This year will see more spending on incentives and a greater focus on creating exceptional, experiential rewards, according to the Incentive Research Foundation
(IRF)'s "2016 Trends in Incentive Travel, Rewards, and Recognition
Drawing on its own internal research, extensive interviews, and input from hundreds of industry members, as well as reporting from industry publications, IRF isolated 10 general trends that can be expected to shape the industry in 2016.
"This study reinforces that we live in a time of extraordinary personalization," said IRF President Melissa Van Dyke. "Every business needs to keep up with a fast pace and deliver on its brand promise if it wants to retain the best people -- and keep them happy, productive, and motivated."
The 10 trends cited by IRF are as follows:1. Budgets are up...and so is oversight
The IRF's last "Pulse Survey" found that more than two-thirds of incentive planners (67 percent) expect to increase incentive travel budgets between 1 percent and 10 percent in 2016. Additionally, merchandise and gift card programs are on the uptick, with 40 percent of respondents saying the economy is positively impacting their budgets.
2. Cash is not necessarily king
"When given the choice between cash and a robust reward that aligns with their personal experiential preferences, employees often don't choose cash, especially for large awards," reported the IRF, pointing to its "Participant Study," which found that the most preferred award experience to be travel -- presented by executives and communicated through public announcement.3. A shift in incentive travel destinations will affect planning
The "Pulse Survey" found the Caribbean tied with the U.S. -- the first time that has happened. According to the IRF, "that means lead-times to book the most desirable destinations is becoming a critical factor," with 41 percent of respondents saying they are booking seven to 12 months out, and 45 percent booking more than a year out.
4. Merchandise and gift card programs lean toward luxury
According to the "Pulse Survey," luxury items are in demand, with 31 percent of participants looking for electronics, 28 percent expressing interest in open-loop gift cards, followed by 28 percent for luggage, and 23 percent for watches.
5. Recipients want authentic, unique experiences
Citing the increased interest in "authenticity" by the Millennial generation, the IRF sees the definition of "luxury" taking on a new meaning. "Incentive travel planners are responding with one-of-a-kind events, incorporating elements such as locally authentic cuisine as a reflection of culture, and entertainment that reflects the feel of the destination," according to the IRF.Related: Luxury on the Rise in Gift Card, Merchandise Programs, IRF Reports
6. A changing talent pool
Speaking of generational differences, as Baby Boomers retire from the workforce and there are fewer members of Gen X to replace them, the IRF is seeing Millennials being "trained up" with increasing speed -- and retention and reward programs accelerating to meet these growing needs.
7. Integrating technology
With the "Pulse Study" showing more than half of planners using social media to enhance their rewards program and almost a third incorporating gamification, embracing technology is expected to be more critical than ever for incentive design.
8. CSR is a given, not a goal
Incorporating corporate social responsibility (CSR) elements into a company's operations -- and incentive programs -- is now table stakes for any firm looking to attract high-performers and members of the Millennial generation. The IRF expects to see "social impact travel" continue to play an important role in incentive travel.
9. It's all about presentation
"While the tangible reward is still an important part of creating a motivational experience, the IRF's 'Participant Study' found that, for large awards, more than half of an employee's preferred experience is determined by the award presentation and professional development," the organization reported. That means companies will want to invest as much in the "total award experience" as the cost of the actual rewards.
10. Success is in the details
While much is made of generational or demographic differences, the IRF found that these play a smaller role in successful reward programs than less prominent factors, such as the significance of the reward's presenter to an employee, how it is communicated, and how the award might enhance the recipient's professional development.