Survey reveals significant increase in corporate use of employee incentive programs across Canada

Respondents cite difficulties in motivating a multi-generational workforce, Millennials present biggest challenge

According to a new study released today, Canadian companies have considerably increased their use of corporate employee incentive programs over the past two years. And despite continued economic uncertainty, the majority of executives and program managers confirmed that they have no plans to reduce their incentive program budgets in the next 12 months.

These findings are the result of the 2012 Canadian Incentive Trends Survey, which polled 767 Canadian professionals from marketing services organizations, incentives firms, human resources consultancies, and organizations working across industries and sectors. Conducted in May 2012 by Berkeley Payment Solutions, the survey, now in its third year, 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 shows a steady year-over-year increase in the number of organizations using incentives for employee programs. In particular, the survey reveals a 46% increase from 2010 (and a 21% increase from 2011) in the number of companies using incentives for employee programs – with more than three-quarters (82%) of respondents currently stating they have used incentives for employees. When asked how they have used incentive programs, other uses include sales and channel programs (38%), marketing programs (37%), referrals for new customers/employees (34%), contests/lotteries (28%), customer loyalty/appreciation programs (27%), and customer retention programs (14%).

“Our research shows that increasing employee motivation remains a top management priority in the coming year, with the majority of respondents telling us that this is the case within their organization,” says David Eason, CEO, Berkeley Payment Solutions. “As a result we are seeing more and more Canadian companies adopt customized employee incentive programs to motivate and retain their employees – and ultimately improve overall company performance.”

“Despite ongoing global economic uncertainty, Canadian companies are continuing to invest in their workforces,” explains Eason. “It is clear that maximizing employee performance and retaining top workers, in a way that is both measurable and cost-effective, is a key business objective for 2012,” continues Eason.

Corporate incentive programs seen as key to establishing competitive advantage

This year’s survey reveals a continued, widespread commitment to the use of incentive programs with two-thirds (66%) of respondents confirming they have used incentives, and over three-quarters (86%) indicating the number of programs they are implementing increased or stayed the same in the past three years. And consistent with findings from previous years, the majority (59%) of respondents believe they gained a competitive edge over the competition as a result of these programs.

Of respondents who indicated they do not currently use incentives, budget constraints have remained the primary reason, with the same number of respondents (46%) in 2011 and 2012 pointing to lack of budget as the rationale. Similarly, of the respondents who are currently implementing incentive programs and who plan to reduce or eliminate them in the next 12 months, one-third (33%) indicated it was due to reduced or no budget. Only 10% of companies in 2012 (down from 20% in 2011) plan to decrease their incentive program budgets in the coming year.

Multi-generational workforces present challenges for incentive program managers

According to the survey, over one-third (36%) of respondents either do not know if, or do not believe their employee incentive programs motivate all target age groups within their organization. In fact, nearly three-quarters (74%) of respondents acknowledged that it is difficult to develop incentive programs that motivate a multi-generational workforce. When it comes to motivating specific age categories, almost half of respondents (46%) indicated that all generational groups including Matures (67+), Boomers (48-66), Gen Xers (33-47), and Millennials (32 and under), are equally difficult to manage in terms of choosing the most appropriate incentive to offer. Of these groups, Millennials were perceived as the most difficult to motivate with incentives (21%), followed by Boomers (16%), Matures (9%) and Gen Xers (8%).

“Designing compensation and incentive programs that appeal to individuals across all age groups can be difficult,” explains Ingrid Buday, HR Coordinator, Teranet. “The challenge is in creating a program that is flexible, measureable and valued by all recipients. To overcome this challenge, we implemented a branded Visa prepaid incentive card program that is easy to change as our business objectives shift and that recognizes and reinforces clearly defined employee behaviour.”

Retail gift cards deemed most cost-effective by companies, prepaid cards believed to be most valued by recipients

Survey respondents indicated that the top two factors they consider when designing incentive programs are program costs (23%) and participant satisfaction/positive experience. When asked which incentive program they believe is the most cost-effective, the highest number of respondents (32%) selected retail gift cards. Other responses include merchandise (30%), prepaid Visa, MasterCard or American Express incentive cards (26%), incentive travel (4%) and experiential events (3%).

However, from a participant satisfaction standpoint, when asked which reward they believe to be the most valued by end recipients, the highest number of respondents indicated that they were prepaid Visa, MasterCard and American Express incentive cards (38%), followed by retail gift cards (22%), incentive travel (14%) and merchandise (14%).

About the 2012 Canadian Incentive Trends Survey

Berkeley Payment Solutions conducted the 2012 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 third year, the survey was conducted in May 2012 and polled 767 Canadian professionals from marketing services organizations, incentives firms, human resources consultancies, government, and corporations. It included companies of all sizes and across numerous sectors from financial services and consumer packaged goods to telecommunications, retail, healthcare, media and advertising, manufacturing, and government.

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