As the workforce undergoes rapid changes, incentive
and recognition programs continue to be important tools for companies, according to the Incentive Research Foundation’s 2024 Trends Report. The study also reveals other forces — such as budget constraints and the growth of artificial intelligence — that will shape programs this year.
“The demands of a changing workforce raise the expectations
for incentives to boost engagement, build company culture and motivate
improved performance,” noted IRF president Stephanie Harris.
“As we enter 2024, incentive professionals face increasing pressure on budgets
while still developing strategic and creative ways to deliver exciting,
motivational programs.”
Following are the key trends for 2024, according to the IRF:
Incentives Are Increasingly Important in Motivating Today’s Workforce
In the current competitive hiring environment, incentives are a
strong differentiator in recruiting and retaining employees. Incentive and
recognition programs are considered keys to culture-building, and are
instrumental in bringing together a more dispersed workforce. The reach of
these programs is also increasing, going beyond top performers to help encourage the
middle 60 percent of producers.
Inflation Continues to Be an Issue
While program budgets are increasing, they
often aren’t keeping up with rising prices. The allocations often are increased to
maintain a program, and do not indicate incentive program growth. According to
the IRF’s Industry Outlook for 2024: Merchandise, Gift Cards and Event Gifting, companies are increasing their budgets for
these areas by 37 percent. On the travel side, growth is projected
through 2025 for both the number of people participating in incentive trips, as
well as the per-person spend, according to the 2023 Incentive Travel Index.
However, these budget increases often do not keep pace with inflation.
AI is Increasing the Efficiency and Impact of Programs
AI is emerging as an effective tool that enables greater
personalization of incentives, allowing incentive professionals to tailor
travel experiences and merchandise rewards to specific employees.
Younger Workers Have Different Priorities
While most incentive programs have been
designed to appeal to Baby Boomers and Generation X, the workforce is getting
younger. According to the U.S. Department of Labor,
Millennials and Generation Z are expected to account for about 60 percent of
the workforce by 2025. Programs that use points, gift cards and spiffs —
programs to boost sales during a brief period of time — align with younger
workers’ preference for frequent, authentic recognition.
More research on incentive travel trends can be
found in the November 2023 Northstar/Cvent Incentive PULSE Survey.