An Incentive to incentivise
The golden age of incentive travel was probably the 1980s. From elephant trekking in Thailand to beach Olympics in St Lucia or wine tasting in an ancient French chateau, partner reward programmes and employee incentive travel saw top performers and valued teams taken to all four corners of the globe, with the goal, ultimately, of boosting the corporate bottom line.
But with no direct sales or lead generation as an obvious output, the pressure as we moved through the 90s to prove results and demonstrate ROI led to a tightening of incentive budgets. No surprise then that incentives became an early casualty of the recent global downturn. Events were culled, budgets were slashed and redundancies became all too commonplace.
But what about now?
The latest survey from the Society of Incentive Travel Executive (SITE) Summit reports incentive travel confidence to be at a four-year high, with almost half (48%) of respondents expecting it to increase in the next six months too.
And with good cause. This year, the Events are Great Britain study reported that the value of the events industry rose by £3billion this year and according to Markit, events spend accounted for 8.3% of the average marketing budget. Add to this the rise in consumer spending, the fastest employment growth rate for 15 years, a broad-based upturn across all sectors – manufacturing, services and construction and a general, difficult to quantify, but psychologically influential, “feel good” factor. Uncertainty, says Markit, is at its lowest level since 2007.
So what has this meant for incentives?
Events are on the up
In a 2014 survey by C&IT, 72% of corporate event planners said that they held more B2B events in 2013 than in 2012, with the increase going right across the spectrum, from staff meetings and conferences through to team building and overseas events. The biggest rise has been in incentive travel, followed by meetings, conferences, experiential events and product launches.
Incentives are on the rise
The increase in incentive programmes is partly down to some companies introducing them for the first time, while others are returning to incentive activity after a break during the recession. Some are simply increasing their budgets. Meanwhile, there’s also a trend towards venturing further afield once again to mid-haul destinations or even long-haul.
Amongst MOI clients, we’ve noticed a step away from externally focussed events and more emphasis on looking inwardly and using event activity to reward staff. It’s a move with a view to driving the business forward, but from a completely different angle, and the long term effect is more impactful than rewards such as cash, as an article in Conference & Incentive Travel magazine points out:
“Incentives create lasting memories, develop important team relationships and recognise and reward within a peer group. In comparison, there is an inherent lack of identity or human interaction with a cash reward.”
A company awayday, weekend or overseas trip makes employees feel valued and motivated and increases the likelihood of improved productivity. It’s another case of emotional drivers being more impactful than rational ones!
But perception problems persist
Understandably after a recession however, there’s still a certain reticence to use incentives and travel to reward employees – particularly amongst sectors like finance or pharmaceuticals, due to tighter governing body regulations as well as public perception issues. In the same C&IT survey 37% of corporates said they feel perception is still a barrier to incentives.
In automotive – previously almost universally strong for dealer incentives and reward and recognition events – some brands like Mitsubishi are remaining cautious for 2014, while Vauxhall for example, looked to maximise its sponsorship of the England football team with ambitious incentive trip programmes surrounding the World Cup.
Many clients have stopped using the term “incentive”, preferring instead to call events simply a “company weekend” or an “off-site” due to a lingering nervousness at being seen to be celebrating.
Here’s an incentive
Companies are definitely starting, slowly and cautiously, to organise incentives again. But just because it’s difficult to measure the ROI and hard, commercial results, it doesn’t mean they have no value.
Recently we’ve run incentives programmes for companies that haven’t run them since before the recession and some staff members may never even have experienced this kind of event before. The nature of the events means that attendees have everything sorted for them and their itinerary delivered to their inbox without having to lift a finger – whether there are two attendees or 500, this can really make employees feel valued by their company. This is hugely valuable in itself, but be sure you make the most of it. Increase the value by ensuring you recognise and reward. Extend the lifespan of the event with year-round engagement and communication, and make it memorable.