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Why Employee Engagement With Digital Rewards and Incentives Are More Important Than Ever

Why Employee Engagement With Digital Rewards and Incentives Are More Important Than Ever

Technology has completely changed the way Human Resources (HR) and People Teams function. While they are still responsible for managing the employee life cycle – finding, hiring, training, supporting new employees and compliance — new technologies and information technology (IT) applications allow organizations to streamline and simplify HR and human capital management (HRM) processes.

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What is human capital management (HCM)? 

Human capital management (HCM) is the process of hiring the right people, managing workforces effectively and optimizing productivity. Simply put, it’s managing your people. 

HR departments typically manage finding, screening, recruiting, and training employees, along with compliance. HCM extends beyond traditional HR processes by including employee rewards and talent management.

Organizations used to look to HR solutions to handle discrete HR needs such as:  

  • Payroll: Organizations primarily rely on HR solutions to process payroll for employees in varying states and countries. 
  • Compliance & reporting: Organizations expect their HR solutions to support compliance by delivering accurate data, tax reporting, and regulatory guidance.
  • Employee benefits: Organizations need HR solutions to deliver flexible benefit programs for a diverse workforce. 

New technology not only handles traditional HR functions but introduces new opportunities to improve employee engagement, morale and productivity, and organizations are looking for more comprehensive HCM solutions. 

What more are organizations looking for from HCM solutions? 

Talent management

Organizations want to manage the entire talent lifecycle—from onboarding the right talent and helping them reach their performance goals through effective learning and development to talent reviews and succession planning. 

Organizations need HRM platforms to manage talent with: 

  • Effortless Onboarding to get employees acclimated to the company culture and their role with an HR system that outlines the company mission, their responsibilities and incorporates payroll and benefits. 
  • Career Development with simple embedded appraisal systems. 

Employee management

Organizations want to be financially responsible by controlling labor costs, reducing errors from manual processes, and simplifying compliance for global employees.

Employee rewards

Organizations know that attracting and retaining the right talent is essential. Employee recognition is a key component in HR strategies, and organizations are searching for HRM software with better rewards and recognition capabilities. 

The key benefit of an all-inclusive HCM solution is that all HR processes, talent management and workforce rewards are connected. Comprehensive HCM solutions help organizations leverage data to make better decisions, provide excellent employee experiences and stay on the cutting edge as HCM evolves and employee expectations change.


“HCM systems allow leaders and employees to focus on what they need to do while providing a great HR experience.” 

“[It] helps you with people management, profile management, workforce structures, checklists, actions, workflow, approvals and notifications, it simplifies your work.” 

G2.com Reviews of HCM Systems


HCM systems that focus on employee engagement are high on most organization’s lists, since employee engagement dropped in 2021 for the first time in 10 years. In 2021, only 34 percent of employees polled by Gallup reported feeling engaged at work. In 2020, 36 percent of employees were engaged. This drop comes on the heels of the Great Resignation and makes employee recognition a key component in HR strategies. 

Organizations are focused on improving employee engagement and, now more than ever, want streamlined recognition and rewards programs from their HCM solutions. 

Why are HCM solutions with embedded rewards important to organizations? 

Embedded rewards and incentives are the key to attracting and keeping employees invested in their company culture. Higher employee engagement has been extensively shown to increase productivity, reduce turnover and improve morale. It’s a must for smart organizations.

Embedded employee rewards make it simpler for organizations to reinforce company culture 

Employees who are emotionally fulfilled through appreciation and acknowledgment feel a sense of loyalty and act as brand ambassadors inside and outside of the company. Research shows that when employees get the right amount of recognition, they feel more connected to their organization’s culture. The ability to easily recognize an employee or team from HRM software makes it simple to build a culture of appreciation. 

Embedded employee rewards improve employee retention

It’s been proven that recognition directly impacts employee retention. A lack of recognition is the number three reason why employees leave their jobs. But 2-in-3 employees reported that a great corporate gift would make them more likely to stay with their current employer, according to our 2022 consumer survey. Research further supports that 69% of employees planning to quit their jobs would stay if they received recognition and rewards. Organizations want to retain employees using the tools they already have.   

Embedded employee rewards improve productivity

Happy workers are 13% more productive and organizations are invested in keeping employees happy. 

The truth of the matter is that organizations are finding ways to recognize and reward employees in 2023 because it matters. Your HCM software or HR platform can help make these tasks easier for users while also adding incremental revenue. It’s a win-win. 

Ready to take your HCM solution to the next level with a robust rewards API? Schedule a demo today.