It's gift-giving season, and many employees are creating a wish list for bonuses or acknowledgments from their employer. But the challenges of the post-pandemic economy, remote work and possible recession can make gift giving tricky.
What's a good gift for an employer to give, and what's the best way to give it?
Research from global payments provider Blackhawk Network (BHN) indicates that 57 percent of 2,000 U.S. respondents wanted to receive a reward from their employer at the end of the year, but only one-third anticipated that they would get one. More than half—52 percent—didn't like their companies' holiday gifts.
According to Mindi Cox, chief people officer at O.C. Tanner, a global employee recognition firm headquartered in Salt Lake City, "You might not be able to do or give away what you did last year, but you've got to do something. You've got to have some strong messaging around your purpose and sincerely acknowledge your people's efforts on top of commemorating them somehow, whether that's through a points deposit, a selection of gift cards, a company or teamwide gift, or cash."
What Are They Gifting?
Aside from bonuses, holiday events and parties, many employers give gifts such as gift cards, food or even alcohol. According to research from corporate gifting platform Reachdesk, based in New York City, 77 percent of employees believe that a gift expresses how special someone is. Gifting, said Reachdesk CEO Temy Mancusi-Ungaro, is important "and makes employees feel appreciated, especially in remote and hybrid settings."
Gifts have become more common during the pandemic, Mancusi-Ungaro said, as companies made an effort to engage hybrid and remote workers. The holiday season is likely to prompt more of these efforts. "Companies are sending physical gifts to employees since the pandemic, and more often are sending personalized, physical gifts like a bottle of wine, box of chocolates, spa kit, etc.," he said.
Gifts don't have to be extravagant to be meaningful. Budget will, of course, dictate how much companies spend on holiday gifts and events this season, but there is some research that suggests a "sweet spot."
O.C. Tanner conducted an experiment on companywide recognition to determine an optimal price point. They explored "thresholds of effectiveness" and found that gifts worth just $5 given to the whole staff can lower engagement and be perceived as insincere. More expensive awards, however—worth $50, $250 and $500—generated statistically better results.
Their ultimate conclusion: Companies should spend at least $50 per employee on awards for companywide recognition events.
How to allocate the gift budget is an important consideration and should be given some thought to ensure a meaningful impact.
Make It an Experience
Like with personal gift giving, just giving workers cash or gift cards doesn't have the same impact as giving a gift that creates an experience.
"It can be tempting for companies to just solve everything with just cash, but that won't have any meaningful impact on its own," Cox said. "To make a difference, the gift-giving process can't feel like a transaction—it has to be an experience. There needs to be some thoughtfulness, sincere appreciation and purpose behind the associated actions."
Cox said companies may be tempted to cut back this year due to rising costs and inflation, but she advises against it. Competition for talent continues to be strong, she said, so "it's going to be crucial for organizations to keep their people first and foremost in mind." Even if employers give less than in years past, she said, "you've got to have some strong messaging around your purpose and sincerely acknowledge your people's efforts on top of commemorating them somehow."
In August, O.C. Tanner gave employees an assortment of gift cards to choose from to help address inflation issues like rising prices on groceries, gas and household items. The company included a note acknowledging the economic situation and thanking team members for their efforts during trying times.
Do's and Don'ts of Holiday Gift Giving
The larger the organization, the less likely that the gift options selected will appeal to everyone. What employers can do, though, is take steps to maximize the positive impact of whatever gifts they decide to give.
Mancusi-Ungaro offered some do's and don'ts for employee gifting:
- Do pay attention to what employees like and what they talk about and give them things that they will truly enjoy.
- Do personalize gifts to employees.
- Do pay attention to the timing of gifts. Aside from the holiday season, other gift-giving occasions might include birthdays, first day/last day at the company, promotions, work anniversaries and celebrating a new home or child.
- Don't send something generic that feels transactional.
Jennifer Hartman, an HR staff writer and human resources expert for Fit Small Business, added that putting some thought into the presentation of gifts is also important. "Gifts for employees don't have to be expensive or elaborate," she said. "Even small, thoughtful gifts can show that you care about your employees and appreciate their hard work."
Thinking of when and how to present gifts is another important consideration. Will they be sent to employees' homes? Presented to them personally by their managers or senior leadership during an event? Left in their workspaces as a fun surprise? The thought counts—but so does how that thought is manifested. Making it meaningful may require an extra effort to have an impact that is beyond the norm.
Finally, although it may seem somewhat Scrooge-like, don't forget that employee gifts—even events—may be taxable.
Lin Grensing-Pophal, SHRM-SCP, is a Wisconsin-based business journalist with HR consulting experience in employee communication, training and management issues.