As a leader in HR, you have a lot to juggle day-to-day in your workplace, and your workload is only exacerbated by manually negotiating corporate perks, recognizing and rewarding employees, keeping track of those programs, and weighing the ROI of your corporate discounts and rewards every day.

Many companies choose between building an in-house solution or outsourcing their employee rewards and corporate discount programs. Some view outsourcing as a convenience, but the real question is: how much is that convenience actually worth?

The Cost of an In-House Solution

Building your own solution in-house would either require time from your existing engineering team or hiring an outside engineer to build a content management system (CMS).

The average cost of an engineer is around $150 an hour. If an outsourced engineer took 100 hours to build a simple platform to manage corporate discounts and rewards, the base cost would be approximately $15,000. However, this estimate does not take into consideration project scope, optimizing your CMS for mobile, customization, and many other factors.

And after you’ve invested over $15,000 to build your employee recognition and corporate discount program, your HR team will continue to expel expensive resources to manage discounts and rewards, scale your system, and optimize for mobile, further adding to the cost.

Total cost: $20,000

Negotiating and Managing Corporate Discounts

Even with an in-house CMS that manages corporate discounts, your HR team would still have to take the steps required to negotiate new perks. The time and effort this takes can be a detriment for HR teams who could be focusing on other more important tasks.

For example, to secure one gym discount, your HR team would have to:

  1. Research which gyms employees want to join
  2. Contact the gym and negotiate the discount
  3. Submit paperwork
  4. Manually enroll employees in the gym membership
  5. Onboard employees
  6. Troubleshoot technical issues
  7. Track usage of the gym discount
  8. Process refunds from the gym for any employee turnover
  9. Maintain awareness through company announcements

After all these steps, it’s safe to say your HR specialist will at least spend 10 hours implementing and managing this Perk. If the average wage of an HR generalist is approximately $28 an hour, this single Perk costs $280.

But remember, your platform would host many more perks. On average, corporate discount programs start with approximately 30 perks, so using this average, your cost rises to about $8,400 in your first month. Then, consider the added cost of adding more perks.

Total cost: $28,400

Managing and Tracking Rewards

Building an in-house recognition platform requires many additional manual maintenance processes that pose risks for Finance departments. A simple CMS won’t track where funds for your recognition program are allocated, which means Finance departments could likely spend hours of time managing the budget. This can be costly for scaling companies and difficult to analyze.

With an in-house solution, purchasing and distributing rewards still takes time and effort. For example, to purchase a reward from a specific vendor, your HR team would still have to:

  1. Research which rewards are in high-demand
  2. Contact the vendor to purchase the reward
  3. Manually input the reward into the CMS
  4. Manually track analytics and usage
  5. Manage your recognition budget on a discrepant platform
  6. Manually track shipping, purchasing, and distribution
  7. Coordinate with additional vendors to customize rewards if they are company-branded
  8. Troubleshoot technical issues
  9. Maintain awareness through company announcements

Your team will at least spend 10 hours on setting up this reward. Using the same cost analysis as above, your cost has risen by another $280. If your company has even 10 Rewards — a low number for a typical Rewards program — you’ll add an additional $2,800 to your total expenses.

Your team will likely struggle to track program performance and ROI. Furthermore, your budget could balloon if you can’t see which rewards you should be taking advantage of and which Rewards should be sunsetted.

Total cost: $31,200

Recurring Costs

Your total cost for your first year building and maintaining your in-house discount and rewards solution has now exceeded $30,000, and we haven’t even considered the recurring costs of maintaining this system. Each year, you’ll spend hours adding corporate discounts and custom rewards, removing inactive employees, and troubleshooting technical issues. And if your demand for a more robust solution increases, you’ll have to repeat this expensive process again. If you outgrow your solution in the second year, you might end up spending upwards of $40,000, including additional development work, adding additional corporate discounts and rewards, and troubleshooting technical issues.

For larger enterprise companies, the cost can rise much more. Not only do you have to maintain an in-house solution, but you need to have tailored rewards and corporate discounts relevant to all employee needs. Let’s say your enterprise company has 80,000 employees. If your HR team even spent $1 each year managing and troubleshooting all employee accounts, the recurring cost of maintaining your in-house solution rises even further.

Automate, Engage, and Streamline

In the first year alone, your company will spend over $30,000 building an in-house platform and hundreds of hours maintaining it. An automated employee recognition and corporate discount platform is not only convenient, but cost-effective for your organization.

An out-of-the-box solution provides a digital experience designed by UX experts and built-in mobile experiences, saving additional costs on development. With an automated employee recognition and corporate discount platform, you’ll gain access to a support team that will negotiate your perks, manage your rewards, and streamline your manual processes. Not only that, but the platform will provide detailed analytics on program performance and how your recognition budget is being allocated and spent.

Additionally, your team no longer has to worry about the complications behind onboarding, data transfer, and maintaining awareness. An automated solution integrates with your team’s HRIS and sends automatic updates to your employees reminding them to take advantage of the platform.

It’s clear that the ROI of investing in an automated employee recognition and corporate perks platform extends far beyond convenience. Request a demo to see how Fond can help you manage your Rewards and Perks.