OPINION Izania Downie: The future of incentives

09/04/2010 by Izania Downie Print

The recent trend of cutting staff motivational events in Europe could well hit companies’ bottom lines when they least need it, says Eventia’s chief executive, who cites Asia Pacific’s healthy incentives sector as the star to follow.

It’s fair to say that most economists believe that the worst is over. We have hit rock bottom and we are now on the steady climb up to a healthy economy again. But it will be a slow recovery, and the business world will never be the same again.

Like most of the marketing and event industries, the world wide incentive market has been affected too – with 76% of the global incentive industry stating that companies are using fewer incentives than in the past (Site Index report). But why should this be a natural reaction? Why do companies think that pulling incentive and motivation programmes at such a crucial time is a good idea?
An engaged and motivated workforce is a key component in any successful business.

The McLeod Review of Employee Engagement states that the relationship between employees and employers should be at the centre of a successful business plan. Businesses should be grasping the opportunity to communicate with, incentivise and motivate their staff, because, if planned and executed correctly, it really does add directly to the bottom line of a business.

Undoing business
Motivational travel experiences are not a ‘jolly’, but an essential cost of sale. We have heard much criticism of the bonus schemes in the City of London, but that’s how this sector of the workforce is used to being motivated. If the banks pulled all bonuses, they would lose staff to the competition. High achievers need to be incentivised and rewarded – it’s an accepted part of their psyche and an acknowledged part of doing business.

A recent YouGov survey of 524 white collar workers concluded that Britain’s leading corporates must make employee engagement their top communications priority as they face demotivated and disillusioned staff (Eventia white paper ‘Getting the Message Across’). The revenue generators are the key to pulling a company through the recession. A company’s workforce consists of the very people who can actually make the difference. Only a fool would think that a workforce will work harder when their incentive programme has been pulled from underneath them.

Asian experience
It is a different story in Asia Pacific: Incentive Connect International, the Australian-based incentive and destination marketing agency, has confirmed that this sector has remained well ahead of forecasts predicted for 2009 by the travel incentive industry. This research is as a result of the company interviewing corporates face to face at several intimate events throughout last year. Information received from participants indicates that in excess of 80% still choose travel as part of their incentive offering and the demand for information on ‘exclusive-to-the-destination experiences’ is growing exponentially.

Incentive Connect International’s chief executive officer, Maureen Brennan, said that Asian countries are increasingly active in the incentive market, the scale of which is indisputably massive. But the sector is still maturing in countries such as China and India. Some Asian agencies hold 600 client accounts and incentive travel programmes with more than 13,000 participants.

A similar face-to-face exercise conducted in the USA indicated that while domestic destinations are preferred, there is a definite increase in 2010 and beyond for the USA outbound incentive travel market.

Izania Downie is chief executive of meetings and events association Eventia.

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