An Employee Rewards & Recognition Study

HAPPY MILLENNIALS

METHODOLOGY 2

THE HAPPINESS RANKINGS 4

ARE EMPLOYEES ENGAGED? 5

THE RECOGNITION GAP 6

THE ELIGIBILITY GAP 7

RECOGNITION PREFERENCES 8

REWARD PREFERENCES 10

THE POWER OF REWARDS 12

TABLE OF CONTENTS

1

Ask an older manager what makes Millennials happy, and you might hear “a smartphone for each hand.” It’s true that younger employees are always connected and expect instant answers. In this study of Millennial happiness with employee rewards and recognition, there were some expected results, but a few surprises, too.

The most notable finding was that current employee rewards and recognition — a key component in growing employee happiness — are not aligned with what makes Millennial employees happy and more productive. All of the key employee expectations for happiness at work are being somewhat met, except one. Rewards and recognition lands at the bottom of their list.

This is the second in a four-part series on employee happiness. Like the first, this one begins by identifying what makes Millennials happy in general. There were both similarities and differences between younger and older generations of workers. Millennials put a greater emphasis on things that make them happy that are more reflective of their age group.

But both groups ranked “Job” in the bottom half; Millennials almost last. As work/life balance continues to exert its influence, Millennials are cheerfully content to rank Job behind Music, Food and Drink, and even Pets. Yet at the same time, 65% said Job is still important to their overall happiness. This suggests an unmet need. Work is still instrumental in the overall happiness balance, and making Millennials happier at work requires thoughtful, effective rewards.

There are a number of interesting findings from our study. Once motivational mainstays, all-expense-paid trips and tickets to sporting events have little appeal for Millennials. Instead, they want more immediate and consistent recognition for their contributions. Accustomed to attention and praise from their earliest days, Millennials expect regular affirmation. Already prepared to switch jobs earlier and more frequently than previous generations, employers need to take particular pains to maintain Millennial engagement, and do it with a personal touch.

If you’re an HR leader, we can create a custom report for you, using our nationally representative data for your specific industry and situation.

INTRODUCTION

Please reach out and let us know your questions and thoughts.Stay happy,

Rodney Mason GVP, Marketing Blackhawk Engagement Solutions Rodney.Mason@bhengagement.com

What Makes Millennials Happy? Affirmation

2

METHODOLOGY

Blackhawk Engagement Solutions conducted this national study in the spring of 2015 to identify the key components of employee happiness, and the particular role of reward and recognition programs in that happiness.

The results reflect the responses of 342 Millennial-age employees, representing the US workforce.

Numbers may not sum to 100 due to rounding.

GENDER

Female 55%

Male 45%

JOB TITLE

Owner 2%

Chief officer <1%

Director 1%

Manager 6%

Supervisor 5%

Foreman <1%

Sales rep 6%

Analyst 8%

Technician 5%

Operator 2%

General staff 14%

Coordinator/Specialist 10%

Executive assistant 1%

Administrative assistant 3%

Entry level 13%

Consultant 2%

Other 22%

INCOME

< $19,999 21%

$20–$49,999 39%

$50–$99,999 28%

$100–$199,999 8%

$200,000+ 4%

ETHNICITY

American Indian or Alaskan Native 1%

Asian or Pacific Islander 6%

Black or African American 13%

Hispanic or Latino 16%

White or Caucasian 57%

Prefer not to answer 7%

EDUCATION

Less than high school 1%

High school diploma 5%

Some college 25%

Vocational/Technical degree 2%

College graduate 49%

Graduate school 16%

COMPENSATION TYPE

Salaried 45%

Hourly 55%

Commission 5%

Tips/Gratuities 3%

AGE

18–22 14%

23–29 85%

3

METHODOLOGY

REGIONPacific 19%

Mountain 8%

West North Central 9%

West South Central 8%

East North Central 15%

East South Central 4%

South Atlantic 19%

Middle Atlantic 13%

New England 5%

OWN VS. RENT

Own 24%

Rent 76%

RELATIONSHIP STATUS

Married/Civil union 26%

Widowed/Divorced/Separated 3%

Living with significant other 18%

Never married 53%

4

Once mainstays of employee motivation, prime tickets to sporting events are at the bottom of the happiness ranking and do not serve as positive reinforcement for most Millennial employees.

THE HAPPINESS RANKINGS

Hobbies, Yes. Work, Not So Much.What makes Millennial employees happy? Family and friends; yes. Tickets to the game? No thanks. In the middle, single, young

employees have more interest in Hobby, Food & Drink, Community and Music, and less in Home and Job.

82% ranked Family as one of their top 3 factors

51% ranked Friends as one of their top 3 factors

41% ranked Hobby as one of their top 3 factors

Only 13% ranked Job as one of their top 3 factors

When asked to rank these key factors by how much they contribute to happiness, Millennial employees placed work deep in the bottom half.

1 FAMILY

FRIENDS

HOBBY

HEALTH

FOOD & DRINK

COMMUNITY

MUSIC

PETS

HOME

JOB

VACATION

SPORTS TEAM12

2

3

11

10

9

8

7

6

5

4

53% say their jobs make them feel happy compared to other important things in their lives

65% say their jobs are important to their overall happiness

5

Only 40% are happy with the rewards and recognition their company offers.

Rewards and recognition are at the very bottom in terms of how Millennial employees perceive their employers’ efforts to make them happy. Older employees aren’t too

happy in this category either, but Millennials have a particular sensitivity to recognition.

ARE EMPLOYEES ENGAGED?

Everything’s Great. Almost.You might expect Millennials to have a long list of what’s not measuring up in the workplace, yet the opposite is true.

They’re happy and focused at work — with one exception: rewards and recognition.

have a clear understanding of what’s expected of

them at work

91%

believe their boss seems to care about them

80%

have materials, equipment and training they need

to do their job

82%

have performance check-in every six months

73%

said their employer encourages their

development

78%

are happy in general with their job

53%

had opportunities to learn and grow this past year

83%

believe their colleagues are committed to quality work

77%

believe their opinion counts at work

73%

have received praise for their work in the last week

62%

get to do what they do best

75%

said the mission of their job makes them feel important

69%

have a best friend at work

72%

6

THE RECOGNITION GAP

More Opportunities, PleaseMillennials like reward programs, and would like a lot more of them.

Unfortunately, there are large gaps between what’s offered and what’s desired.

Programs employers offer Programs employees want

39% of employees say their employer does not offer any rewards or

recognition.

36%

52%

32%

50%

30%

48%

36%

6%

15%

51%

Bonus program

Employee recognition

Wellness rewards

Safety rewards

Spot rewards

7

If your employer offers a reward, how often are you eligible to participate in an employee program?

THE ELIGIBILITY GAP

Can I Join?Even when rewards and recognition are part of the company culture, sizeable portions of

the Millennial workforce aren’t always eligible to receive all the various types.

Once per year Once per quarter Once per month Ongoing Not eligible

BONUS 34% 13% 7% 13% 33%

RECOGNITION 11% 14% 13% 20% 43%

WELLNESS 17% 10% 8% 18% 48%

SPOT 5% 7% 6% 16% 67%

SAFETY 5% 6% 5% 4% 82%

SAFETY REWARDSare equally offered annually and

ongoing, but 82% of Millennials who receive rewards are ineligible for

safety rewards.

SPOT REWARDSare typically awarded on an ongoing basis, but 67% of

Millennials who receive rewards can’t receive spot rewards.

WELLNESS REWARDSare generally offered once per year or ongoing, but 48% of Millennials who receive some type of reward aren’t

eligible for wellness rewards.

BONUSESare typically rewarded annually, but 33% of Millennials who

receive some type of reward don’t receive a bonus.

EMPLOYEE RECOGNITION REWARDSare usually ongoing, but 43% of Millennials who receive some

type of reward don’t receive recognition rewards.

8

RECOGNITION PREFERENCES

Getting PersonalIt’s not an exaggeration to say that how employers give rewards is at least as important as the rewards

themselves, and especially for Millennials. They expect and respond to personal attention.

Ranking of recognition methods that make employees happiest.

If you were to receive special recognition, which type of accomplishment would you prefer to have recognized?

64% Personal

36% Team

1Personal

email from manager

2Personal email from company

executive

3Team email from manager or other company leader

4Company-wide announcement

on intranet

5Announcement on company’s social media

6Personal email,

intranet and social media post

How does your employer formally announce employee recognition for outstanding achievements?

42% Manager announces to individual

40% Company-wide announcement

29% Peer-to-peer announcement

27% None

6% Public announcement outside of company

9

RECOGNITION PREFERENCES

You Like Me!At a stage of their careers where any notice by the C-suite is at a premium,

Milllennials place a higher value on recognition by higher-ups than older workers.

How happy would you feel for receiving rewards and recognition for these job activities?

84% Exceeding personal performance levels

80% Receiving a promotion

79% Exceeding team performance levels

71% Achieving milestone for years of service

60% Participating in community service

57% Achieving milestones in a company program

Which type of recognition awareness makes you happiest?

66% Managers at company aware of my recognition

62% Executives at company aware of my recognition

44% Peers and teammates aware of my recognition

21% People outside of my company aware of my recognition

10

You’ve earned an employee reward worth $100. Which type of reward would you prefer?

REWARD PREFERENCES

Right Here, Right NowMillennials take vast choice and instant gratification for granted, making reward selection very convenient for employers.

Prepaid cards meet both needs, and are overwhelmingly preferred.

Prepaid card

Reward that can be redeemed online from

select participants

Credit for catalog to choose your reward

91%

8%

1%

88%

10%

2%

You’ve earned an employee reward worth $25. Which type of reward would you prefer?

65% are happier to receive a reward for

doing a great job vs. giving one

Which type of peer-to-peer recognition do you think would make your coworker happiest?

30% Prepaid card

27% Personal email from you

15% Personal email from their manager

12% Gift card from a popular retailer

10% Announcement on company intranet or social media

6% Company-branded item

11

32% Spend it on regular household expenses

28% Save it for a rainy day

25% Unique experience (vacation, fancy meal, etc.)

16% Splurge on gifts

In our overall study, older employees opt for the flexibility of a $500 prepaid card, while Millennials, still in the middle of creating life experiences, prefer a vacation.

You’re being honored for many years of service on the job. Which form of recognition would make you happiest?

REWARD PREFERENCES

48% Four-day, all-inclusive vacation

38% $500 prepaid card

7% $1,000 in merchandise credit for catalog

4% Formal recognition among peers and company

3% $500 gift card for online gift

What would you do with a substantial reward from your company?

Instant (and Non-Instant) Gratification60% of Millennials would use a large reward for practical,

everyday things, just like their older counterparts.

12

THE POWER OF REWARDS

Little Rewards, Large ResultsIncentives work; even little ones. Millennials respond to comparatively

small rewards that can deliver disproportionately large results.

When participation in

a wellness program is required, less than 3 of 10

employees are happy to join a program.

When rewards are offered, the happiness quotient

almost triples.

83% of employees would be happy to participate in quarterly safety awareness training with a $25 reward for completing each component

77% would be happy to complete after-hours training for a $25 reward

75% would be happy to adhere to all safety and accident prevention procedures for a year-end $100 reward

67% would be happy to participate in a wellness program for a $25 reward

62% would be happy enough to stay another year on the job for three $50 spot rewards

57% would be happy to use three or fewer sick days out of a possible six, for a $50 reward

44% would be happy to recruit a candidate for an open position with the company for a $100 reward

Percentage who would be happy to participate in a wellness program when:

80% Incentives and rewards are offered for achieving individual goals

60% Free onsite facilities and training staff are available

27% Participation is mandated

20% There’s broad participation and encouragement by peers

13% There’s company-wide recognition for achieving personal goals

©2015 Blackhawk Engagement Solutions, Inc. All rights reserved.

Blackhawk Engagement Solutions is a leading global provider of customized incentive and engagement solutions for consumer promotions, employee rewards and recognition, and indirect sales channel management programs. Blackhawk Engagement Solutions is a strategic partner with many of the world’s leading brands and a thought leader that provides game-changing engagement solutions. Through innovative products, services and technology, Blackhawk Engagement Solutions inspires actions that impact results.

Blackhawk Engagement Solutions, headquartered in Lewisville, Texas, is a division of Blackhawk Network.

bhengagement.com

Rodney Mason GVP, Marketing Rodney.Mason@bhengagement.com 972.538.7336