“Employee discount rewards programs like these are more than just superficial perks. They’re your way of showing your employees how much you value the hard work they do for you. They demonstrate that you’re willing to go the extra mile for their happiness and well-being.” – Patrick Morrison, CharlieHR.
With inflation on the rise and the cost of living growing faster than the value of wage increases, employers must look for ways to attract new employees and support current ones. Offering employee discounts is a smart strategy for retail businesses looking to enhance their workforce’s satisfaction and loyalty. This article outlines six compelling reasons why providing staff discounts can benefit employers and employees. From improving recruitment efforts to employee morale and reducing internal theft, the benefits are clear and substantial. Discover how a well-implemented discount program can form an integral part of a successful retail operation.
What is an Employee Discount Program?
This simple answer is, employee discounts are an employer benefit in the form of a discount given on the original price of products or services by the company to their employees.
Providing employees with access to employer discounts allows them to save money on regular purchases.
Types of Employee Discounts
Several types of employee discounts are available to meet different needs and preferences. Common types of employee discounts include:
Retail Product Discounts
Employees can enjoy reduced prices on products the company sells or products from business partners. Products can range from electronics discounts to food, clothing, and personal care products.
Service Discounts
Service discounts offer employees special prices on a wide range of services, including gyms, spas, transport, telecommunications, insurance, and legal assistance.
Travel and Entertainment Discounts
This category includes discounts on airline tickets, hotels, car rentals, theme parks, concerts, cinemas, sporting events, and other leisure activities.
Discounts on Education and Professional Development
Some companies offer discounts or reimbursements for pursuing continuing educational programs, online courses, attending workshops, and other resources aimed at employees’ professional and personal growth.
Financial benefits
In Addition to direct discounts, some companies offer financial benefits, such as retirement savings plans, loans at reduced interest rates, free financial advice, and company stock purchase programs.
“Employee discount schemes become part of employees’ monthly budgets over time. That means that they’ll be reluctant to find a new job and give up those savings when they can’t get the same discount elsewhere.” – Perkbox.
Why Should Retail Employers Offer Discounts to Employees?
The main reason to provide a staff discount program is so that employees can take advantage of savings on everyday purchases. Moreover, implementing a staff discount program also provides numerous other benefits.
Here are six important reasons for giving employee discounts:
Reason# 1: Improve Employee Retention
Employee discounts make employees feel valued and appreciated, which increases their loyalty to the company. Loyal employees are more likely to stay with the company for the long term, improving employee retention and reducing the costs associated with hiring and training new staff.
Example: Costco offers its employees discounts on merchandise and services. This helps retain staff and facilitates a workplace culture of belonging.
Reason# 2: Increase Employee Satisfaction and Morale
Staff discounts boost employee morale by providing financial relief for products they need or want. Offering employee discounts as a benefit makes the workplace more appealing to new and existing staff.
When employees are happy, they are more productive and positive in their interactions with customers, which can improve the customer experience and increase sales.
Example: Target provides team members a 10% discount on all items and an additional 20% off wellness products, enhancing employee satisfaction and encouraging healthier lifestyle choices.
Reason# 3: Support Recruitment Efforts
In a competitive job market, offering employee discounts can give a retailer an edge over other employers that do not provide such benefits.
Company discounts are an attractive employee benefit for potential hires. They can often be a deciding incentive for candidates choosing between job offers.
Providing such benefits is crucial for attracting and retaining skilled employees who can drive the company’s success.
Example: Home Depot offers several financial and health-related perks, including discounts, which help attract and retain skilled workers.
Reason# 4: Create Brand Ambassadors
Employees who receive discounts become brand ambassadors outside of the workplace. Brand ambassadors are loyal customers who purchase products from their employer and recommend these products to friends and family.
In sum, staff discounts provide retailers with a cost-effective opportunity to increase word-of-mouth marketing, expand the brand’s customer base, and boost sales.
Example: Best Buy provides employees with discounts, turning their knowledgeable staff into promoters of their products. These promoters then help customers make informed purchasing decisions based on personal experience.
Reason# 5: Cost-Effective Employee Benefit
Offering discounts is a relatively low-cost alternative for the business relative to other employee benefits such as pay raises or comprehensive health insurance. Even so, staff discounts hold high perceived value among employees.
Thus, employee discounts provide a cost-effective HR strategy for enhancing the staff benefits package without substantially increasing company expenses.
Example: Gap Inc. offers generous staff discounts across all its brands, a cost-effective way to enhance its benefits package while encouraging employees to purchase its products.
Reason# 6: Reduce Employee Theft
Offering employee discounts can reduce the temptation for employee theft, which is a significant cost for retailers:
- The average retail theft case costs $1,380 due to dishonest employees. (Source: Jack L. Hayes International, Inc)
- Only 6% of retail theft losses are recovered. (Source: Jack L. Hayes International, Inc.)
- Organizations report a shrink rate average of 1.62%. (Source: NRF)
- 44% of retailers allocate more of their budget towards loss prevention. (Source: NRF)
When employees can purchase goods at a reduced price, the incentive to steal decreases. This approach minimizes losses due to internal theft and creates a more trustworthy environment, which is essential for a healthy workplace culture.
A discount program is a preventative measure that makes employees feel financially supported by their employer.
Example: Sephora provides substantial employee discounts that encourage staff to buy products legally, decrease the likelihood of theft, and promote a more secure and positive work environment.
“The advantages of offering a work discount program extend beyond helping staff save some cash; access to these deals is an integral part of an employer’s total rewards strategy and can help them increase employee satisfaction and retention.” – ExtensisHR.
Final Comments
As demonstrate in this article, workplace discount programs can significantly improve employee retention, satisfaction, and recruitment efforts while mitigating employee theft. The tangible and intangible benefits clearly demonstrate that investing in employee discounts is a cost-effective HR strategy that yields substantial returns. Retailers should act now to integrate an effective employee discount program and witness the positive transformation in your workforce and bottom line.
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