Recognition Program Administration – How much do companies spend on it?

For large companies, designing, launching and administering a global employee recognition program is a big task. Whether companies do it themselves by assigning internal resources to run the program or find an external partner (outsourced Recognition service provider) to help them with it, there is a cost for administering the program. Though I would love to get some specific research around this, the figures below have been derived from typical administrative costs budgeted by large companies, whenever they outsource a HR process/program in its entirety.

1) In India – 6 to 8% of overall budget
2) In South Asia – 4 to 6% of overall budget
3) In the Middle east – 12-18% of overall budget
4) In North America – 15-18% of overall budget

A linked feature I have noticed in India and South Asia is the difficulty, companies have in paying anything for program administration. They seem very comfortable paying for “Stuff” (Reward products) and want everything else to be free. Instinctively, they also tend to assign a very low cost to manpower/resources required for the administration.

There is also the concept of “Landed Cost”, I have noticed very often. Clients want to know upfront how much they will be billed for products (including the cost of the product, taxes and shipping) and want to contract at this “Total Price” or the “Landed Cost”. Even if you visit a B2C online store such as Infibeam (www.infibeam.com), you will notice that the price they show on the website for a product typically includes taxes and shipping.