According to the 2012 Canadian Incentive Trends Survey, Canadian companies have considerably increased their use of corporate employee incentive programs over the past two years. And despite continued economic uncertainty, the majority of executives and program managers confirmed that they have no plans to reduce their incentive program budgets in the next 12 months.
The survey shows a 46 percent increase from 2010, and a 21 percent increase from 2011, in the number of companies using incentives for employee programs. When asked how they have used incentive programs, 38 percent said other uses (sales and channel programs), marketing programs (37 percent), referrals for new customers/employees (34 percent), contests/lotteries (28 percent), customer loyalty/appreciation programs (27 percent), and customer retention programs (14 percent).
This year’s survey reveals a continued, widespread commitment to the use of incentive programs with 66 percent of respondents confirming they have used incentives, and over 86 percent indicating the number of programs they are implementing increased or stayed the same in the past three years. And consistent with findings from previous years, 59 percent of respondents believe they gained a competitive edge over the competition as a result of these programs.
Of respondents who indicated they do not currently use incentives, budget constraints have remained the primary reason, with the same number of respondents (46 percent) in 2011 and 2012 pointing to lack of budget as the rationale. Similarly, of the respondents who are currently implementing incentive programs and who plan to reduce or eliminate them in the next 12 months, 33 percent indicated it was due to reduced or no budget. Only 10 percent of companies in 2012—down from 20 percent in 2011—plan to decrease their incentive program budgets in the coming year.
According to the survey, 36 percent of respondents either do not know if, or do not believe, their employee incentive programs motivate all target age groups within their organization. In fact, 74 percent of respondents acknowledged that it is difficult to develop incentive programs that motivate a multigenerational work force. When it comes to motivating specific age categories, 46 percent indicated that all generational groups including matures (67+), boomers (48-66), Gen Xers (33-47), and Millennials (32 and under), are equally difficult to manage in terms of choosing the most appropriate incentive to offer. Of these groups, Millennials were perceived as the most difficult to motivate with incentives (21 percent), followed by Boomers (16 percent), Matures (9 percent) and Gen Xers (8 percent).
“Designing compensation and incentive programs that appeal to individuals across all age groups can be difficult,” explains Ingrid Buday, HR coordinator, Teranet. “The challenge is in creating a program that is flexible, measureable and valued by all recipients. To overcome this challenge, we implemented a branded Visa prepaid incentive card program that is easy to change as our business objectives shift and that recognizes and reinforces clearly defined employee behavior.”
Survey respondents indicated that the top two factors they consider when designing incentive programs are program costs (23 percent) and participant satisfaction/positive experience. When asked which incentive program they believe is the most cost-effective, 32 percent of respondents selected retail gift cards. Other responses include merchandise (30 percent), prepaid Visa, MasterCard or American Express incentive cards (26 percent), incentive travel (4 percent) and experiential events (3 percent).
However, from a participant satisfaction standpoint, when asked which reward they believe to be the most valued by end recipients, the highest number of respondents indicated that they were prepaid Visa, MasterCard and American Express incentive cards (38 percent), followed by retail gift cards (22 percent), incentive travel (14 percent) and merchandise (14 percent).