State of the Incentive, Reward & Recognition Industry
Where We Are, Where We're Headed
By Brian Summerfield
A Bright Future
Despite the potential obstacles outlined above, there are a number of reasons why the incentives industry should continue to thrive. One positive development for this space is a more "scientific" understanding of how non-cash rewards work, achieved through improvements in research and technology.
"I think we could benefit from the industry continuing its move from an 'art' to a 'science,'" said Slagle, who cited recent IRF research as an encouraging example of this. "A study focused on the intangible, non-financial value of awards programs discovered that more companies have begun to tie their employees' satisfaction and productivity to how they are rewarded. While we would hope that all companies spending money in one form or the other, cash or non-cash, would figure out what they're doing, such is not the case. But the smarter companies seem to get it."
"Technology is no stranger to our space," Dolan said. "As it advances, so follows the providers' platforms, services and products. The research, as well, is equipping senior leadership to understand the strategic importance of their human capital, how engagement reflects on shareholder equity, and the employer's branding reputation."
Additionally, the modern employment market—characterized by more frequent turnover, higher levels of dissatisfaction and disengagement among personnel, and less loyalty in general on the part of both employers and employees—presents bright prospects for incentives providers.
"Business has always been about talent acquisition and retention," Dolan said. "Be it an employee base or a sales environment, engagement, respect, recognition and a well-balanced reward plan—meaning the right blend of cash and non-cash in the equation—is what employees long for. As today's savvy prospective employees seek out employers, the trend is to think of oneself as a source for hire. If you treat me right, I'll stay. If not, I'll move on. Not that difficult [to leave] anymore."
"The general inability of modern compensation systems to reward and recognize all of the different types of behaviors that organizations want and need from their employees, channel partners and salespeople bodes very well for the non-cash rewards and recognition space," Van Dyke said. "In the national economy and the world economy, what we do is going to become more and more important."
Another development that could help the industry evolve is the move toward more rigorous professional and quality standards. For a recent example of this, Slagle pointed to the Incentive Federation's just-launched initiative to become the lead organization on developing a set of standards for the rewards and recognition field, not unlike the independent ISO 9000 quality management framework.
"The aim will be to describe the best practices undertaken in the design and implementation of, say, an incentive safety program to ensure the best outcomes for a company's employees and for the company's bottom line," he explained. "We think it's possible to do that if we can get the best minds in our industry to help us develop the standards and then gain approval by the U.S. and international organizations that sanction such standards. If successful, solution providers in our industry can then be certified as using those standards and be known to their clients as a preferred provider to help those companies improve employee satisfaction and productivity as well as customer loyalty. We might also dissuade government intervention via regulations if we have internationally approved standards being used—a lofty and ambitious undertaking, but we've started that task to help any and all industry practitioners succeed."
Bringing together "the best minds in our industry" around efforts like this is the kind of thing that Van Dyke, for one, would like to see a lot more of.
"We have a lot of wonderful people and organizations in our industry," she said. "We're in the door in more than 80 percent of all U.S. businesses. Working together as an industry to make sure those programs are done correctly and effectively … that would be what I would wish for. That's our biggest challenge—and our biggest opportunity."