• February 1, 2023

Incentives to become business critical in 2023

Incentives to become business critical in 2023

Incentives to become business critical in 2023 1024 693 micebook.

Incentives are an increasingly critical business strategy to help organisations attract, retain, and build culture across in-office and remote workers, as well as strengthen channel partnerships, according to the Incentive Research Foundation (IRF) 2023 Trends Report.

These high expectations are accompanied by several significant challenges this year with inflation, uncertainty, recession fears, supply chain issues, service levels, and limited inventory among the barriers to successful implementation of incentive programmes, the report said.

Here are some of the report’s key highlights:

Expanded Role of Incentives Professional 

Incentive, recognition, and reward programs will be expected to have broader reach and deeper impact. The new decentralised workforce comes with new expectations, new drivers of performance, and new considerations for the structure and delivery of engagement programs to inspire employee performance and loyalty.

Incentives professionals play an important role in providing channels of communication, offering experiential, face-to-face rewards, and providing frequent manager and peer recognition. Their job now also encompasses helping companies demonstrate concern for employee well-being with time off rewards, access to wellness resources, and wellness merchandise rewards with the goal of helping address loneliness and burnout.

Scaling back

While the demand for incentive travel continues to come back, economic and staffing issues are often forcing incentive programme owners to scale back. Compression in hotel inventory, reduction in staff, and increased costs are common barriers to delivering an incentive trip on the same scale and size as 2019.

The report noted that seems to be a short-term trend, with incentive travel buyers indicating the number of people participating in incentive travel programmes will increase by 48% in 2023 and 61% in 2024 compared to 2019 as reported in the 2022 Incentive Travel Index.

… And ramping up

Incentive travel activity will be strong in 2023, with the Incentive Travel Index reporting that 56% of buyers increasing per person spending over 2019 levels. As incentive travel programmes rebound to meet pent-up demand, expectations are higher than ever. With the added emphasis on employee retention and recruitment, the quality and impact of programmes ties clearly to corporate goals.

Incentive travel professionals are expected to “raise their game.” Incentive travel needs to be more exciting, more exclusive, more experiential, more authentic, and more memorable than ever. Experience is considered “the new luxury” and is a top driver of destination choice among buyers today. There is a renewed emphasis on creating unique experiences that are memorable for all participants

Downtime Is the Hot Activity 

As incentive travel participants come back together, and many are now used to working from home, the need for downtime has emerged as a priority. Being given ample time to relax was ranked as most important quality of an incentive trip by participants, with 89% saying it was important in Incentive Travel Destination Preferences & Their Impact on Motivation.

Attendees want more choices in their schedules, time between programs, and blocks of time to recharge or catch up with work. They want more flexibility in their activities, including shifting some group activities to individual experiences.

Sustainability Concerns on the Rise 

Almost 80% of respondents to an IRF survey report at least some pressure from clients to provide more sustainable options in meetings, events, incentive travel venues, and transport. Hotels and DMCs are often expected to be at the forefront of implementing sustainability practices. The IRF’s Social Responsibility & Sustainability study revealed that sustainable practices are becoming more important to clients and more prevalent in RFPs.

Cost is the primary barrier to the sustainability movement. Even when sustainability is a stated concern, leadership and clients may reconsider if there is resulting increase cost or compromises in venues and reward choice.

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