The Incentive Research Foundation has released their predictions for 2018. This study sets the tone for the incentive market for the coming year and is often a guiding indicator for companies and third party vendors, building 2018 incentive programs for how much to spend and what incentives are trending.
This year the IRF continued to use the Net Optimism Score to gauge the general outlook on the incentives industry. It is a great way to “take the pulse” of incentive providers to see not only how they feel about programming in general, but what they plan to spend their incentive budget on to be most effective next year.
Here are our biggest takeaways from the study.
1. Overall Outlook Is Positive.
The economic outlook, which drives the often-auxiliary budget for incentive programs, is up with the Net Optimism Score rising from 26% in 2016 to 44% in 2017. This shows strong confidence that the economy will remain stable and will provide a stable, positive environment for business in 2018. Incentive programs don’t get funded if companies anticipate budgets remaining tight, or being cut, so a strong economy means a strong environment for incentive programs.
2. Gift card popularity is on the Rise.
Gift card popularity in employee incentive programs is up 8 percentage points from 2016. This trend is relevant because the only way to find success in an employee incentive program is to provide incentives that will motivate employees. Gift cards are advantageous to employers because they are quick, easy, flexible and can be adjustable to any budget. However, if they weren’t popular with employees (which is not the case!) it wouldn’t matter how easy they are for employers.
Focusing on providing incentives that have increasing popularity is fundamental because it ensures that your employees engage with your program. Providing the right incentives will ensure the future of your program yields a return on investment.
3. Gift card program spending is on the rise:
Spending is an indication of confidence. When spending increases in a certain category it means that the market is willing to invest in that area, confident that it will get a return. Gift card incentive program spending is on the rise overall.
We see this in the size of spending per program. Programs that spend up to $250 per employee on gift cards are down 43%. Programs spending $251-5000 per employee have risen 57%. Big programs, spending big money on gift cards indicates that what is convenient to the employer is effective to the employee. Companies can’t afford to invest large dollar amounts in employee incentives without data-driven proof that the investment will be returned with motivation, increased production and employee loyalty and longevity.
Understanding upcoming trends allows your incentive marketing team to get ahead of the curve. Be prepared for 2018 before it arrives so that you can hit the ground running with your employee incentive program to increase productivity, motivation and loyalty all year long.
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