Incentive's 16th Annual Industry Roundtable

Incentive thought leaders see a growing focus on engagement and retention

16th Annual Industry Roundtable opener

Every year, Incentive gathers a group of professionals from all sectors of the motivation, recognition, and engagement business to talk about the state of the industry. This summer, 12 participants gathered at the spectacular Langham Place, New York, Fifth Avenue to discuss topics including the growing focus on return on experience (ROE) over return on investment (ROI), changing views of the impact of Millennials, and the growing attention paid to security, as well as what's happening in the merchandise, gift card, and travel awards categories. What follows are highlights of that discussion. One additional point: This conversation took place before the devastation of hurricanes Harvey and Irma, so comments in the travel section do not reflect their impact on those destinations.

This is part one of a four-part article. The other parts can be found below, and one-on-one video interviews of Roundtable participants can be found here.

• Part 2: Travel
• Part 3: Merchandise
• Part 4: Gift Cards



Rhea Stagner:
 The incentive business has continued to be very strong. We are seeing some new business come into the market as well, but we haven't seen a significant increase in the number of participants or number of winners.

Patrick T. Smith: For the last 10 years, the Incentive Research Foundation (IRF) has been conducting a "Net Optimism Survey," tracking the overall mood of the incentive business. Those numbers show that business is very good. Two years ago, it was excellent, right now it's very good. The numbers are still very high, but not quite as high as they were two years ago.

Specific to the luxury market, my business is excellent right now. From my perspective, the incentive market, which represents about 70 percent of our group business out of the United States, is very strong.

Trevor Hanks: Groups are booking further and further out, which is a sign of these corporations' confidence. From the destination management side, our pipeline has never been stronger. They are booking incentives 18 months, two years, sometimes three or four years out because of the lack of space in these hotels.

David Sturt: On the employee recognition side, we continue to see strong demand and increased growth. We have the lowest unemployment rate in 16 years. For the last several years, everybody was just worried about trying to grow, and now it seems like all of our clients are worried about how to keep their talent. For many years people were happy to have a job, and now there are lots of options available to them. And employers are just finding that out, so we're hearing a lot about employee retention as well as the employee engagement side, which has been hot now for some time.

Chris Meyer:
 I just attended the Corporate Event Marketing Association summit, and one of the big topics of discussion was about ROE, not ROI -- the return on experience. That is the conversation they are having with their C-level executives, the boards of these large companies. Oracle was there, Microsoft was there, Salesforce was there, Cisco was there, and that was the big buzzword: ROE, and how they quantify it.

I thought that was an interesting shift, from "I spent this money, and what did I get for it?" to "I've spent this money, what type of experience am I delivering for these attendees, how is it activating against my sales channel, and what [is it doing to bring] more brand awareness, and engaging the brand?"

Katina Athanasiou: Since the 2008 bust, ROI is an expectation. There is accountability -- that has to happen with the organizations that are running these incentives. There is a certain level of ROI that has to be met. And they have to be accountable for it.

Anne DiGregory: When planners talk to our hotels, they are talking about return on experience. They are asking what we can provide that is an individualized experience in a package that the incentive winners can choose from. So, it's not just a walk on the beach, but a power walk with your on-site marine biologist. It's "what can you provide me access to, within this destination, that my incentive winners won't be able to get as an individual?" It's all about the return on experience.

Milton Segarra: ROI will always be there. I think companies are hitting those expectations, and in most cases surpassing those ROI expectations, but what C-suite and key executives are not willing to trade is the engagement and loyalty of employees. In this particular labor market, everybody is looking to get you, and I want you to work for me. What they expect, the ROI they are looking for now, is the engagement and loyalty of that particular employee to remain in the company and perform. That is why we see a lot of human resources departments getting involved in all of these conversations -- in crafting the type of experience they want.

Employee Engagement
 It's no longer just good enough to have a good brand, you need to have a good employment brand. Successful companies, down the road, are going to put sustained and focused effort into being perceived as a good employment brand, beyond just having a good brand.

Sturt: For a long time in the recognition industry, people have been waiting for somebody to do something great, and then go out and reward and recognize them. You hope somebody engages. Engages in what? Engages in actually doing the stuff that creates value for your client experience or saving the organization money. Not only are we seeing an increase in companies looking for ways to fuel that fire after someone has done that, but getting in front of it to say, "What else can we do to create a culture that people feel is going to recognize their best work?"

I just saw interesting research from a client who said, we've been tracking performance and engagement, and putting them together. When you actually correlate that, you can find people that are engaged, like their company, but are not performing. That is a shift that we are starting to see: How do you actually help get to the performance, the action, to the "living the brand"?

Incentives for Non-Sales Employees
 Programs for salespeople are pretty black-and-white. You make a trip or you don't, based on what you've produced. At our company, I know the people behind the scenes are the ones that really drive how good we are at what we do. Whether it's operations, whether it's HR keeping us out of trouble, or the accounting department. It's the intangibles these other departments provide that we really try and incentivize. The people are just as valuable, and a lot of times more valuable. If you want ROI, you put it against what it costs to train someone new compared to keeping them and giving them an extra incentive trip or whatever. It's not even comparable, and so in this unemployment market, without a doubt, we are seeing more and more programs that are not just pure sales, it is all departments.

 In just the last 12 months, I have seen travel programs that incorporate non-sales people. We've had full-ship buyouts for non-sales incentives, which is unheard of. In 20 years I've never seen that, and in the last 12 months we've had three, so that has been a very interesting shift.

Millennials, Culture, and Diversity
 I think we're at the verge of a new generation. I call it Generation "U," which is Generation Universal, in that it's based on interest, based on education. You could be a Millennial, you could be a Baby Boomer, Generation X, whatever. It doesn't matter what your age is. It's how you want to live. Very soon, you will see this type of conversation going from age generations to interest generations.

Sturt: In the research we are doing at the O.C. Tanner Institute, we are not seeing a fundamental difference with Millennials compared with previous generations at that age. When we started talking about Millennials, they were a small group entering the workforce. Now the Millennials make up 83 million people. They are the consumer now. They are not a little, tiny outlier that behave differently than the rest of consumers. There are some things -- certainly the trend for more experiential awards -- that have come up. Some attribute that to Millennial desire, but that has nothing to do with age. That's got to do with life experience -- what you are looking for, what your interests are, and those interests are morphing into the mainstream population of employees, not just the Millennials.

 Diversity is the reality of the global marketplace, and diversity is obviously the reality of the North American marketplace. And, it's not just about traditional diversity. It's more about cognitive diversity and the fact that people think differently, are from different backgrounds, have different life experiences. The fact that they may come from a different ethnic background -- I don't see that as nearly as important.

Athanasiou: The globalization of most companies makes addressing diversity a requirement, so they are trying to figure out how to do it. But I don't think it is as much about the inclusion of diversity as it is about the corporate culture they are trying to drive. Our programs get developed based on that culture. In some pretty big organizations, HR is playing a bigger role in the meetings and incentives world. They are creating innovation teams and talent-retention teams that are working in collaboration with the meetings and incentives arm of that organization to drive that corporate culture.

Corporate Social Responsibility
 We have seen, I'm not going to say a major reduction, but certainly less requests. From the corporate standpoint, we are seeing much less emphasis on CSR. We do about 1,000 programs a year across the country. I would say maybe just 5 percent even ask about it anymore. We still have a very full CSR offering in any destination, but what we are seeing is that it was huge two or three years ago. All anybody was talking about back then was giving back to the communities, but right now there is more focus on the customization and personalization of each individual incentive trip.

Caroline Pidroni: I'm on the SITE Board, and I'm responsible for CSR, and I find it's very, very hard because you try to find an activity to tie into an event where people can participate, but then you have to pay for it, and it's a lot of money. The minimum cost is $5,000 to set up a decent CSR activity. So, do you want to spend it on that or on a good speaker or another activity? People want to give back, people want to be part of a community, want to feel better, but how do you put it together and tie it into a program?