Archive for the 'wellness programs' Category
According to First Data research, store specific gift cards are more popular than credit card-branded gift cards for incentive programs.
The “Prepaid Business Incentive Report” showed that over 37% all incentive budgets are used for some type of gift card, a large percent considering the numbers of incentive categories there are. It also mentioned many other types of incentives such as service award merchandise and travel only made up budget shares in the single digits.
This is truly surprising growth; less than twenty-five years ago gift cards didn’t even make up 1% of incentive budgets. Traditional merchandise incentive suppliers have painstakingly attempted to quash this growth of gift cards with all manners of negative selling but to no avail. For every 100 sales reps calling on American corporations trying to sell them incentives, there is only about one selling gift card systems.
The respondents of the survey were companies employing over 100 individuals and represented industries as disparate as manufacturing, government, retail and communications. Of the 37% of budgets using cards, 20% were single merchant cards and 14% were network branded open loop cards such as Visa and American Express, and 3% was paper gift certificates. The balance of the budgets was made up of 6% in merchandise, 4% to points based programs, 3% to travel, and 14% to plaques, pins and logoed apparel. Cash and cash like awards made up the rest with approx. 36%. At one time cash was in excess of 60% of all incentive budgets, maybe more.
The reason companies prefer closed loop merchant gift cards vs. bank credit cards was attributed to a variety of factors. These include employee preference (38%) followed by physical proximity and past ordering history. When purchasing large quantities of certain merchant gift cards, the company can receive a volume discount, but it is administratively and financially difficult to source several cards like this. In addition they lose the advantage of having a gift card system that offers hundreds of different cards giving the employees a great choice. One disadvantage of using open ended bank type gift cards is the fee. As most gift card denominations used in these types of incentive programs are $25 and some $50, these fees can represent as much as 15-20 additional cost over the face amount of the card.
The most common reason for using gift cards as employee awards were employee recognition (which includes safety awards) at 48%; service anniversary awards at 36%; year-end holidays 32% and employee health and wellness goals at 12%.
As the cost of wellness escalates and the uncertainties of the high costs of the Affordable Care Act abound, businesses are taking a closer look at financial disincentives when looking for ways to cut cost.
While incentives in wellness programs continue to rise, disincentives seem to be a new trend. According to a recent survey released by an Aon Hewitt only 5% of responding employers currently use disincentives, but 53% say they plan to begin using them in three to five years. So what does this mean, what works and how will this negative motivation work out?
Wellness incentives have grown quickly, from 19% of employers with 500 or more employees in 2006, to 83% of the respondents of the AON research today representing almost 800 employers and more than 7 million employees. They have quadrupled in size because they have proven results.
We in the incentive industry have always obviously been a proponent of using the carrot rather than the sticks. From a behavioral standpoint, we have seen time and again that positive consequences will produce better results than negative ones.
If you are going to use disincentives, many consultants believe that the timing of when to introduce them is critical, that it should only be used after your wellness program has been in place for at least a couple years and the employees have had a chance to become acclimated and well on their way in their wellness pursuits. At that point the disincentive can be used to nudge them along. Of course you can always find unique cases where disincentives can be helpful, but it is also a cultural issue for many companies and goes against their company philosophy. They don’t want to say “if you don’t do this we won’t pay your claim.”
Some companies have tried both incentives and disincentives and found that numbers showed that the programs with incentives outperformed the ones with disincentives.
The most prevalent types of disincentives tend to be surcharges on those who smoke or have BMI’s that are far out of the normal ranges. But those that implement the disincentive warn that you shouldn’t jump into one without a great deal of thought, research and planning. Research shows a majority of health care costs are incurred for dependents and that spouses can cost more for the employers than the employee. When you have disincentives in place one wonders just how much strife this can cause within the family.
So what will the future bring? Your guess is as good as ours, but we know through experience that employers can get a low of 6-10% and a high of 18-20% increase in engagement with incentives. We know that non-cash awards tied directly and separately implemented to the activity can be very effective. In addition having an incentive to reduce a premium increase to zero or below can also be effective. And a combination of these two types of activity, one short and the other long can be a powerful way to reduce costs.
From our perspective, we think the positive reinforcement of a properly planned incentive program will outweigh disincentives in the long run. Incentives have been successful in achieving many other corporate objectives, and we have no reason to think that will change.
In a recent newsletter, World at Work, the Total Rewards Association, discussed some interesting results of a national survey of employer views on the use of employee health incentives. The research was conducted by the Midwest Business Group on Health in April of 2013. Highlights of the findings are as follows:
- 82% of the companies had some form of incentives or disincentive s in place
- There is a growing interest in outcomes-based incentives (achieving targeted biometric goals)
- Most employers determined that incentives were necessary to get employees to participate
“Our national survey found over 80% of responding employers are using some form of incentives, with 41% using or planning to use outcomes-based incentive to increase engagement and participation in employer-sponsored programs.” Larry Bores President MBGH
- 13% of employers responded that they are currently using outcome-based incentives, 28% are planning to launch them over the next two years and 40% indicated they were studying the issue.
- Of those currently implementing programs, 54% tie incentives to both outcomes-based measures as well as incremental improvement to the outcomes
- 94% of employers used onsite screening to capture biometrics and that employee feedback was overwhelmingly positive
- Of the 18% who did not use incentives, 53% reported it was because it was not a part of their culture, and 47% were not sure it worked.
- The main incentive awards used were reduced premiums at 62%, gift cards at 38% and some type of program merchandise at 35%.
- Employers using disincentives increased the employee share of premium for non-compliance and 14% have higher plan deductibles or out of pocket fees.
- The most incented activities were biometric screenings at 70% and risk assessments at 78%
- The greatest disincentive at 78% was for tobacco use
- 71% of the employers said their incentive programs were very successful and 45% the disincentive strategy was “very successful” or “successful.”
Weight loss is always a key ingredient of any wellness program as it is one of the health problems that effect so many diseases, including high blood pressure, high cholesterol, heart disease and diabetes. If we could better manage weight loss we would have a head start on managing our overall health.
But as been noted by psychologists, the managing of weight loss is often more of a behavioral issue than a physical one. Granted, there reasons medical reasons for weight gain, but it is also clear that the choices people make in their everyday lives that have a great effect on weight gain. Often, the knowledge of what and what not to eat and how much is a good way to start people on the road to weight loss.
Corporations are engaged in many ways to influence their employees to gain interest and action on weight loss. As mentioned in the article from Corporate Wellness, a good way to start an engagement on weight loss is to sponsor a Nutrition Fair. Some ideas fun things to do might include:
Nutritional Menus…teams bring prepared foods for competition with a nutritionist as the judge. The foods are examined based health considerations and taste, after which a cookbook of recipes can be distributed to the employees and winning teams receive a prize.
“Control Cholesterol Club”…individuals are invited to voluntarily join and get a screening and are then given a variety of help such as the Gordian Health Solution management program. They can receive a simple award for joining, and then an incentive to continue the process and achieving the desired goals.
“Label Reading Contest”…choose specific foods or food category each week. Employees search out and find the products in the category with the highest and lowest fat (or sugar, salt, etc) content in the supermarket. Awards are given for the ones who find the highest and lowest products
“Healthy Food Samples”…provide food samples based on label information and compare to less healthy options
“Coffee Taste Test”…have decaf and caffeinated coffee available and have a taste test to determine which is which. Winners enter a drawing for a prize
“Healthy Desert Bake Off”…taste test and voting on the offerings provided, with 1st, 2nd, and 3rd place winners
“Vegetable Dish Taste Test”…same as Desert Bake Off with winners for the best recipes, or have a guess the veggies used in the recipe
The Award of Choice is a terrific way to award for any of the various games and contests mentioned. It is an inexpensive and fun way to support the overall wellness effort, It is a low cost but effective way to reinforce the folks who take part in these efforts.
Award giving can be a difficult business. Tastes change, trends fade and what someone may have wanted a couple of weeks ago isn’t what they want today. We all face the same situation when it comes to selecting awards for incentive programs, and for many of us the best conclusion in these fast moving times – let them get what they want!
The gift card has been a godsend for anyone who can’t pick out the perfect thing that someone wants. And they’ve grown in popularity faster than anything else in the retail world. In 2004 we spent $20 billion in gift cards. Last year we spent over 4 times that. Gift cards have gone from being considered impersonal gifts to being the most thoughtful gift of all. The gift card is a sign of the times – tastes change quickly, options should remain open, and you never know what you’ll spot something you just can’t live without!
Why the huge increase in demand for gift cards? Simple. Not only does it let someone buy what they really wanted (but were maybe too polite to say), it also lets them get it at the best price possible. They can wait until the sales, they can take advantage of special offers and maximize that gift. But there’s still a problem – what gift card to give?
You can try and pick the specific store they want to go to, but more often than not they might want to go somewhere else or they don’t get the chance to visit for some time. And those gift cards sit on dressers, or in the back of wallets until they’re forgotten. There is the universal Visa or American Express card, but with those you have hidden fees, fine print and expiration dates. Not the mention the many problems some purchasers have had with these types of cards.
That’s where we come in. The Award of Choice is the ultimate in flexibility when it comes to award programs. It can be redeemed when the time is right, for cards from hundreds of your favorite retailers, hotels, theatres and restaurants. And best of all the certificate will never, ever, expire, so they can take as long as they like to choose where to spend their gift. All this choice, and you can create it right from your computer, customized for your special someone.
We think this is the ultimate award, we know it’s something we’d like to get for every occasion and we hope you feel the same way.