Ask Madison: Should I expand my rewards and recognition program to include contractors?

June 26, 2020
| ByDan Davenport

Changing the Traditional Rewards and Recognition Program

The workforce is evolving and the structure of the employee population in many organizations may very likely be dramatically shifting. As we witness the rise in remote workers, we are also experiencing a change in the classification of workers that are being hired, beyond the permanent, full-time employee. According to the latest Upwork Future Workforce report, “73% of hiring managers are continuing or increasing their hiring of independent professionals” (freelancers, contract and contingent employees, gig workers, etc.). This trend is also being accelerated as a result of the COVID-19 health crisis.

The rise in freelance and contract workers over the last decade is indisputable. As it stands in the US alone, there are 57 million freelance workers, up from 53 million just 5 years ago. And it seems to be a work choice here to stay, with 51 percent of those surveyed saying that a return to a traditional work lifestyle is not an option. It’s also particularly generationally driven as well, with over 43 percent of freelancers categorized as millennials and 50 percent being GenZ. Couple that with the expectations of employee engagement and recognition by those generational workers poised to be the workforce majority over the next decade, adjusting your employee rewards and recommendation model might very well be the best course of action. In fact, with 48 percent of younger generation managers at director level or higher already as well as showing an affinity towards working with freelancers on a more regular basis, R&R programs are already changing.

To the extent that you can extend your program beyond your permanent, full-time employees, we contend that if you can structure your budget and program to include part-time, contract, seasonal and freelance workers, the more the merrier! Rewards and recognition programs are inherently designed to generate goodwill, positive engagement, high morale, brand loyalty and incentive to do good work. If that is the type of culture an organization strives for, then extending those efforts to everyone who contributes makes good business sense.

Rewards and recognition programs are already “non-traditional” in some instances

Rewards and recognition programs can really operate with a broad scope and have evolved and are far more sophisticated than simply providing certificates for a job-well-done. Organizations not only establish comprehensive R&R programs to reward their everyday employees for milestones and achievements, but they also extend them to create incentive programs for sales vendors, distributors, vendors and more, all third-party relationships. These third-party professionals are conducting business for and generating revenue on behalf of the partner organization. While they may not be traditional hires, they are nonetheless working to contribute to the overall success of the organization; recognizing and rewarding their efforts only stands to bolster and strengthen the partnership.

If you apply this same concept, and include non-traditional workers operating within your organization as part of your R&R program, you are essentially fulfilling a mission to be a great place to work by enhancing company culture as well as augmenting your recruiting, hiring and retention strategies. Studies show that candidates historically consider the feedback of employees who have first-hand knowledge to share about an organization and what it is like to work there; the feedback isn’t necessarily distinguished by whether the employee is a full-time employee or one that is on a contract-basis. They are providing details about how they were treated – and a company that shows inclusivity to anyone who is “on their books” regardless of worker classification will most likely fare better in its reputation.

Related read: Why companies should stay connected with ex-employees

Showing Appreciation is the Right Thing to Do for a Job Well Done

Strategies and statistics aside – what do you have to lose? With a comprehensive R&R program that includes all worker classifications, you build trust and a positive company experience. Conversely speaking, one might suggest that budgeting money for someone who may not be part of your organization in a few months does not make fiscal sense. However, at the rate that freelance work is growing, you very well could be working with the same freelancers on a repeat basis, as well as through long-term contracts. Their influence on job-seekers, and even your customer base, could have a very positive, or negative effect, depending on how they feel they were treated. Despite the ramifications of having negative feedback, saying thank you, showing appreciation and rewarding effort is just good practice in business, and life.

If you look at your employee R&R program as part and parcel of an overall strategy to do good work that leads to profitability, extending it makes senses by the numbers and the cultural benefits. An employee, regardless of classification, is brought onto a team to enhance the output, leading to organizational success. Rewarding and recognizing them for their efforts could be budgeted accordingly, but would generate far more return in creating an organization that is people-focused and driven by talented hires who will be eager to be part of your mission when you call upon them.

At Madison, it’s not business as usual, but instead, we are focused on support. Supporting our invaluable customers by maintaining business continuity, sharing advice about new working models and providing an opportunity to connect with others. 

While you adjust to your new working routine – whether it be at home or part of an essential service - please join the conversation. Ask Madison is an opportunity to share ideas, ask questions and help create our ‘new normal’, together. We believe that employee recognition is an essential business function and that, now more than ever, it is our responsibility to celebrate each other, recognize every milestone and collaborate together—even though we may be sitting apart.

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