2014 Forecast: Voucher Schemes

Three experts give Reward their views on the prospects for the year ahead in voucher scheme.

18 December 2013
Helen Swire

2013 has been a successful year for the gifting and voucher sector. As other areas of employee benefits prove complicated or expensive for smaller businesses, the gift card and voucher market has seen solid growth.

 

Despite reports that companies are still failing to invest in Christmas reward, the sector has provided some answers for employers seeking to create a more personal feel to their workplace and offer unique benefits.

 

So what can we expect to see from voucher schemes in 2014? The sector is likely to continue to grow and expand – moving further into digital gifting and online incentive and recognition platforms, as employers seek easier, admin-free methods of transmitting reward.

 

While companies continue to make savings through non-cash incentives, personalised gift cards and vouchers will also see growing popularity as employers look to make reward unique to their staff – realising the value placed on a personal ‘thank you’.

 

Reward asked three experts in the gift card and voucher market for their opinions on the upcoming trends for the New Year:

Andrew Johnson, director general of the UK Gift Card & Voucher Association: “Over 2013 we’ve seen digital gifting rise to a new level of popularity that would have been unprecedented a year earlier. In 2014 we expect this trend to continue apace, not just in terms of the number of companies that provide a digital offering, but in the compatibility and complexity of the products offered. In 2013 it became common for retailers to offer a digital gifting product to the corporate market, but in 2014 the digital offering will become integrated with conventional gift cards and vouchers so that cards bought online can be redeemed in-store, and vice versa.

2014 will also see the expansion of the gift card and voucher market as a whole. Historically the market has been dominated by retailers, but it is now expanding quickly to encompass other sectors, such as restaurants and “experiences” – gifts that tend to lend themselves particularly well to the corporate gifting market.

As we enter the New Year and as the UK emerges from the downturn, we will see an impact on the corporate gift card and voucher market. The comparative financial freedom enjoyed by businesses will improve and many will find themselves able to reward and incentivise their staff more freely. This opening up of the labour market will also increase the need for companies to invest in their staff loyalty by rewarding and motivating their key employees.”

Iain McMath, CEO of Sodexo Benefits & Rewards Services: “2013 has witnessed the growth of personalised corporate gifting; employees are beginning to have a voice when it comes to the employee benefits that they want, and we are slowly seeing employers taking heed of this by offering a more diverse range of benefits.

Employers now understand that employees aren’t all the same, and that there can no longer be a ‘one size fits all’ approach to corporate gifting. Moving into 2014, we expect products like incentive and recognition platforms to continue growing in importance for HR departments as e-gifting becomes increasingly popular amongst employees. We also expect multi-choice gift vouchers – which can be spent in a large number of stores – to remain popular as employers seek to give the gift of choice when motivating and rewarding their workforce.

In addition, salary sacrifice schemes will continue to be vital to many UK workers and, with continued discussions within government as to how the childcare voucher scheme will be offered post-2015, we expect an influx of new employees signing up to the current scheme during 2014 before any changes come into play.”

Declan Byrne, managing director of One4all UK : “I believe there will be a couple of very strong trends in the staff reward space in 2014. Firstly I think companies will look for ways in which they can provide benefits to their staff that are low in cost but provide high perceived value. Products such as the One4all Employee Christmas Club for example, which enables staff to save for Christmas through salary deduction and has the added uplift of a 4% spending bonus, which companies can provide at no cost to the business.

I also think companies will continue the trend towards using non cash incentives to keep permanent payroll costs in check, as they seek to deliver higher productivity, while keeping fixed costs tight. Gift Cards will continue to prove a very popular bridge between cash rewards in pay packets and going down the catalogue goods route. In 2013 we saw this develop significantly, with B2B sales of gift cards out stripping consumer sales growth by a factor of five.”

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