If you manage employees in any capacity, then you know how critical–and how challenging–employee engagement can be.

Consider that employee turnover costs U.S. companies $1 trillion each year (yes, that’s ‘trillion’ with a ‘T’). Meanwhile, disengaged employees cost over $500 billion a year. 

Then consider studies that show that regular employee recognition efforts lead to a 41% increase in retention with 34% more engagement. 

Given these numbers, it’s clear that your question shouldn’t be ‘can we afford to implement an internal rewards and recognition program?’ It should be ‘can we afford not to?’ 

Thankfully, with the right tools and strategies in place, employee engagement can be simple and cost-effective. This is true whether you’re managing employees in a small company with a small budget, or looking to keep thousands of workers (even remote ones) happy and engaged. 

Keep reading to discover actionable tips to improve your employee engagement at different budget levels, ranging from small to large. 

How much should a company spend on employee engagement?

Giftbot - ThinkingBefore we explore how to optimize your budget for employee engagement, let’s briefly cover how much every company should be setting aside for employee engagement in the first place. 

Like you’d expect, there’s no simple answer here. The amount you should spend on employee engagement depends on a variety of factors, like company size, industry, budgets, and whether you have specific goals for engagement initiatives. 

That said, there are some general guidelines and best practices when determining an appropriate budget. 

First, many companies will allocate a certain percentage of their payroll budget to employee engagement–somewhere between 1% to 2% is often considered a good starting point. 

Another common approach is to budget on a ‘per employee’ basis, which can range anywhere from $100 to $1000. 

Of course, these numbers will vary from industry to industry, which is why it’s a good idea to research what similar companies in your sector spend. 

And it’s why it’s also a good idea to keep the focus on return on investment (ROI). 

Remember that employee engagement efforts should have specific goals, like higher productivity, lower turnover, or more customer satisfaction. 

So always keep your unique ROI in mind when determining your engagement budget, and then track results to see if your efforts are paying off as hoped.  

Flexible budgeting is good HR

Engagement needs can change over time. What works one year might not be as effective the next. 

HR professionals should therefore be prepared to adjust their spending based on feedback and the evolving needs of their workforce. Effective employee engagement surveys should be a part of this process.  

Digital rewards simplify the process

Giftbot - Idea croppedRegardless of your employee engagement budget, you’ll want the bulk of your spending to go to your employees themselves–and not to the software you’re using to manage them. 

That’s why more and more companies are choosing to engage and recognize their workers with digital rewards software. Digital gift cards can be sent immediately, so that employees are rewarded immediately (and without having to worry about gift wrap or mailing addresses). 

Plus, Giftbit’s flexible pricing lets you spend every cent of your budget on your program (and your employees!). 

This is how Factors Group, a Canadian company specializing in nutritional supplements and vitamins, streamlined their rewards and incentives program. 

“We like to provide rewards and incentives to our employees for many different reasons throughout the year. Previously we used physical gift cards, but it was cumbersome and time-consuming,” says Theresa Streifel, Supervisor of Reception & Administrative Services at Factors Group.

“Giftbit has given us the ability to administer digital gift rewards to all of our employees across Canada.”

Employee engagement for small budgets

First, if you’re working with a small budget, remember that rewards don’t have to be expensive to be effective. Even $5 to Starbucks can go a long way. 

That said, if there just isn’t room in the budget for a personalized employee recognition program, then you might want to consider a points-to-rewards program model instead. With this type of program, employees collect points over time, which they can eventually redeem for digital rewards. 

In this model, instead of automatic triggers for rewards, employees instead will earn points for different activities or accomplishments. This can be as simple as arriving on time (or maybe opting to come into the office for your hybrid employees), or as business-critical as meeting sales goals or getting reviews. 

Trying to also boost culture? Let employees pool their points, or reward them for collaboration activities (more on how to improve culture below). 

Letting employees reward each other with points is also a popular practice. When people say "thank you" with points, it builds stronger teams. 

With this model, you can spend as little as $50 a month on gift cards for the employees who collect enough points–all while engaging your employees and rewarding them, too.  

Then keep your costs low by also using incentives like extra paid time off (PTO), flexible work hours for a day, or even a prime parking spot. Get creative, give out just a few bigger rewards each month, and remember that even something as simply as public recognition can lead to a better workplace. 

Engagement vs culture

It’s easy to get lost in the weeds when it comes to employee engagement. Engagement and culture are two sides of the same coin, and things like work-life balance, training for career growth, wellness programs, and diversity initiatives all matter to both. 

In other words, fostering a workplace culture that values its employees is going to drive engagement. 

Remember, not all engagement efforts require significant financial investment. Fostering a positive work environment, recognizing employee achievements, and offering opportunities for professional growth can also enhance engagement without substantial costs.

Employee engagement strategies for medium-sized businesses

When you have a little more money to spend on employee engagement, you can start to scale up your recognition programs. And it’s critical that you do so: studies show that when SME organizations have a good reward management system, their employees are motivated and perform better. 

“The SME sector should develop a sound rewards management system for employees to boost their morale and motivation to get better results.”

-Faiza Manzoor et. al.

When you have more room in your budget, we often recommend an employee-of-the-month campaign (often in addition to the points-to-rewards system). 

Give the winning employee a more substantial reward, like a virtual prepaid Visa or MastercardⓇ, or a gift card to one of hundreds of top-brand options in our rewards catalog

Better still, let your employees pick which gift card they want;  full recipient choice will be a reward in itself.  

rewards catalogEmployee engagement for large budgets

Companies with larger budgets have much more flexibility when it comes to building out great employee engagement and recognition programs. 

Specifically, they can implement ongoing bulk rewards programs, with digital rewards automatically triggered when workers complete specific actions, meet specific targets, or reach specific milestones. Personal events like tenure anniversaries, birthdays, and retirement are some of the most common ‘triggers’ here. 

And don’t be afraid to get creative! Like we covered, offering the choice of hundreds of brands can be a reward in itself. 

But maybe you reward a top seller with a day off work and a night away, with an Airbnb gift card. Or you treat employees to their choice of restaurant on their birthdays, or to a spa and wellness day when they hit sales targets. 

You might also consider adding gift cards to your existing programs. For example, Giftbit options like Charity on Top and CharityChoice let you put money behind your existing employee volunteerism initiatives. 

Or maybe you have a formal mentoring program, and you make it easy for mentors to take their mentees out to lunch. 

Finally, don’t forget your hybrid and remote employees. If they can’t make it to your culture-boosting team lunches, for example, send them gift cards to delivery apps like DoorDash and UberEats, so they can still feel connected to the team. 

Options like gift cards to Home Depot, Best Buy, Pottery Barn, and Michaels can also help remote employees outfit a home office that’s just as engaging as your corporate one. 


Great product especially in a virtual world

A great option for staff appreciation. We typically gave in-person incentives to employees at various company events. This product allows to to recognize our staff virtually, customizing the experience for them. A great option for staff appreciation.

Kimberly B.
Office Manager

Take a hands off approach to employee engagement

Regardless of your budget or your approach to employee recognition, your rewards program won’t work if it’s haphazard. It needs to be incredibly easy to send and redeem rewards, or else they can become more trouble than they’re worth. 

That’s why it often makes sense to integrate your rewards program with API or Zapier triggers.

For example, when employees reach certain sales goals, the Zapier app can trigger a gift card link to their email. Meanwhile, bulk sending can let you send thousands of rewards in just a few clicks, saving hours (and hours) or time. 

Ultimately, employee rewards and recognition will work best when it’s built into your existing workflows, and when it’s easy (and automatic) to send. If you’re trying to optimize your employee engagement budget, chat with sales or watch a quick demo now to see if digital rewards are right for you.