Incentive Federation Study Does Deep Dive into $77 Billion Industry
- New study examines program design by audience, objectives, structure and metrics
-Research analyzes use and importance of success measures
- Key finding: small business is pervasive in incentive space
SPOTSYLVANIA, Va., June 23, 2015 /PRNewswire/ -- As of 2014, Corporate America had increased its incentive spending to $77 billion. Delving into the details behind the growing numbers, a new study conducted by the Incentive Federation, Inc., a top producer of research on the incentive marketplace, finds that "companies that spend more on reward and recognition programs are more likely to believe in the importance of incentives, (and) feel their programs are effective." A key finding of the study shows that small businesses take advantage of incentives with employees and customers – a practice that was previously thought to be confined to larger corporations.
Highlights of the study findings include:
- The most important program design factor, whether for sales, channel or employee programs, is making sure the rewards are received by the right people.
- Small business is pervasive in the economy. The typical company is a small business and spends less than $50,000 per year on its incentive program(s), regardless of the program audience.
- Smaller firms generally report spending less than $50,000 per year on Sales programs. More robust investment in Sales programs can be seen once firms pass the $10 million revenue mark with increases aligned to company growth.
- Recognition awards, events, and gift cards are the most common types of recognition/reward, regardless of the program audience.
- Electronics take the top spot as merchandise awards for Employee programs, followed by food, beverages and apparel. Sporting goods, luggage, watches/clocks and home decor are other categories favored for Employee programs.
- Food and beverages are the favorite merchandise awards within Channel programs, while electronics and writing instruments also make a strong showing.
- Three merchandise categories are prevalent in Sales programs: food and beverages, electronics and apparel.
- The use of technology to administer and/or evaluate programs increases with company size with a little more than one-third of the largest companies having strong program-specific technology in place.
The Incentive Federation engaged Intellective Group of St. Louis, MO to conduct the 2015 Incentive Federation Program Design and Support Study. Using a national sample of business stakeholders from firms with at least $1 million in annual revenue, the study aimed to determine the drivers and frequency of programs, types of awards, supplier use and program metrics. To ensure relevant representation in the study, quotas were used to control the number of respondents by company size with findings statistically weighted to be able to project the results across U.S. businesses.
According to Jessica Tadlock, Managing Director of the Incentive Federation, the study yielded such a wealth of significant results that the Federation plans to explore the issues in a series of white papers for more in-depth analysis of Incentive and Recognition Program Design including:
- Program Goals and Objectives
- Award Program Spending
- Engaging Outside Program Support
- Program Communications, Technology and Reporting
"As the use of non-cash incentives and rewards continues to grow in the agile economy, understanding and benchmarking how these programs are designed and supported is important both for program owners and their partner suppliers," said Tadlock. "We are very pleased that the study yielded a wealth of valuable insights to share with our Federation members and with others involved in the incentive marketplace. Our goal is to spread the information in order to better engage the representatives who are helping to shape this growing industry."
The Incentive Federation will also repeat its study to size the market for non-cash incentives and recognition later this year. "In addition to watching for insightful white papers being released this summer, now is a good time to support the Federation's work, especially our volume study. The Federation volume studies are often cited by many prominent industry players," Tadlock notes.
Organizations interested in the study and participating in the Federation can find more information at www.incentivefederation.org.
About Incentive Federation, Inc.
Founded in 1984 to focus on government affairs, Incentive Federation continues to educate state and federal governments and agencies and has been successful at providing constructive input into tax laws related to the treatment of qualified noncash rewards, in helping OSHA see the benefits of safety incentive programs when writing related regulations, and in helping federal regulators understand that financial institutions have legitimate uses for premiums and incentives. An alliance of associations involved in various aspects of the incentive marketplace, the Federation has expanded into three related domains: corporate outreach, education, and research. More information can be found at: www.incentivefederation.org.
MEDIA CONTACTS:
Sue Voyles
734-667-2005
[email protected]
Jessica Tadlock
Managing Director
Incentive Federation Inc.
703-899-5374
[email protected]
SOURCE Incentive Federation, Inc.
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