In an effort to retain top talent and gain a competitive advantage, more Canadian companies are using incentive programs for their employees, customers and channel partners, a new survey reveals.
This year, more than 75% of Canadian organizations provided incentives for their workers, clients and channel partners—up from 65% in 2012. This is according to a study conducted by Berkley Payment Solutions, a major provider of Visa and MasterCard prepaid corporate incentive programs in North America.
The respondents who do not use incentives say it’s because they are too difficult to administer or it is too hard to measure the return on investment (ROI).
More than 62% of the companies that offered incentives this year say these rewards have given them a competitive advantage—up from 53% last year.
Also, the number of firms that implemented incentive campaigns for referrals that could help them get new customers and employees increased to 42.5% in 2013—up from 36% last year.
“In the past, incentive programs were seen as a discretionary spend for many organizations, particularly during tough economic times and budget attrition,” the study notes. However, “today, more companies are seeing them as a way to attract new talent and gain a competitive edge.”
Types of incentives
The report reveals that 63% of polled organizations in Canada offer prepaid gift cards or retail gift cards because they are the easiest to administer and provide the greatest ROI.
In fact, in 2013, the use of retail gift cards for specific stores, restaurants or services climbed to 72.8%, up from 62.8% in 2012.
On the other hand, the use of branded or points-based catalogue merchandise as incentives decreased to 54% in 2013 from 59% last year.
Recipient preferences
The survey shows that prepaid Visa, MasterCard or American Express corporate incentive cards are recipients’ preferred reward over traditional branded merchandise and gift cards—and this is especially true for millennials.
“Recipients want more flexibility in what, how and where they redeem their rewards,” explains David Eason, CEO of Berkeley Payment Solutions. “Greater choice in redemption options for the growing multi-generational workforce strengthens administrators’ confidence that their programs are motivating employees and channel partners in positive ways.”
Cost
While recipient satisfaction and participation are major considerations for companies when they design incentives, cost remains the top factor. Still, there is a decline in this trend. Cost was the top concern for 65.4% of companies in 2013, a drop of 7.6% compared with 2012.
The numbers also show that budgets for incentive programs have remained the same over the past three years. In 2013, 47% of survey participants said their reward budgets were unchanged from the previous year. In 2012, that figure stood at 51%, while in 2011 it was 46%.
Measuring results
The number of Canadian companies that are not measuring the success of their incentive campaigns has gone down. This year, only about 23% of firms said they did not measure ROI—compared with 46% in 2012.
“While this year’s report highlights how the use of corporate incentive programs in Canada is growing and evolving, there is room for Canadian organizations to improve their incentive programs through effective program design, flawless execution and a continued focus on delivering a more measurable return on investment,” explains Eason.
The survey polled 472 Canadian professionals from marketing services organizations, incentive firms, HR consultancies, government agencies and corporations. It included companies of all sizes and across numerous sectors, including financial services, consumer packaged goods, telecommunications, retail, healthcare, media and advertising, manufacturing and government.