How to keep employees happy in a troubled economy? Celebrate their work

No matter how much an employee might love remote or hybrid work, we've yet to replicate the full-time camaraderie and culture that comes with sharing office space with your bosses and peers. Throughout the pandemic, employee rewards and recognition were embraced to boost spirits and remind workers that they're part of a larger community. But as the economy falters, are those coveted perks on their way out? 

In the U.S., the marketplace for non-cash rewards and incentives is a $90 billion industry encompassing gift cards, merchandise and other "prizes" used to bolster productivity and connection at an organization. For Blueboard, a startup that helps employers provide personalized, experience-based rewards to its workforce, business boomed during the pandemic — and the demand for these offerings has yet to slow down. 

"You'd think that when there's a recession, there's a certainty that companies will pull back on these programs," says Taylor Smith, co-founder and CEO of Blueboard. "But we actually saw existing clients spend more over the last quarter." 

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As one mid-market CHRO told him, Smith explains, vital benefits like maternity leave and support for working parents will never experience cutbacks, no matter how bad any recession or economic crisis may be. The free lunches and wellness programs of the world — the perks of the workplace — are more at risk. But the idea of employee recognition, especially in a remote and hybrid world, is beginning to shift to the category of must-have rather than nice-to-have.

"This CHRO's view was that recognition really is a necessity, even more so when a company is facing a tough time," Smith says. "You can really stand up and step up by investing in your employees." 

From Smith's perspective, just as organizations have had to rethink the way they operate in a post-COVID world, it may also be time to rethink the way they reward workers. 

"Some organizations spend tens of millions of dollars of their budget on recognition each year, but they spend it on, say, things like giving an employee who did an awesome job a $250 Amex card," he says. "The person receiving that in the moment is going to be like, Oh, this is really nice. But they're going to spend the gift card on groceries or a haircut rather than something really for them. They're not going to remember it a week later, they're not going to tell their friends about it, and it's not going to make them more loyal." 

Read more: To thrive at work, employees need to be seen, recognized and celebrated

According to the Incentive Federation, a trade organization for the incentive industry, that thinking is in line with noted trends. For example, incentive and reward programs that offer merchandise or gift cards see productivity returns from employees 46% better than when programs simply offer cash. 

At BlueBoard, Smith is hoping to push recognition to the next level, working to make employee recognition about more than a dollar amount. Rather than give a rockstar employee a $500 cash prize or even a gift card to celebrate a milestone project or achievement at work, Blueboard enables employers to allow their workers to pick an experience of their choosing from the Blueboard platform — from reservations at a Michelin-starred restaurant to NFL tickets for the team of their choosing, or even a behind-the-scenes zoo tour for employees with kids. 

The cost of the reward is at the employer's discretion; from the employee's perspective, no visible dollar amount will be assigned to their work, ideally making the exchange feel more genuine. 

"Recognition has gotten so transactional, it doesn't feel like recognition anymore," Smith says. 

But celebrating employees with unexpected rewards can't be the start and end of a company's commitment to recognition, he stresses. 

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"There's a recognition pyramid that provides a nice framework for looking at this, and there are basically three types of recognition you should be doing as a company," Smith says. The first is peer-to-peer, "free-flowing" recognition that happens in daily interactions. The second is informal recognition, which flows from managers to employees. ("People don't leave jobs, they leave managers, right?" Smith warns.) Finally, formal recognition, which moves from the company to the employee. 

"There are ample opportunities for someone to feel seen," Smith says. "And that's really what  recognition is all about."