Through employee discount programs, organizations provide their workers with below-retail prices on merchandise, entertainment and other perks. These programs vary in scope and design:
• At their most ambitious, the programs can be administered by a service vendor that provides employees with access to an online portal to make purchases, collecting fees from participating merchants based on sales and with no administrative expense for the employer.
• At a simpler level, a program might consist of passing along discounts to employees from local or national merchants that are communicated to employees via the organization's intranet; e-mail to staff; the distribution of coupons, brochures and memos; or noted in the employee handbook and orientation materials.
A Society for Human Resource Management (SHRM) survey report based on a random sampling of SHRM members revealed that more than half (58 percent) said they had an employee discount program. Larger employers were more likely to have a program than smaller ones—94 percent of organizations with 25,000 or more employees vs. just 19 percent for those with fewer than 100 employees.
Below are findings from the poll, which was fielded Sept. 28-Oct. 12, 2011.
Does your organization use a third-party administrator to manage employee discounts?
• No (79 percent).
• Yes (21 percent).
What kinds of goods and services are most commonly offered?
The top five employee discounts offered by those with an employee discount program were:
• Computer hardware/software (57 percent).
• Health/wellness services not covered by health insurance or a wellness program, such as fitness classes or sports club memberships (55 percent).
• Goods and services at specific retail stores or retail sites such as shopping centers (46 percent).
• Entertainment tickets (46 percent).
• The organization’s own goods and services (43 percent).
• Restaurants (35 percent).
• Consumer electronics other than computer hardware/software (34 percent).
• Travel (33 percent).
• New auto sales or auto services (29 percent).
• Clothing (23 percent).
• Service discounts such as home cleaning and dry cleaning (19 percent).
• Phone discounts (6 percent).
Which employee discounts are the most popular?
Nearly one-quarter (24 percent) of HR professionals reported that their organization’s goods and services were most popular among participating employees, followed by health/wellness services and entertainment (15 percent each).
Computer hardware/software was the fourth most popular discount (10 percent).
Do employees use employee discounts?
HR professionals reported that the number of employees who used at least one employee discount a year was:
• From 1 percent to a quarter of employees (32 percent of respondents).
• From just above a quarter to half the employees (28 percent).
• From just above half to three-quarters of employees (17 percent).
• From just above three-quarters to all employees (23 percent).
Do employees value employee discounts?
The majority (55 percent) of HR professionals reported that their employees highly or somewhat valued these discounts. More than one-quarter (27 percent) indicated that employees were neutral about employee discounts, and 18 percent reported that little to no value was attributed to employee discounts.
It's unlikely employees would accept a job or remain with an organization based on its employee discount program. However, given the low administrative cost and the small amount of time and effort this benefit typically involves, the amount of goodwill that's promoted can be a bargain.
Here’s the Deal: Discount Programs Provide a Low-Cost Benefit, HR Magazine, March 2012
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