Five trends are shaping the new world of employee recognition.
By Melissa Van Dyke
In todayâs competitive job market, HR professionals areÂ challenged to develop innovative and effective ways toÂ attract and retain talent. Compensation matters, but howÂ a company motivates and rewards its employees also hasÂ a tremendous impact on hiring and retention. More thanÂ 80 percent of U.S. businesses now invest in alternativeÂ awards, and the Incentive Research Foundation (IRF) seesÂ several trends for 2019 that will likely have an impact onÂ these incentive efforts. These trends also offer insightsÂ on how to design effective incentive, recognition, andÂ rewards programsâand how they can give your companyÂ a competitive advantage.
The IRFâs 2018 Trends Study revealed five non-cashÂ rewards and recognition trends that HR should consider toÂ motivate their workforce and enhance their recognitionÂ programs:
- The C-suite is creating a âtalent culture.â Incentives areÂ increasingly embraced by the C-suite as executives becomeÂ more invested in cultivating an engaging companyÂ culture. Empirical research findings are making it moreÂ apparent than ever that when organizations connectÂ work to a larger purpose and mission, emphasizingÂ intrinsic motivation over pay, they outperform theirÂ competitors. IRFâs research offers additional evidenceÂ that when executives combine economic incentivesÂ with recognition and well-designed non-cash rewards,Â they promote âcorporate citizenshipâ behaviors.Â These behaviors and attitudes create the sort of workÂ environment and culture that attracts and retains topÂ talent.
- Predictive analytics and artificial intelligence (AI) areÂ on the rise. Artificial intelligence has already profoundlyÂ changed aspects of human capital management,Â particularly in the arenas of sourcing and hiring. In theÂ incentives field, predictive analytics and machine learningÂ are beginning to help program designers understandÂ who is drawn to which types of rewards, and how thoseÂ rewards should be shaped and presented to produce theÂ best outcomes on an individual basis. Reward programÂ designers should focus on how they can leverage AI andÂ machine learning in their work as soon as possible. In theÂ longer term, they should imagine the various ways theseÂ technologies will disrupt the industry, and even notions ofÂ workforce productivity in general.
- The value of awards is increasing. Incentive travelÂ continues to be a popular award in top-performingÂ companies. Per person median spend in 2018 wasÂ reported at $4,000, while per person average spend forÂ corporate buyers was $8,151 and $5,193 for agencies.Â This wide range and notable difference between theÂ median and the average spend on incentives are theÂ result of a growing number of outliers who are spendingÂ as much as $50,000 per person. The increase in spend isÂ a strong indicator that the C-suite continues to see theÂ effectiveness of incentive travel to motivate performance.Â This is also reflected in growth in spend on day-to-dayÂ rewards and recognition options. The average gift cardÂ value is currently $100, with $25 and $50 denominationsÂ also popular.
- Transformational experiences are key. In 2019,Â transformational travel will continue to push and extendÂ the experience economy even further. TransformationalÂ travel proposes offering highly memorable, authenticÂ experiences while connecting people with a deeperÂ meaning that leads to personal growth. The concept ofÂ transformational travel incorporates concepts of wellness,Â sustainability, community, and personal fulfillment.Â Travelers create memories and stories that last a lifetime,Â are associated with the company that provided the trip,Â and ideally tie into their corporate culture. For high-endÂ travelers and attendees, this drive for connection,Â fulfillment, and self-improvement may begin to trumpÂ other areas of the experience.
- Agility and strategic program design will be the newÂ normal. It will become increasingly imperative forÂ program managers to apply design thinking to theirÂ process. The standard schedule and approaches of theÂ past will no longer meet the needs of a well-traveledÂ and experience-hungry generation. Designing for theseÂ increasingly savvy award winners will press the bounds ofÂ regular program planning, calling on HR to continuouslyÂ test new ideas and incorporate changes quickly. AgileÂ and interactive development techniques have long beenÂ in the technology and product development realms, butÂ these concepts have since extended to HR elements asÂ well. As planners adapt and develop programs in an agileÂ environment, they will need to adopt a design-thinkingÂ mentality with continuous changes and the overlappingÂ of ideas from many different domains.