2014 Canadian Incentive Trends survey reveals “incentive gap”

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Use of employee incentive programs remains steady in Canada but many companies give rewards that employees don’t value

Despite the lackluster economy, 69 per cent of Canadian companies are using incentives and rewards to motivate their employees, with half saying their program budget remained the same in 2014, according to findings from the 2014 Canadian Incentive Trends Survey released today.

Results from the fifth annual survey reveal three significant findings:

  • A gap exists between the incentives Canadian organizations use and the incentives they believe employees actually want.
  • Motivating today’s multi-general workforce continues to be a challenge.
  • The perceived difficulties of administering and measuring incentive programs have dropped sharply over the last year.

The results from the survey find that more than half (53 per cent) of those surveyed offer company-branded merchandise, while almost three-quarters (73 per cent) use retail gift cards as incentives to motivate their employees. However, survey participants rank prepaid Visa, MasterCard or American Express cards the highest when it comes to motivating employees. The survey results show that those polled prefer these prepaid cards two times more than retail gift cards and nine times more than merchandise.

“The incentive gap exists because recipients clearly want more choice and flexibility in the rewards they receive,” says Dave Eason, CEO of Berkeley Payment Solutions.

The survey results also indicate that today’s multi-generational workforce can be challenging for Canadian companies when choosing an incentive to motivate employees. While 64 per cent of those surveyed believe their programs take a multi-generational workforce into consideration, 53 per cent find it somewhat difficult to motivate all age groups. Thirty-nine per cent say the most difficult generational group to pick an appropriate incentive for is Millennials.

“Our research over the past five years has shown that participant satisfaction continues to grow as a key measure of success for corporate incentive programs, yet Canadian companies are still offering traditional incentives that they don’t believe their employees want,” says Eason. “This is indicative of the incentive merchandise model that dominates the rewards space. It’s unlikely that administrators are getting the full benefit from their programs if the incentives they choose are not truly valued by their employees.”

Additional industry highlights from the 2014 Canadian Incentive Trends Survey include:

  • Employee incentive and rewards programs are not just for big businesses in Canada, with 64 per cent of respondents indicating they work for an organization with less than 500 employees.
  • Organizations from a wide spectrum of industries in Canada use employee incentives and rewards with 70 per cent of those polled indicating they are in the private sector.
  • Four out of five measure program success.
  • Retail gift cards are perceived as the most cost-effective incentive.
  • Experiential special events or experiences such as concert tickets or sports events are perceived as the least cost-effective incentives.

While it’s clear that budget and lack of awareness hinder Canadian organizations’ use of incentives, perceived difficulties in administration and measurement show a stark correction in 2014 as the incentive and rewards industry responds to corporate needs for ease of use and a more measureable return on investment:

  • In 2013, 22 per cent of respondents cited they did not use incentives because they were too difficult to administer, while in 2014 this number dropped to 10 per cent.
  • In 2013, 20 per cent of respondents did not use incentives because measuring results or ROI was too difficult, while in 2014 this number fell to nine per cent.

“Our fifth annual survey shows that employee incentive programs are getting easier to manage and measure. Innovation in the incentives industry is driving the delivery of new and easy-to-use tools that are cost-effective and save time,” adds Eason.

Finally, the 2014 Canadian Incentive Trends Survey results also find that prepaid cards continue to grow in popularity with year-over-year growth in 2014:

  • 70 per cent of those polled say they use prepaid cards as part of their incentive or rewards program in 2014 versus 63 per cent in 2013.
  • The top reason for choosing prepaid cards is ease of use.
  • Prepaid Visa, MasterCard or American Express cards rank as the top incentive to motivate all age groups, particularly Millennials.
  • Those who measure program success say prepaid Visa, MasterCard or American Express cards provide the highest return on investment.

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