Five Trends Driving The Incentives Market In 2023
Given the challenging labor market and shifting economy, incentives are an evolving business strategy companies are turning to for help attracting and retaining employees and building culture. The Incentive Research Foundation’s 2023 Trends Report identifies several of the factors driving that evolution.
State Of The Industry
It is attractive to think that many things returning to “normal” means incentive professionals can return to what worked well prior to the pandemic. The trends identified by the study show that programming, approaches and communication have to change as the workforce has changed. Preferences have shifted.
“As we enter 2023, incentive, recognition, and reward programs will be expected to have broader reach and deeper impact,” said IRF President Stephanie Harris. “Program owners are charged with motivating a changing workforce while dealing with major disruptions, including inflation, uncertainty, ongoing supply chain issues, and limited inventory.”
The IRF is a private, nonprofit foundation that funds research studies and develops products serving all segments of the global incentive industry. To read its 2023 Trends Report, click here.
Here’s what’s pushing change in the incentives industry in 2023:
- The role of incentives professionals is changing. Today’s often decentralized workforce requires new ways to connect, engage and drive performance. Incentives professionals’ jobs are moving beyond providing communications channels, rewards and recognition to include demonstrating businesses’ concern for employees’ well-being, wellness resources and addressing loneliness and burnout.
- Increased demand for incentive travel is moderated by staffing and economic issues. Incentive travel programs are rebounding to meet pent-up demand and many of those the IRF spoke to are looking to make it more exciting, exclusive and memorable than ever. But reduced hotel inventory, staff and rising costs are preventing many from providing travel at the same scale they did in 2019.
- Inflation is increasing the perceived value of non-cash rewards. Cash and gift cards aren’t buying as much as they used to, but the IRF found that 50% of those they spoke to believe inflation is improving the perception of other rewards programs. They can be particularly well-received gifts when household discretionary spending is limited.
- People are running out of patience. Clients are becoming less accepting of COVID-related issues, particularly in regard to standards of service. The same goes for issues stemming from supply chain challenges or staffing shortages. This is particularly acute where costs are higher than what they were pre-pandemic.
- Downtime is becoming more valuable. Incentive program participants want more choices in their schedules, time between programs, and blocks of time to recharge or catch up with work. They also want more flexibility in their activities and to shift some group activities to individual experiences. Almost half of incentive professionals polled said free time was key to a successful program.