across a range of stores.
Top tips: choosing vouchers
- Match the voucher to the recipient or reason for reward
- Make sure the vouchers are easily redeemable
- Decide whether you want to offer vouchers for one store or several.
The tax implications for vouchers
The UK Gift Card and Voucher Association has put together a useful factsheet covering the tax implications.