At the peak of the pandemic, the unemployment rate in the U.S. hit 14.8% representing 23.1 million people. Since then, we have seen a comeback of sorts as the unemployment rate as of July 2021 is 5.4%. Many sectors of the economy need to fill open roles to meet demand, including Healthcare, Hospitality, Professional and Business Services, and Education. Traditional Retail serving the needs of brick and mortar stores continues to be a challenge. Since February 2020 the workforce in retail is down by 270,000 as of July 2021.
By: David Slavick
Massive transition from employees shifting work to home from traditional office has had a dramatic impact on how the employer recognizes and rewards their valued employees. Indeed, millions of employees have changed jobs during the pandemic with millions more considering a move to new sectors that perhaps they never would have considered before. The perks employers offer current and future employees is likewise significantly influenced by these ever-evolving conditions.
One aspect of rewards or benefits that has traditionally been a standard for many in the retail sector is participation in the loyalty program. What better way to show off your love for the brand you work for than wearing their clothes, shoes, and accessories while on the floor of the store? Likewise, being a brand lover as employee of the brand entity whether it be health and beauty products, electronics, home goods, travel and leisure, all accrue incremental benefits in the form of discounts, special perks, savings, and so much more.
A natural beginning point for many companies that have an employee recognition and rewards program is, “do I consider offering a perk to employees by allowing them to earn in the program similar to the general consumer population?” Many companies exclude employees for various reasons — too much turnover/hard to manage, risk of fraud/loss prevention by giving benefit to others (bigger employee discount on goods sold than general market offers), and cutting into margin by giving discounts on goods selectively purchased by employees once severe discounting is applied in-store or online. A critical examination of the existing program structure, design, and associated financial implications through modeling is indicated to get at these fundamental questions leading to a new operating model.
Here a few essential operational considerations when considering employee recognition:
- Do you have the mechanisms in place to update your employee roster to accurately onboard new employees so they get their benefits soon after joining the company, and conversely update the attribute on the master database to remove an employee post departure?
- Are the benefits you once offered pre-pandemic still as compelling as originally constructed? Taking into account a shift in work from home vs. in-office, what could be offered that would prove most beneficial for employees that wasn’t offered before — such as free returns, free shipping?
- If your business offers a private label credit card or even a co-branded credit card with extended benefits for the general consumer or loyalty program member with incremental earning and associated benefits, but up until now excluded your employees from that same set of benefits, perhaps now is the time to explore the business case with your card issuer and finance partners.
- Does your employee program offer a “friends and family” savings component? Given the challenges of the pandemic regarding employees and their extended network of friends and family equally impacted, perhaps extending savings events through private shopping offers would be appreciated while supporting new customer acquisition as well.
If you haven’t re-examined your employee reward and recognition program of late — and certainly that is understandable given all the transformation swirling around so many different sectors of our economy — now is the time to consider them.
David Slavick is a world class expert at CRM/Loyalty business case development, program design/strategy, and global technology assessments. He has designed some of the largest, most successful loyalty programs in retail, restaurant & hospitality, department store, and e-commerce sectors.
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