IRF Study Looks at Incentive Trends
A new study from the Incentive Research Foundation, "10 Trends for Merchandise and Gift Card Programs in 2015," notes that retaining top performers and preparing them to take over the reins during the next decade is a top priority for most organizations. A crucial part of that process will involve merchandise and gift cards programs that inspire and connect with these future leaders, keeping them happy, productive and engaged.
The IRF has identified 10 central trends that will help managers better understand what's in store for the future in terms of this key motivational tool:
- Positive Impact on Program Design: The number of organizations that believe economic conditions are having a negative impact on incentive programs continues to decline. Conclusion: Both the relative long-term buoyancy and the overall current positive state bode very well for merchandise and gift card reward programs in 2015.
- Budgets Trending Up: Almost 50 percent of planners in the fall of 2014 said they'll be increasing their budgets; additionally, per-person spend is up. Conclusion: Barring unforeseen economic or extreme political changes, budgets will maintain a strong positive trajectory for the next few years.
- Experiences Lead the Way: We're entering a phase that has been called the "Experience Economy," with more robust experiences desired by different age groups. Conclusion: Suppliers of merchandise and gift-card-based award and recognition programs must ensure the overall experience intended for each individual recipient is appropriate and rewarding—whether employee, salesperson or channel partner.
- Limited Luxury: It's important to seek a balance between necessity and luxury. Electronics and "open loop" gift cards are now popular items for programs. Conclusion: Items that can be personalized and items that ride the line between hedonistic and security drives will be popular in 2015 and beyond.
- An App in Everything: The proliferation of mobile devices and apps is trending to merchandise having similar functionality. Conclusion: We will no doubt see movement away from specific devices that maintain multiple applications to applications embedded in all aspects of daily life and products.
- Wellness Is a Booming Industry: A relatively large number of employers continues to introduce wellness rewards, noting that the use of noncash items drives participation. Conclusion: Both the amount of products used to incent wellness and the types of products labeled with wellness attributes will continue to grow.
- Disruption as a Constant State: Social political and environmental unrest continue to present program risks. During such times, merchandise and gift cards are providing a safe haven for many companies. Conclusion: This trend will increase the use of reward and recognition programs, force suppliers to disclose their risk mitigation plans more readily and increase the number of organizations looking to outside partners for risk mitigation.
- Mobile Proliferation: Mobile device saturation is leading many companies to allow employees to bring their own devices to work. In fact, more than half of the people in a recent survey believed "BYOD" could serve as a retention and recruitment tool, especially with millennials. Conclusion: Program communications will not just need to be available on mobile devices, they'll need to be configured across multiple platforms as well.
- CEOs Need to Attract and Retain Talent: Thanks to shifts in worker population demographics, CEOs are confronted with a smaller number of people entering the job market than the number of people leaving it. Conclusion: Noncash reward and recognition programs will be a key tool for executives seeking to motivate multiple generations and "train up" the next run of leaders more quickly.
- Answering the Question: 'Engaged in What?': In today's knowledge economy, successful organizations need their employees to be engaged in new (non-core) role. Conclusion: As organizations continue to attract and retain top performers, agile noncash programs like gift cards and merchandise will be key strategic tools.
To learn more and view the report, visit www.theirf.org.