We have just released our annual report and it makes very interesting reading regarding corporate reward strategy in the depths of recession.
As has been widely reported in the media Ireland is going through a tsunami of a recession after almost 20 years of extraordinary growth. The crash has been spectacular due to a property bubble burst aligned with the worlds biggest banking crash. With unemployed reaching new highs of 14%, public sector wage cuts of 20%, massive tax increases and over 90% of the private sector implementing wage cuts, one would be forgiven for writing off the corporate reward industry.
You might have thought that any company trading in the retail and corporate reward space would be keeping its head down at annual results time - not so at the Gift Voucher Shop.
With our consumer gift card business proving to be recession positive with sales growth of 23%, its performance on the corporate reward space has been phenomenal, with corporate reward and recognition sales up 27% and its Bikes4work sales up 115%. What is going on!.
Michael Dawson, Group CEO explained. “The Irish corporate reward market has proved very resilient in the teeth of a severe recession in Ireland. Certainly staff layoffs and wage cuts have been a core response to falling demand, restricted availability of credit and the need to survive. However companies have had to implement alternative strategies to motivate retained staff. These staff who are now lower pay packets are expected work harder than ever to drive business forward and that is driving the growth of non cash based rewards. For the Gift Voucher Shop that has driven strong demand for our One4all gift card product as a staff reward product and our bikes4work voucher.”
And the results are to be seen. Irelands’ real economy is showing the signs of recovery driven by higher productivity particularly in the export sector with growth of 10% in 2010.
Irelands response to staff motivation in a tough commercial environment may give HR practitioners and the reward industry in the UK some food for thought.