Employee loyalty and rewards platforms rose in popularity throughout 2024 as employers strove to find cost effective ways to increase retention and engagement. These platforms provided tools that enhanced employee satisfaction by offering personalized incentives, fostering a sense of recognition and belonging. In 2024, HR teams increasingly leveraged these platforms to drive productivity, build loyalty, and align workforce motivation with organizational goals. Here are my top 5 predictions for what happens in the employee loyalty and rewards space for 2025:
- Every Employee Wants More Than a Paycheck
We are inundated with opportunities to earn rewards in our everyday lives, from rewards for buying clothes on a retail website, to Starbucks stars for buying coffee and a scone, to flying to a vacation resort using your favorite airline miles credit card. No purchase is deemed too small to make us feel that we are valued and these merchants want us to come back for more.
People spend a lot of time at work, so why not let employees earn rewards too for their labor? This will become mainstream in 2025 as employers seek to find ways to drive a connection with their employees.
2. Gift Cards Aren’t Great Gifts
While gift cards have some transactional value, gift cards are less than ideal for employee engagement due to expiration dates and difficulty in using exact balances. Many employees leave small amounts unused, resulting in lingering balances that eventually expire. This inefficiency diminishes the perceived value of the reward, making it less impactful and often disconnected from the work performed to earn the gift card in the first place.
3. Employees Want to Earn, Not Receive, Their Rewards
The model for employee rewards will change in 2025. “Reward,” by its very nature, implies there is a giver of the reward. “Let me give you this reward” or “I’m going to reward you.” In 2025, you will see the dynamic shift where employees will seek to earn a reward, as opposed to being awarded them. The days of “atta boy/girl” and pats on the back are over, even digital ones. Employees want to give themselves the validation they know they deserve rather than wait for someone to notice them.
4. Rewards Are a New Store of Value
In a challenging economic environment, reward points become a unique store and source of value. Just look at Starbucks’ rewards. If you have a tidy sum of Starbucks stars and forget your wallet, you can still get something to eat! There are over 34 million active U.S. Starbucks Rewards members, and more than half of Starbucks revenue comes from Rewards customers, proving that loyalty programs drive spending.
The same is true for employees. Give them a way to earn rewards independently, and their loyalty to your company will skyrocket. Why? Because they are saving for something they actually want, not gift cards!
5. Costs Down, Effectiveness Up
In 2025, we will see advances in technology that both reduce the cost of offering employee loyalty and rewards programs and improving their effectiveness. These programs become a win-win for employers and employees, but require the introduction of something beyond a value exchange. In 2025, you will see technology enable more of a behaviorial and emotional connection to the reward itself, which unlocks greater effectiveness of the reward versus its cost.
We’ll see you in 2025 for another ….rewarding year !
