When setting up your workplace benefits, you might be wondering what to include in the package to help employees feel supported and rewarded at work. Two popular options are discounts and incentives. But what’s the difference?
An employee discounts scheme offers employees money off purchases, which might be everyday costs like coffee, groceries or subscriptions, or could be bigger-ticket items like holidays. An employee incentive scheme gives certain employees a reward for good work, which can be monetary or non-monetary.
Which scheme is right for your company might depend on a number of factors. In this guide, we’ll help you understand the key differences so you can make the best choice for your team.
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Employee discounts schemes: tangible savings for every team member
Employee discounts schemes provide your staff with money off things they might want to buy. These are usually in the form of voucher codes, prepaid cards or cashback.
Common discounts categories include:
- Groceries and other supermarket staples
- Clothing and accessories
- Restaurants, cafés and pubs
- Food takeaway services
- Hotels and other holiday accommodation
- Cinemas
- Entertainment subscriptions
- Tickets for attractions including historic sites and theme parks
- Gym membership
- and more…
Some of these discounts might be small amounts that employees can use regularly, like supermarket savings they can make every week, adding up to larger amounts over time. Others might be one-off savings on more expensive splurges.
What are the advantages of an employee discounts scheme?
You might consider investing in a discount scheme for your employees for a number of key reasons, including:
- A benefit for everyone: A discount scheme is usually available for all employees. They can access the discount as and when they need to use it.
- A tangible impact on employee finances: Employees can see the difference your investment makes, whether they save a few pounds on their weekly shop, or get a cut-price holiday.
- Links to wider wellbeing: Discounts can help your employees improve their physical wellbeing through exercise and healthy eating, build mental wellbeing through discounted therapy and even a much-needed break, or spend restorative time with their families.
- Limited admin for you: Setting up a discount benefit can be as simple as signing up to your preferred platform. Most discount providers have an established service and will do the hard work of going out to partners to find new offers, so you can sit back and relax!
Are there any downsides to an employee discount scheme?
Traditional employee discount schemes can be unwieldy for staff to access. For example, some platforms offer hundreds of different deals, which may take significant time to scroll through. If employees aren’t sure what’s included or relevant for them, they might be less likely to use the benefit at all.
This potential inertia doesn’t have to be the case. Working with the right provider can help you with important insights and considerations for how to choose the right employee discounts scheme.
Employee incentives: targeted rewards for top performers
Employee incentives are rewards you provide for selected team members.These can range from small gestures of recognition like shout-outs or certificates, to bigger perks like time off or fun team-building activities. Monetary incentives could include extra pay or a bonus, commission or stock options.
What are the advantages of an employee incentive scheme?
You might decide to introduce incentives for some of the following reasons:
- Explicit rewards for performance: You can tie the incentives to particular KPIs or targets, or reward employees for overall effort or attitude. This can help your company reach its goals and reinforce the values and behaviours you want to see.
- Retain top employees: Your high-flyers might be hot property. To help keep them at your company, rewarding their performance could be the key to increased loyalty.
- Diversify employee compensation: Constantly raising salaries across the board to improve employee morale can be tough, especially for smaller companies.
- Mix and match: You don’t necessarily need a platform or provider for incentives – many are easy to introduce on your own, without the need for a big budget if you opt for smaller gestures like shout-outs.
Are there any downsides to an employee incentive scheme?
- Not everyone benefits: The point of an incentive scheme is to reward selected employees only. Other team members may miss out, which could even decrease their motivation.
- Requires careful planning: You will need to make sure the incentive structure is absolutely clear for employees. What do they need to do to earn an incentive? Is it linked to a particular target or KPI? This is essential for making sure employees find the programme fair and transparent.
- Could mean more work for you: Incentive schemes need to be carefully tailored to your context. Even if you work with a provider, you will need to put some effort into creating an appropriate programme.
- Might only achieve temporary results: Some studies suggest that employees may temporarily raise their effort in order to gain the incentive, but it might not foster long-term results.
Should I choose employee discounts or employee incentives?
The two schemes aren’t mutually exclusive! You could offer discounts to all employees, with a different kind of incentive as a rewards programme. This could help ensure that everyone feels supported, at the same time as motivating high performance.
If you can only afford to introduce one scheme, you should consider which is most suitable for your team. Incentives can be a short-term boost, whereas discounts can be a longer-term investment in employee wellbeing. You might also consider whether your organisational structure supports a clear incentive programme (i.e. do you have suitable KPIs? Are they achievable for all employees?).
If you’d like to discuss your employee benefit options in more detail, Maji can help. Our holistic financial wellbeing platform allows you to integrate employee discounts seamlessly into your overall benefit strategy, helping you boost engagement while keeping costs under control. Through Maji’s spending planner and budgeting tools, employees can clearly see which discounts are most relevant to their personal circumstances and how to maximise the value of the benefits you provide.
FAQ
Are employee benefits the same as employee incentives?
No, employee benefits are not the same as employee incentives. Employee benefits are offered to all team members (unless there’s a specific business case not to, e.g. a company car), and are usually accessible from day one, or after passing probation. Incentives are given as a motivating reward for work performance.
Is it worth investing in an employee discount scheme?
An employee discount scheme can make employees feel supported, help them improve their financial situation, and give them access to things that can actively help their mental and physical health, too. However, it’s important to choose a provider that makes it easier for employees to access relevant deals and helps them understand their savings in the context of their wider finances.
