A Complete Guide to Employee Gifting

In a recent interview with WCBS Newsradio 880, Shark Tank star Robert Herjavec uttered a simple but profound truth to Joe Connolly and Neil A. Carousso: “Whatever you start doing today, your business will not be doing that in a year. Things change. You have to adapt.”

One cursory glance at the history of corporate or employee gifting dawns upon us that this applies almost mirror-reflectively to it.

Corporate gifting: A brief history

The origin of corporate gifting dates back to the medieval period when gifts were the usual suspects in business trade. Marked by prestigious stones, skins of rare animals, and costly fruits, it saw a tectonic shift when the 20th century rose to the horizon.

Being witness to the two destructive world wars, they reflected prevalent social and economic conditions. Looking at World War 2 forced shortage of life-sustaining things, the then business and employee gifts were mostly of essential value.

When the clouds of war retreated, and life seemed to acquire some normalcy, the business gifts moved from the necessity to comfort usability being their nerve center. Newly invented gadgets, food items that were still a rarity, standard stationery, and fine clothing grasped the imagination of employers.

Soon came globalization, which made the boundaries between countries as porous as clay and thereby the above-mentioned objects ubiquitous and non-exciting. The strengthened economic muscles and ease of access made employees desire beyond mere things and goods.

Goods were not good enough, and the yonder of yet-unfelt feelings started to lure employees. And since it’s only within the realms of unique experiences to germinate such yet-unfelt feelings, the wide variety of experiences, from adrenaline-pumping adventures to gastronomical satiation through lip-smacking culinary miracles, climbed the wishlist ladder of employees.

The following stats unequivocally reflect that:

• 63% of U.S. adults (ages 18 – 65+) would prefer to receive an experience gift than a material gift this holiday season and 50% of U.S. adults plan to give experience gifts this year.
  
• 59% of U.S. adults believe that giving experience gifts is easier than shopping for material gifts.
  
• Over a third (36%) of U.S. adults want to attend more events/live experiences.
  
• 85% of U.S. adults agree that experience gifts are a great way for both the giver and receiver to enjoy something together; 93% of millennial women and 83% of millennial men (ages 18-34) agree with that sentiment.

Since the whole crux and reason of employee gifting is to make the employees happy, employers obeyed this newly-found wish of employees.

However, this is far from the evolution of employee gifting. Gifting, in essence, is a message given through emotions. And since emotions neither dry up nor go out of fashion, gifting in any form will always be in a constant state of flux. It’s then unsurprising that 73% of employers consider innovation very important while buying corporate/ employee gifts.

The Book That Popularized Business Gifting

Published in 1843 Christmas, Charles Dickens's novel A Christmas Carol was one of the key developments that boosted holiday gifting in the context of business.

The story traces the gradual yet heart-melting transformation of Ebenezer Scrooge from a selfish, rigid, and overtly calculative businessman to one who finally embraces generosity and spreads positive vibes among his employees. The book was received overwhelmingly, aiding in converting Christmas into a season of selflessness and generosity, especially towards employees.

What is employee gifting

Though it's not a rule, employee gifts are not branded and are given as an appreciation to a loyal employee or when an employee has excelled in work. They are also given to mark special personal and professional events in employees' lives.

The ethics of employee gifting

Like everything else concerning an organizational drive, employee gifting can be like skating on ice. This slippery slope doesn’t just arrive from administrative or budgetary concerns, but ethical connotations can have a serious potential to flare it up.

Gifting, however delightful an act it may be, has to ensure that it doesn’t cross the line of what is ethically and honorably permissible. This applies to both the employees and the employers.

An ethical workplace is a genuine desire of employees, and this assertion is intensely steep in studies and findings. A survey, which enquired what employees value most in their job, found that high ethical standards ranked third - followed only by fair pay and fair treatment. If looked further closely, even fair treatment falls under ethics.

Moreover, since corporate gifting, whether it’s to your clients or employees, reflects the values that you stand for, an error in it is a sure way to plant yourself in the pot of damaged brand reputation. Precaution, therefore, should be your first utterance.

The proactive, and thus ideal, approach is to lay out a strict and unbreachable employee gift policy. It should be well-heeled, thoroughly researched, clairvoyant enough to foresee the possible troubles in advance, and agile enough to timely nip them in the bud.

A comprehensive employee gifting policy should:

• State whom an employee can accept a gift from
• Spell out various circumstances under which employees may accept a gift
• Guide what is and isn’t frowned upon as a gift
• Decide what is allowed or prohibited

If you are at sea with no idea of what constitutes the DNA of a beneficial gift policy, let the following guidelines be your lighthouse.

1. Avoid giving gifts to your superiors

A reliable rule of thumb, almost a backbone, of workplace gifting is that gifts must flow down the hierarchy line, not upward. A boss, manager, or even senior HR may give gifts to their direct subordinates, and employees can laterally transfer gifts with each other. But employees gifting to supervisors is a big no.

That's primarily because employee gifting, in essence, is an instrument to amplify the message that an employee is a valuable asset to the company and the company is grateful for his excellent contribution. In a way, it's a pat on his back to motivate him to perform even better, as what gets rewarded gets repeated. And it's only appropriate that this kind of nudge should come from those who are the heads and brains of the company - seniors.

Similarly, a gift from a superior to a junior may be viewed as an act of encouragement. The opposite will be seen as a sycophancy - paving way to any perceived quid pro quo or the expectation of fulfilling some demand. Superiors, therefore, should be rewarded by their equals or their leaders.

2. Don’t give gifts when performance appraisal is around the corner

Timing is to the employee gifting what pulse is to human health: revealing. Presenting gifts to a few employees right before the annual performance review will send the wrong signal. However pure your intentions may be, it will reek of favoritism.

Also, if a senior executive anticipates a possible internal position vacancy for which he plans to apply, now is not the time where he should bestow the HR head with gifts.

3. Aim for absolute inclusion

The role of gifts in motivating employees and thereby achieving the peak of productivity is indisputable. But they are prime catalysts in building a culture of celebrating diversity and inculcating the culture of inclusiveness. The only way to achieve it is to make sure that no employee should feel left out, possibly getting gifts below their eye line.

That's why it's crucial to shun gifts that have sexual or religious overtones or make fun of a particular protected class. It should be completely free from any national or international political connotations. Unless and until it's for a celebration of a specific day, like women's day, stay away from gender-specific gifts.

According to Chapman & Co, along with the abovementioned diversities, the following diversities also exist in organizations:

Note that without a strong foundation of inclusion in your organization, employees from underrepresented/minority populations may be:

• Unable to perform at their topmost level
• Unhappy with their work responsibilities
• Thinking about leaving your company

4. Value the virtues by giftifying them

Festivals, special days, personal and professional achievements are ideally worthy of gifting. But you can send an unequivocal message across your organization that you value the virtuous behavior of your employees by allocating gifts for it.

This approach of respecting and celebrating morality first doesn't just raise the stature of your organization in your existing employees' eyes. Still, it can make your organization an aspirational place for other young and experienced employees available in the market.

Budgeting: Deciding how and how much to spend on employee gifting

Creating an ideal gift strategy is like walking on a hobbling tightrope. Simply because gifting doesn't have to make employees feel valuable and happy only- but it shouldn't strain the financial backbone of the company as well. This is achievable only by inserting well-planned line items into the proposal of gifting. Usually, it begins from budgeting, and it can indeed become a walk on a wobbling rope if you are a novice to the whole game of employee gifting. But we are here to simplify it for you.

There are two main verticals to employee gifting:

• Gifting employees occasionally throughout the year
• Gifting during the holidays

Since both scenarios are equally crucial for the goals that organizations try to achieve through employee gifting, they deserve significant consideration while finalizing the overall gifting budget.

It calls for a clear outline of a budget before going into any specifics. We have structured it to ensure that you will never go astray from the essentials.

1. Identify the needs of your organization first

The budgeting should begin by identifying which types of gifts and gifting will benefit your organization the most. Then comes the next point of consideration: What are the pain points that may stop you from implementing it. They can be as varied as HRs spending too much time managing gifts manually or having no idea what gets translated as ideal gifts.

According to SHRM, the ideal gifts are timely, developed by listening to employees, and strategically aligned to business outcomes. By contemplating these factors, you can determine what kind of employee gifting is right and how much you should invest in it.

2. Allocate the budget as earlier as possible

Once you have zeroed on the types of gifts and gifting methodology, you need to organize your expenses by finding the appropriate figure. SHRM recommends spending at least 1% of payroll on rewards and gifts. Next, you need to decide where to allocate your funds. Usually, gifting programs include these three costs:

• Cost of service awards
• Cost of peer-to-peer recognition
• Cost of manager-to-peer recognition

You need to specify what portions of your budget must go to each.

Assume that you wish to have a traditional approach to your employee gifting. In that case, we suggest allocating $100-200 per employee. Here is what the cost of gifts will look like for an individual employee.

We suggest you select a platform like Xoxoday that can adjust according to your budget. Stay away from platforms that ask you to determine your budget before you have figured it out properly and force you to purchase rewards points then and there only.

Remember: Platforms that can mold themselves as per your budget will put you an inch closer to your gifting goals.

3. Integrate multiple programs into one

As we have mentioned earlier, gift programs are a vital cog in your company’s cultural wheel. If it doesn’t spread out spaciously enough to touch upon various events, behaviors, and reasons for celebration, it becomes less meaningful and antithetical to gifting ideology.

The antidote to it is seamlessly integrating all the recognition and engagement programs you might be running—wellness programs, safety training, learning, and development programs—into one gifting program. It makes budgeting much more manageable, letting you gift your employees for different behaviors and occasions on a single platform.

4. Calculate the specifics

Now that the outline is done, the next step is to focus on the specifics, which include:

• Calculate the Number of Employees: Since the ultimate beneficiaries are employees, the key to acing the budget is to know how many people you actually are going to gift throughout the year. Along with the active staff, you need to factor in potential new hires and temporary employees that you will rope in for mission-critical projects.
• Estimate spending per person: The best way is to have a rough idea about how much you spent last year on employee gifts and how much you must spend in the current year. You can look thoroughly into the cost of your most popular gifts. Add an extra 10% or so as a buffer for increases in costs of goods and unexpected expenses. Once you arrive at one figure, multiply it by the number of people you want to gift.

Here is an example of special occasions like Diwali, Eid, Christmas, New year, New joinee initiations, and retirement gifts for senior employees.

• New joinee gifts can be in the range of INR 500 to 2000 ($6.67 to $26.68)
• Festive gifts could have a price range of INR 500 to 3000 ($6.67 to $40.03) as there are many gift options.
• Retirement gifts can be from INR 1000 to 3000 ($13.34 to $40.03), depending on the team member’s seniority.
• Holiday gifts, including a variety of travel, hobby, or food vouchers, can fall in the price range of INR 125 to 1795 ($1.67 to $23.95).

5. Form a budget for the entire company

After estimating the expense for a single employee, think about the entire office. Set aside funds for holiday gatherings, birthdays, and employee milestones. Put a firm price cap on them to cover decorations, food, entertainment, and other unavoidable factors.

6. Remember business gift deductions

Though business gifts represent expenses, they are helpful when tax time arrives. In America, those who spend $25 or less on each business gift and meet other qualifications can take the benefit of business deductions. It is advisable to factor in it in your budgeting tasks.

7. The 11th hour preparation

Just like over budgeting is terrible for your gifting prospects, so is under budgeting. A great, unexpected big sale closing may come out of the blue, or your employee may go beyond his written job description and display exemplary behavior that demands a thorough recognition. Under budgeting may leave you in a limbo where you have a clear-cut case to gift employees, but fund shortage stops you.

That's why it's advisable to have an extra 15% on top of your existing budget for pleasant yet unexpected events. It doesn't necessarily have to be costly. A gift voucher, prepaid card vouchers that give freedom of choice just fit in like gloves.

What employees actually think about gifts and what they want

Employee gifting is a deceptively simple act—up to the point that many have slipped over it. The numbers speak for themselves:

• 89% of people find organizing office collections for gifts difficult.
• 69% of people didn't like the gift given to them at the workplace.
• Half of Americans (49%) consider employers as bad gifters.
• 50% report that gifts from employers are underwhelming.
• 75% of office workers dread opening a gift in front of colleagues if they don't like their gift.

The side effect of a gift falling flat can be emotional for employees, but for employers and businesses, it means wasted time and money - directly impacting the bottom line.

It matters more this year where "The Great Resignation" is upon us with the turnover rate of 57% in 2021 and SHRM predicting a "turnover tsunami" when the pandemic ends, thoughtful gifting is an absolute must for businesses, and that automatically implies giving people the gifts they love the most.

The truth is, gifting is an enormous delightful opportunity for employers to 'wow' employees to motivate them and thereby retain them.

The key is to weed out the guesswork out of the equation to save time and resources, prevent returns, avoid supply chain mishaps, and make sure employees get what they value and desire. These pieces of nuggets, collected from various research resources, will aid you in that arduous task of weeding out.

1. Employees want gifts, but few believe in getting them

August research stated that about 50% of respondents believe it is important to be thanked for workplace accomplishments, contributions, work anniversaries, and achievements. Gen Z and millennial respondents value holiday gifts.

They are less likely to leave a job before the holiday season because they want their gift or reward, and 40% would quit a job post-holiday if they don’t receive a holiday gift.

2. Your bad gifting can have a lingering impact

There was a common theme among gifts that people reported receiving—lack of understanding of the employees, almost zero attention to detail, and lack of thoughtfulness.

People don’t want subscriptions to the clubs and services that don’t interest them. Some of the worst gifts respondents reported receiving included: expired candy, a coupon to a fast-food restaurant, and a portion of food that had gone bad.

3. Digital gifts should be delivered in a thoughtful mix

An August study of workplace composition2 found that 29% of respondents work virtually full-time and 28% work virtually part-time in a hybrid model. As the “back to work” situation is still a thing of uncertainty and employees are becoming more digital natives, digital gifts offer a better chance of reaching employees to let them use their gifts in the way they want.

Here’s the actual add-on: digital gifts help employers circumvent supply chain issues, a thing that mars physical gifts. The digital way will ensure that the right gifts reach the right employees at the right time without any serious hiccups.

Clearly, when estimates abound that U.S. companies will spend nearly $100 billion this year on gifts for employees and with the budget swelling all across the globe, the studies mentioned above can be used to pinpoint what tops employees’ wish lists. The following categories are not collected from mere cold numbers alone but real-life talks with the employees.

4. Charitable donations

While charitable giving might have tapered off, employees love to opt-in for donations in their honor 2x more frequently than pre-pandemic. Senior executives must find charitable causes that employees care about the most.

5. Experiential gifting

Though things-as-gifts have not lost their shine entirely, they shine a little less, particularly in today's world where all the objects and things aren't just increasingly ubiquitous but a click away. What still deserves the unique tag and thereby becomes desirable is the unforgettable experience.

According to the Wall Street Journal, experiences dwell long in the memory instead of objects or things.

The splendid gamut of experiences could include museum tickets, guided tours, resort stays, and wellness or fitness options. Keeping abreast with the times, companies can bring in virtual experiential gifts.

For instance, Taylor Paone of DailyPay gave her team an online mixology session. Participants received a custom gift box that included all the ingredients Paone's co-workers needed to participate.

3. Gift cards

The increased screen time and digital nativity have left an indelible mark on employees’ wish lists, including how they want to use their gifts. The rise of digital gift cards in the desirability quotient of employees is a case in point here.

According to this report, there is a 30% increase in prepaid and gift card orders as gifts used by employers, replacing traditional gifts. The following research findings are tell-tale signs of employees’ desire to lay their hands on gift cards:

• Research shows that employees prefer a gift card or prepaid card (43%) over traditional gifts like merchandise (1%), food (3%), travel (8%), and even a day off (14%) when it comes to receiving gifts from an employer.
• More virtual employees would rather have cash (31%) or a prepaid or gift card (20%) from their employer as opposed to a virtual holiday party (11%).
• 40% of employees anticipate gifts from their employer—and digital-friendly rewards are clear favorites.
• (65%) of employees have gift cards on the top of their wishlists.
• The Incentive Research Foundation (IRF) found a 26% increase in the use of gift cards in workplace incentive programs.
• Gift cards are the key motivators for employees and create feelings of being valued.

This likeability of employees towards digital cards isn’t surprising. They come with the inherent capacity to let people shop when they want and how they want (in-store, online, or via apps), along with a heart-warming personalization. Organizations can quickly achieve it by including names and custom card backgrounds for individual recipients.

Why and how to personalize employee gifting

Gifts are born inherently to show the receiver not just how much you value and respect them but how much you love them. Employee gifting, indeed, is no exception to this axiomatic truth.

Since love is nothing but a heightened feeling, the entire emotional construct of your employee gift will depend upon the depth of the emotion and how much love gets reflected from it. Like all other eras, this era is yet to find a better instrument than personalization to make a person feel special in a way unique to him alone.

Apart from the apparent feeling of personal touch, it mainly arises from two key factors:

1. Exhibition of exclusiveness

Implying a tailor-made approach to love, strengthened by keeping in mind the person and relation, personalization embodies sheer exclusiveness. Living in a world that exudes too much sameness, giving someone something that belongs exclusively to him bestows on him the pleasure of feeling that the sender especially remembered him.

2. Touch of thoughtfulness

In a ridiculously fast-paced world where people are inclined more towards comfort than effort, careful personalization is a powerful sign that you were in the sender's thoughts, and he took pains to understand you, your likes and dislikes to craft something for you. Can there be a more desirable feeling than being in someone’s thoughts?

You need to comprehend these points by considering that theoretically and conceptually, there is not much difference between personal gifting and employee gifting since both strive to convey the same message of love and appreciation. The only thing that separates them is the former is one-to-one buying while the latter is one-to-many.

It then rings with a resounding reason that employers must incorporate this personalization into their employee gifting - and what should nudge them towards it is that employees love personalized gifts up to an immeasurable extent.

The following numbers are just faint efforts to reach near that immeasurable:

• 62% of Americans want to receive a gift that comes from the heart and feels more personal. (Source: NY Post)
• About 52% of people feel that the giver puts a lot of thought into their gift if it’s personalized. (Source: Personal Creations)
• 39% of people feel happy when they give a personalized item as a gift to their loved ones. (Source: Etsy)
• 58% of people will tell other people about their gift if it’s personalized. (Source: NY Post)
• 55% of people keep personalized gifts a lot longer than traditional store-bought gifts. (Source: NY Post)

What forms the kernel of personalized employee gifting

This is a key question to consider, and the answers to it are many, which are highlighted below.

1. Knowledge of the recipient

• When the world is fast becoming a global village, your workplace is a melting pot of people from diverse backgrounds, regions, social milieu, and connotations - making them as varied as colors.
• Crafting a truly unique personalized gifting experience demands a thorough knowledge of your employees. And it generally means answering a couple of questions: Do you know their likes and dislikes? What are their hobbies, and what constitutes their idea of a good time? Do you know how they like to receive gifts?
• If your research fails to hand over any conclusive answers to you, ask. Maybe, they prefer gifts with some flamboyance, or perhaps, they are easy to please by just handing over a lovely gift.

2. Detailed enunciation of the contribution

• Personalized gifts for employees can prove a real morale booster and joy giver when they come with a sincere address of the individual's contribution.
• Writing the employee's name and calling it a day will arouse only a lukewarm feeling in the respective employee far away from the expected overwhelmedness.
• The first commandment here, then, is to inscribe the individual contribution of an employee. It can mean a unique trait like "For Outstanding Positivity"; or a particular mention: "Sales shark of the year."

3. Mention what an employee means to the company

• To further deepen the personalization, it’s advisable to be specific about how the particular employee has helped the company: increasing sales, building company culture, aiding teamwork, consistently finding ways of betterment, etc. This doesn’t have to be necessarily inscribed on your personalized employee gift.
• Make sure to add it verbally when you present it, or you can write it in a simple yet elegant hand-written note. This explicit mentioning shows precisely why the employee is valued, enhancing the speciality quotient of the gift.

Simple ideas to personalize employee gifts

Our experience tells us that the biggest challenge for employees isn’t picking up the right gifts for employees but personalizing them to make them enchanting.

It usually arises from not spending enough time with employees—the problem fermented further by the prevalent work from the home norm. If the employee is vocal and wears his heart on his sleeves, it’s easy to wow him by delivering a gift accordingly. Otherwise, it will demand some serious creative thinking on your part.

The following tips should get you in acing the art of giving personalized employee gifts:

• Search for inspiration: Contrary to many beliefs, personalizing a gift doesn't necessarily mean designing something entirely from scratch. Sites like Pinterest can be a mine for exclusive ideas on adding a touch of personalization to your gifting.
• Put a name or monogram: Though among the easiest and oldest personalization ideas, it still packs a punch. Everyone likes to see their names on gifts, whether physical or digital gifts cards.
• Find out their favorite color or themes: Digital gifts are sent via emails - and this can be a rich avenue for personalization. You can create an email template that incorporates employees' favorite colors or themes - Game of Thrones, Harry Potter, natural landscapes, certain video games are, to name a few.
• Take a leaf out of the past conversations: I clearly remember that I had mentioned my wish to have a Kindle at my disposal to continue my reading adventure without worrying about rising book costs and the constraint of space to store them. My HR and reporting manager remembered it, and when my second work anniversary came, the first official email that I received was that the Kindle had been gifted to me.

Gifts vs. Giveaways: Same objects, Different objective

Gifts and giveaways might involve the same act of giving and the same objects. But one differentiating factor between them is the motive. If the gifts are promotional—even though they abide by the same rules of traditional gifts—our mind considers them as “giveaways” and, ideally, should have no place in your employee gifting.

The following chart will make the difference between the two quickly scannable and crystal clear.

• Example of giveaways: A travel mug or notebook imprinted with your company logo and the fun logo font
• Example of gifts: A travel mug or notebook imprinted with your employee's name

When to send employee gifts: Nailing the right gifting occasion

Every employee has two halves of life: personal and professional. Each affects the other and is therefore unavoidable. Apart from the time that employees spend at home, a large chunk of their time is spent at work. Surprisingly, an average person spends 90,000 hours at work in their lifetime.

A healthy and performing employee is an outcome of the serenity of their personal and professional life. It hints unambiguously at the fact that the curation of a perfect and uplifting gifting strategy will hit a wall if it fails to have a holistic look at the life of employees.

Apart from festivals and critical days, gifting employees for their memorable moments in their personal and professional lives is the soul of an ideal gifting philosophy.

We will see what those occasions are by dividing them into multiple categories.

A. Universal gifting moments

Here are a few important ones to make a note of:

1. Festivals

Every country, regardless of its geographical location, is steeped in traditions. One of the prime drivers of this tradition is festivals. Barring the key and global festivals like Christmas, Diwali, and Eid, every region and country is full of local festivities, which carry enormous cultural and emotional significance to the employees.

For example, Cherry Blossom in Japan and Durga Puja in Bengal. Including them in your gifting calendar is of vital importance not just to make your gifting all-capacious but to make it more culturally inclusive.

List of main and secondary festivals:

• Diwali
• Eid
• Christmas
• Durga Puja
• Cherry Blossom

2. Key days

Most of your employees' lives are shaped by the people who have stood behind them in thin and thick. Certain days are accredited to celebrate these unsung heroes and pillars.

Usually, they can be mentioned in one breath: Father's Day, Mother's Day, Women's Day, Friendship Day, Daughter's day. Let your employees celebrate these special days with their beloved ones with gifts that gather a steady emotional pull.

List of key days:

• Father’s Day
• Mother’s Day
• Women’s Day
• Friendship Day
• Daughter’s day
• Singles Day in China
• New Year’s Eve

B. Milestones: Personal and Professional

The happiness of life is measured by special and glistening moments. They germinate in both the personal and professional life of an employee.

Since employee gifting has come into existence to make the employees happy, your meticulous planning of gifting should include all such events—from employees' marriage to their stunning performance that makes them the best employee of the year.

1. Personal moments

Since the minute details of employees reside in the database of organizations, it’s easy to identify key moments in the life of the employees where they feel special about themselves. You can automate a system to giftify those moments - birthdays, wedding anniversaries, work anniversaries, newborns, getting invited for prestigious events, or becoming a published author in respectable publications are prime candidates.

Personal milestones which every company should integrate in their employee rewards program.

2. Professional moments

Employees come to the office to work. They need to perform, add to the overall vision & mission, and match their pace with the revenue funnel of the organization. Employees come to the office to perform and thereby aid organizations in achieving their overall vision, mission, and revenue targets. For a virtual scribe, it could be the number of schedules settled for the quarter with satisfied patient feedback. Recognizing these achievements with gifts thus is vital

Here are some critical moments that companies can gift their employees:

• Specific annual awards
• Best sales award
• Best player in corporate game
• Best employee of the year
• An employee with the most customer recognition
• A best company value representative
• Customer service excellence awards
• innovation awards
• Best team collaboration instant