Workplace demographics across the globe are undergoing drastic changes with the percentage of millennial workforce increasing rapidly. Studies have estimated that by 2025, millennials will account for roughly three-fourth  of the total workforce. Understanding their preferences and knowing what clicks with their generation will therefore play a key role in an employer’s ability to retain and attract talented millennials. The millennials need constant recognition, regular feedback, open and authentic work environment. At the workplace millennials have shown a preference for experiences over materialistic rewards. 

Statistics show that three out of four millennials would pick an experience over something that was desirable. And an international survey of CEOs indicated that 65 per cent  of corporates were actively looking at non-financial rewards to enhance employee retention and engagement. The most effective rewards are a combination of travel and experiences that satisfy their aspirations both intrinsically and extrinsically. For example when a millennial has an intrinsic motivation towards CSR initiatives, organisations can tap into this motivation by offering rewards in the same area. 

So what makes experiential rewards tick for the millennials and what makes it the ideal R&R tool.

Experiences shapes identity

Experiential rewards can accumulate experience and add value to their individualistic leanings. Millennials would rather spend their own money on travel, events and experiences over property or investments.

The fear of missing out (FOMO) factor

An overwhelming 69 per cent  of millennials experience FOMO. The phenomenon is further fuelled by social media and the sharing lifestyle. An experiential reward presents an opportunity for verifiable experiences which can be shared over social media. 

Social inclusion and bonding opportunities

Though highly individualistic, millennials also feel the need to fit in and being a part of a community. Attending events and getting to do things gives millennials a sense of being connected to the community. They enjoy sharing experiences and events as this gives them an opportunity for bonding — be it bonding with the loved ones, or engaging with total strangers with the same interest. Experiential rewards offer millennials a chance to make new friends as they climb up the social ladder.

Taps into their passion

An experiential reward offers the flexibility to personalise the rewards to match the passion, lifestyle and identity of each individual.

Research has proven that accumulating experience makes people happier. More happiness is derived out of doing things as opposed to having things, as the happiness associated with possessing new things fades quickly, while experiences becomes a part of our identity and memories of experiences can last a lifetime.

When an organisation meets the millennial’s personal and professional goals, they have the winning formula.

Experiential rewards as an employee engagement tool, therefore, can be most productive for organisations as employees will be better motivated. With millennials, there is a paradigm shift from materialism to a craving for real-life experiences. Organisations looking to attract and retain in a largely millennial workforce must, therefore, grasp the changing preference and tap into this intrinsic motivation to succeed.

This article was published in The Tribune.