Even small reward spend variances can accumulate considerable budget surpluses by this time of the year - like the 38% of our 1000+ clients in 2018.
For instance, a global management consulting firm had stockpiled an HR budget of USD 50000 by December 2018. They incorporated special end-of-year long service awards and reward points, that helped utilise this balance and recognise all their employees with 20+ years of experience. These points were utilised by their very thankful and exhilarated employees on exorbitant dream vacations and once-in-a-lifetime trips.
A global insurance client disbursed an amount of USD 150,000 as unplanned bonus points to their local sales affiliates and similarly, a leading delivery and food delivery company disbursed USD 250,000 as gift vouchers for their logistics workforce - all to clear off their annual HR budgets.
From the perspective of Human Resource management, such unused budgets carry a heavy opportunity cost. This cost is of the potential efficiencies that could have been achieved through an engaged and motivated workforce. This is particularly important in today’s business ecosystem when an engaged workforce is time and again evaluated as a great competitive differentiation.
Coming down to the details of using up a budget, the first step is to reconcile the accumulated balance. Spending the last penny of these unused budgets avoids contraction of the next year’s employee engagement budget. In other words, if USD 300000 was budgeted for employee engagement for 2019 and USD 50000 was not utilised, the budget for 2020 will only allocate Rs. 25 lakhs + standard growth in budget, instead of Rs. 30 lakhs + standard growth. Such a burn to the engagement budget comes in way of building a robust work culture and environment.
A platform like Xoxoday Plum is the right channel to invest these budget balances in. Plum is a digital rewards platform that helps simplify rewards, recognition and incentive programs. It is API driven and can easily integrate with the rest of the information systems in the organisation. This platform can be used to reward employees with points that can be used on an extensive catalogue of 5000+ experiences, 1000+ gift cards and 10,000+ perks.
Plum also conducts automated quarterly and annual checks on the reward budget utilisation to avoid such a last-minute spend requirement. For instance, it helps scores of our clients to identify such utilization gaps and unexplored reward buckets.
To allocate reward points, a company needs to recharge their balance with the amount budgeted for the rewards program - which is achieved over a couple of minutes. Loading up the reward points in the platform shifts the entire unused cash to a points reservatory.
Though this expense will be accounted for 2019, these points can even be spent for 2020 - since the budget is technically, already ‘utilised’. This helps companies optimize the budget allocation of the next year and ensures that the previous one was put to optimal use - a win-win for the impending and forthcoming Human Resource Strategies.