Budgeting for Employee Recognition
An organization should budget 1-2% of annual payroll costs to run a decent employee recognition program. This will cover awards, special events, gift cards, recognition items, and other necessities for the recognition program. A well-planned employee recognition program is a successful employee recognition program. Knowing your budget from the start allows you to make more informed decisions, which will benefit both your business and your employees.
As with most other planned expenses, it is always good to over-budget in case there are any unplanned events warranting awards or recognition. Say, one of your employees gets a huge contract with a client that will generate tons of revenue for your business… You would want to reward them, wouldn’t you?
Where to find budget dollars:
Excess budget dollars can be found tucked away in the strangest of places. If you need help trying to find funding for the employee recognition program, talk to the finance department, or your bookkeeper, to try and determine ways to make up the difference.
Discretionary spending budget can be a great place to find some extra dollars. Perhaps you had budgeted to buy a new printer but ended up leasing one instead. This could have saved you quite a bit of money, which you can use for your employee recognition. Do you have any assets lying around that you don’t use? Get rid of them! Selling them off opens up space in your office and also gets you those extra dollars you were looking for.
The marketing budget can be a great source of extra dollars. Did you actually spend all that money you had budgeted for social media or newspaper advertisements? If not, put those dollars to use rewarding your employees!
Lots of businesses have been saving some big bucks by using energy saving appliances. You’ll be surprised how the savings add up over time!
Ways to lower costs of employee recognition:
During the planning process, constantly keep your budget in mind so you don’t over-spend. For some businesses, it may be difficult to cover the costs of their employee recognition program. Here are a few ways to decrease your spending without sacrificing the most important thing—making your employees feel appreciated and essential.
- Contract with one agency to lower the cost of your recognition and award items. Instead of trying to find, design, and buy your own, reach out to an agency, like Birch Higgins, for your employee recognition needs. Often this saves both time and money without sacrificing quality, and allows you to get the most bang for your buck.
- Use low-cost forms of recognition. Employee recognition doesn’t have to be extravagant. Most employees love personalized thank you cards, a shout out on a message board, or even just a little paid time off work. Make sure whatever it is, your employees will treasure it.
- Plan one annual event for recognition. Rather than awarding employees multiple times per year, it can be cost saving to host an annual event whereby your employees receive their awards and recognition. This can be a teambuilding experience, and boost morale for the next year.
From all of us at Birch Higgins, we wish you the best of luck in planning your employee recognition program. For consultation on your awards and recognition needs, please contact us today.
Still not sure how much to budget? Check out this Reward and Recognition System Budget Calculator, to help you plan your employee recognition program.
For more on this topic, read Six Steps To A Better Business Budget and How Much Should You Budget for Employee Recognition.