An employer’s guide to non-monetary incentives in 2025

While salary and benefits are as important as ever in attracting and retaining talent, stretched budgets mean employers are becoming increasingly creative in how they compensate staff. As a result, as many as 84% are utilising non-monetary incentives.

In this article, we’re looking at what non-monetary incentives are, the benefits they can provide, and the top non-monetary incentives you can offer your workforce.

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What are non-monetary incentives?

As the term suggests, non-monetary incentives are the methods employers use to compensate and reward their employees that are not tied to a worker’s salary. These incentives can include things like praise:

• Perks
• Rewards
• Career advancement opportunities

It’s important to remember that non-monetary incentives should be viewed as part of an overall compensation package, complementing competitive salary ranges and employee benefits rather than replacing them. Implemented correctly, these incentives can be an effective tool in talent acquisition efforts.

Monetary incentives vs non-monetary incentives

In addition to salary and non-monetary incentives, employers can offer their workforce monetary incentives. This can come in the form of cash payments to individual workers based on assessments of their performance over a specified period. Other examples of monetary rewards include:

• Stock options
• Profit sharing

While monetary incentives can effectively motivate employees to achieve specific goals, they come with potential drawbacks that employers should consider:

• Diminished motivational impact: Over time, employees may come to see monetary incentives as an expected entitlement rather than a source of motivation.
• Risk of perceived inequality: Rewarding only top performers may foster resentment among those who narrowly miss out, potentially harming team cohesion.
• Increased financial burden: While impactful, monetary incentive programmes can significantly escalate costs, making them less sustainable for long-term use.

The benefits of non-monetary rewards

Non-monetary incentives are a powerful tool for creating an environment where team members feel genuinely valued. By focusing on individual recognition and holistic well-being, these rewards can help to:

• Foster a positive workplace culture: Non-monetary incentives can reinforce a sense of shared purpose and belonging, contributing to a culture where employees feel appreciated.
• Enhance work-life balance: The implementation of non-financial incentives allows employers to demonstrate their commitment to employees’ wellbeing and mental health, helping staff manage their personal lives and reduce burnout.
• Improve employee retention: Employees who feel valued are more likely to stay in their role, with 79% stating an increase in recognition makes them more loyal, highlighting the role of incentives in retaining talent in competitive markets.
• Attract top talent: Offering unique non-monetary benefits can differentiate an employer from competitors, with jobseekers often prioritising workplaces that align with their values and offer benefits beyond financial compensation.
• Showcase organisational values: Rewards and incentives can serve as a reflection of an organisation’s core principles, demonstrating that they stand for more than just profits.
• Boost productivity and engagement: Feeling appreciated through rewards and recognition encourages workers to take pride in what they do, which research shows can increase employee productivity by 31%.
• Reduce financial burden: Compared to pay rises and bonuses, non-monetary incentives are a more cost-effective approach for employers, allowing them to reward their workforce without increased financial commitments.

With 72% of workers prioritising salary in their job search, enhancing pay packages with non-financial incentives can help employers stand out and facilitate smoother salary negotiations by adding extra value to their offers.

3. Mentorship programmes

Pairing employees with experienced mentors offers personalised guidance and support that is invaluable for career growth. Mentors can help mentees:

• Overcome challenges
• Set and achieve goals
• Unlock their full potential

Mentorship programmes also promote a culture of collaboration and knowledge-sharing, fostering stronger connections across teams. Beyond these immediate benefits, mentorship can support long-term succession planning, boost morale, and create a more motivated and engaged workforce.

4. Paid volunteer time

Allowing employees to take time off to volunteer for causes they are passionate about demonstrates a commitment to social responsibility and community impact.

This initiative aligns with the personal values of many employees, particularly younger workers, with 53% of under-35s in full-time employment expressing a desire to volunteer more than they currently do. Offering paid volunteer time not only provides staff with the opportunity to give back, but it also deepens their emotional connection to the organisation as they see it making a tangible contribution to society.

Offering employees these opportunities can enhance morale while building a strong employer brand that appeals to socially conscious talent.

5. Sabbaticals

Providing longer periods of leave, such as sabbaticals, offers employees the time and flexibility to recharge, pursue personal goals, or engage in meaningful long-term projects that they might otherwise struggle to prioritise. This could include:

• Travelling
• Furthering their education
• Volunteering
• Dedicating time to personal development and reflection

By offering sabbaticals, employers demonstrate that they value their employees’ personal growth and well-being beyond their day-to-day work contributions. This thoughtful approach signals trust and recognition, fostering stronger loyalty and a deeper emotional connection between employees and the organisation.

Additionally, time away from the workplace helps reduce the risk of burnout, enabling employees to return with renewed energy, creativity, and a fresh perspective. This can result in greater innovation, enhanced problem-solving abilities, and improved productivity.

This incentive also plays a crucial role in supporting employee wellbeing by helping to alleviate stress and reduce the risk of burnout. When employees know they have the flexibility to take time off beyond standard leave policies, it fosters a sense of appreciation and trust.

8. Staff discount schemes

Exclusive discounts on products or services not only save employees money but also foster a sense of belonging and loyalty. These perks create a tangible connection between employees and their workplace, showing that their employer is invested in their well-being.

Tailoring discounts to employee preferences can further enhance the perceived value of this incentive. This can include partnering with:

• Local retailers
• Entertainment venues
• Restaurants

Such personalisation ensures the discounts align with employees’ lifestyles, making them more meaningful and impactful.

9. Birthdays off

Offering a day off on employees’ birthdays is a small but meaningful gesture that shows the organisation values personal milestones and the need to take time off to celebrate and relax.

By recognising these special days, employers contribute to a sense of appreciation and well-being. This thoughtful perk enhances job satisfaction and reinforces a supportive and employee-focused workplace culture.

10. Subsidised gym membership

Promoting physical well-being underscores an organisation’s commitment to employee health. This can be achieved by offering:

• Discounted gym memberships
• Access to fitness classes
• Wellness programmes

Healthier employees are often more energetic, productive, and focused, while also taking fewer sick days. This investment in well-being not only benefits the workforce but also creates a positive return for employers through improved performance and morale.