New Berkeley survey reveals latest corporate incentive trends

Management teams have long viewed employee motivation as important, but in practice, have often treated it as secondary to their business’ bottom line. Yet a new study, released today, has found that increasing employee motivation will become a higher focus for Canadian executives in the coming year. This is translating into a renewed focus on employee incentive programs, as part of their strategy to boost company productivity and bottom line results.

These findings are the result of the 2011 Canadian Incentive Trends Survey, which polled 429 Canadian executives from marketing services organizations, incentives firms, human resources consultancies, and corporations working across industries and sectors. Conducted in April 2011 by Berkeley Payment Solutions, the survey is aimed at helping executives gain insight into the views and practices of Canadian companies with respect to the corporate incentives programs they implement.

This year’s survey reveals that increasing employee motivation has become a key area of focus among Canadian companies, with a strong majority (88%) of survey respondents indicating this is a top management priority in the coming year. And in contrast to last year’s findings, corporate incentives are now being used for employee programs more than any other type of program—including sales and marketing programs, which were the leading uses in 2010.

Specifically, when asked how they have used incentive programs, more than two-thirds (68%) of respondents said they were used for employee programs, compared to just over half (56%) last year. Other uses for incentive programs included sales programs (55%), marketing programs (50%), customer retention programs (25%), rebate programs (18%), and channel programs (10%).

When asked why they implemented incentive programs, again over two-thirds (69%) of respondents cited motivating employees as the top reason. Other reasons and business objectives for the use of corporate incentives included increasing sales (62%), attracting new customers (41%), increasing customer loyalty (38%), supporting a product launch or promotion (34%), and increasing brand exposure/awareness (31%).

“We’ve seen an increase in demand for employee programs in the last year, as organizations look to adopt cost-effective strategies to motivate employees, improve team performance, and meet business goals,” says David Eason, CEO, Berkeley Payment Solutions.

“With employment rates on an upward trend, the need to attract and retain high performing employees continues to intensify,” continues Eason. “To accomplish this, more and more companies across the country are adopting customized employee incentive programs that are flexible, measurable, and easy to adapt as business objectives shift.”

Corporate incentive programs seen as key to generating competitive advantage

The survey affirms widespread use of incentive programs, with almost three-quarters (72%) of Canadian business leaders confirming that they have used corporate incentive programs as part of their business strategy. And more than half (54%) of these respondents felt they gained a competitive advantage over the competition as a result of these programs.

“Executives are recognizing that a motivated workforce translates into increased performance,” says Eason. “This is directly leading to a renewed commitment to incentive programs that foster relationships and strengthen employee dedication.”

Strong program results propel year-over-year commitment to the use of corporate incentive programs

The survey shows that incentive program budgets and the number of programs companies are implementing has remained fairly consistent year-over-year. When asked how their current incentive program budgets compare to the previous year, two-thirds (66%) of respondents said their budgets have stayed the same or increased—the same proportion as last year. Similarly, almost three-quarters (71%) said the number of programs they are running this year either increased or stayed the same, compared to 73% in 2010. As well, almost half (46%) of respondents said the current economic outlook will have no impact on their corporate incentives budget in the next twelve months—up from 39% last year. A key contributing factor to the continued use of incentives appears to be the high perceived success rate of the programs. In fact, of respondents who were able to measure program results, almost all (91%) confirmed their program was either moderately or very successful.

Retail gift cards are the leading employee incentive vehicle

Of respondents who have run employee incentive programs, over two-thirds (67%) used retail gift cards/certificates for a specific retail outlet (store-specific) as an incentive vehicle. This is followed by merchandise (52%), branded prepaid MasterCard or Visa® cards (34%), specials events (34%), and incentive travel (25%). According to the survey, store-specific retail gift cards/certificates were perceived as the most cost-effective (39%) and easiest incentive vehicle to administer (51%).

However, respondents do not believe store-specific retail gift cards/certificates provide the highest return on investment (ROI). When asked what type of incentive they believe will provide the highest ROI, branded prepaid MasterCard or Visa cards led, with 38% of respondents saying they provide the highest return. This was followed by retail gift cards/certificates (28%) merchandise (13%), experiential events (10%) and incentive travel (9%).

Survey shows disconnect between incentive preference expressed and actual incentives used

According to the survey, more than half (52%) of respondents indicated that they used merchandise as part of their employee incentive programs. Yet, when asked to rate the type of incentive they believe would be most valued by recipients, over three times (35%) more respondents cited branded prepaid MasterCard or Visa cards as the most valued than those who selected merchandise (11%). Similarly, when asked what type of incentive program they believe recipients would be most motivated by, about ten times (39%) more respondents selected branded prepaid MasterCard or Visa cards than merchandise (4%).

“Even though program managers believe prepaid incentive cards are more effective in motivating recipients and providing a business return, it’s not surprising that many companies are still using merchandise,” explains Eason. “The reason is an issue of awareness and accessibility, since there are far more suppliers in the marketplace offering incentive merchandise, compared to very few providers of prepaid card programs. But as more and more companies discover prepaid, and the strong business case behind this alternative, we continue to see consistent growth in prepaid program adoption.”

About the 2011 Canadian Incentive Trends Survey

Berkeley Payment Solutions conducted the 2011 Canadian Incentive Trends Survey to gain insight into the views and practices of Canadian companies with respect to the corporate incentives programs they implement and is the only research of its kind. Now in its second year, the survey was conducted in April 2011 and polled 429 Canadian executives from marketing services organizations, incentives firms, human resources consultancies, and corporations. It included companies of all sizes and across numerous sectors from financial services and consumer packaged goods to telecommunications, healthcare, media and advertising, manufacturing, and government.

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