Its survey of 300 SMEs and 500 employees of SMEs found Manchester-based smaller businesses handed over rewards totalling £1,156 over the course of 12 months, surpassing the London businesses’ average of £929, while those in Edinburgh gift the least, at just £686. The overall average was £910, and rewards can range from flights to hotel and shopping vouchers.

Of the employees who received a reward, almost half (46%) said it made them feel truly valued, over two in five (44%) believe their company was rewarding their hard work and dedication, while 33% felt motivated to work harder. The impacts are also felt by the employer, with improved motivation and employee performance being identified.

Jose Carvalho, senior vice-president at American Express, said: ‘Our research has found that 94% of employees say they would be more like to stay with a company if it regularly rewarded staff members.

‘With rewards available to accrue across loyalty cards to small business charge cards, they represent a valuable way of enabling business owners to earn rewards on spend which they can then use for employee recognition.’

According to the research the types of rewards being gifted vary, as on average half (50%) of employers offer cash bonuses, 46% offer high street vouchers and 40% share restaurant vouchers. Yet cash is not king across the whole of UK, with food and drink vouchers proving the most popular with SMEs in Cardiff (52%) and Leeds (47%).

American Express also suggested companies should look at how the incentives offered with business credit and charge cards can be used to help a company grow. The rewards accrued could be put towards business development by utilising air miles or hotel vouchers towards sending employees on business trips or training courses, to help keep costs in check.

Report by Pat Sweet