Employers will work harder than ever to retain staff this Christmas, as new research has shown UK firms are spending millions on end-of-year bonuses and parties.
To counter the threat of skill shortages in 2018, a recent study by the Prepaid International Forum (PIF), revealed a 23 per cent rise in the number of employees due to receive a festive reward or bonus this year.
A poll of more than 2,000 British workers by the not-for-profit trade association found that just over a fifth were in line for a Christmas bonus, compared to just 14 per cent last year and only seven per cent in 2014.
Retail gift cards and rewards schemes were found to be increasingly popular forms of rewarding staff by employers at the end of the year.
One4All Rewards, a leading corporate incentive scheme provider and member of the PIF, reported that sales of multi-retail gift cards and rewards schemes had gone up by 25 per cent compared with the same period a year ago.
However, this seasonal generosity was revealed to be more about business goals than spreading Christmas cheer. The study showed that employers’ main motivation for rewarding staff with bonuses was to retain them, after a year dominated by Brexit uncertainty and concerns over skill shortages.
A spokesperson for PIF, Alastair Graham, said in a statement: “Christmas is a traditional time to show workers that you appreciate their efforts and provide a little extra to help them celebrate and enjoy themselves over the festive period.
“Our study shows that businesses increasingly understand the importance of retaining their best staff and the impact that providing an annual ‘thank you’ has on loyalty and motivation.”
Managing director at One4all Rewards, Alan Smith, said: “We’re seeing companies plan their annual rewards earlier this year and in bigger numbers. It’s noticeable how it’s not just large corporations planning bonuses and rewards. Increasingly, smaller businesses are also getting in on the act.
“Our studies show that even smaller value bonuses, paid through non-cash devices like gift cards, can have a huge impact on staff motivation and loyalty, particularly with younger workers and those on lower wages, for whom a little extra makes a big difference.”
Employers are spending more money than ever on staff Christmas parties. In 2017, PIF member firm Payment Card Solutions (PCS) revealed a 400 per cent increase on the number of business owners ordering prepaid cards to be used on Christmas party spending than 12 months ago.
The company’s CEO Paul Swinton said there’d been particularly high uptake amongst businesses with large UK-wide networks. He added: More cards are being issued to managers to treat staff and help each store or office to organise their own Christmas party. and use the prepaid card to fund the evening.”
Sign up to our newsletter to get the latest from Business Advice.