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Multi-generational Workforce Complicates Corporate Incentive Programs

Employee with awardThe wants and needs of Canada’s workforce are rapidly changing as Millennials enter the workplace in droves. Despite the growing and evolving use of corporate incentive programs in Canada, today’s multi-generational workforce is creating new challenges for Canadian organizations looking to motivate employees through their own incentives and awards.

The ‘2013 Canadian Incentive Trends Survey’ says the use of corporate incentive programs in Canada jumped in 2013 with Canadian organizations increasingly using incentives to gain a competitive advantage. Three-quarters (75.3 per cent) of the organizations polled said they used incentives to motivate and reward employees, customers and channel partners in 2013, up 10.3 per cent from 2012 (65 per cent).

Leg Up

Of those surveyed, 62.4 per cent said they did indeed get a leg up on the competition through their incentive programs, up 9.4 per cent from 2012 (53 per cent). Those who said that they used incentives for referrals to acquire new customers and employees went up to 42.5 per cent in 2013, an increase from 36 per cent in 2012. These findings show that incentives are used for more than traditional spiffing of salespeople and distribution channel partners. They are now indeed being used to attract new employees and customers, and gain a competitive edge.

But the survey also found that employees clearly desire more flexibility in what, how and where they redeem their rewards, especially Millennials. After all, how many logoed company caps, sports bags, and mugs do employees really need or want? All joking aside, the important question raised here is ‘how can organizations be confident that their incentive programs are actually motivating employees in positive ways – especially given the growing age gaps?’

Taking a look at our 2013 research, we found there is room for Canadian organizations to improve their incentive programs through effective program design, a focus on delivering a more measurable return on investment, and flawless execution.

This year’s results showed relative consistency in year-to-year budgets for incentive programs: 46 per cent in 2011; 51 per cent in 2012; and 47 per cent in 2013. This indicated that budgets ‘remained the same’ compared to the previous year. While program cost remained the most important factor when choosing incentives, it was down 7.6 per cent from 2012 to 65.4 per cent in 2013. Interestingly, recipient satisfaction/participation grew in 2013, up 11 per cent from 2012 – with 42.7 per cent of respondents indicating it was a measure used to evaluate the success of their incentive programs.

The study also found that more organizations are measuring their results than before. Those that said they did not measure results dropped by 20.6 per cent from 2012. A continued focus on program measurement will enable Canadian organizations to design incentive programs that better meet the needs of their employees while delivering a measureable ROI that demonstrates how incentives contribute to employee satisfaction and success.

More Flexibility

From our research, the selection of branded or ‘points-based’ catalogue merchandise as incentive giveaways was down from 59 per cent in 2012 to 54 per cent in 2013; while retail gift cards for specific stores, restaurants, or services were up significantly from 62.8 per cent in 2012 to 72.8 per cent in 2013. While it might be too soon to tell if the drop in this area could be signalling a diminishing interest in this pillar of the incentives industry, it definitely indicates a growing desire for more valued and versatile incentives.

In fact, for three years running, prepaid Visa, MasterCard, or American Express corporate incentive cards ranked number one as the preferred incentive and, in 2013, 47 per cent of respondents said they were the incentive that most motivated Millennials over traditional merchandise and gift cards. Our research also found that over half (53 per cent) preferred a card with a Canadian bank brand (e.g., BMO, CIBC, RBC, Scotiabank, or TD) on it.

So what’s holding some Canadian organizations back? Our 2013 report found that concerns about program administration and measurement are the culprits. Almost one quarter (22.8 per cent) of those polled cited ‘too difficult to administer’ as the reason they did not run incentive campaigns, up from 13.7 per cent in 2011 (up 9.1 per cent). Those who cited ‘difficult to measure results or ROI’ went up to 20.2 per cent in 2013, an increase of 7.6 per cent since 2011.

Our research tells us that program administrators are looking for ease of administration to improve their programs, as well as the ability to measure return on investment (ROI) for their campaigns. For example, 63.2 per cent of those organizations that ran incentive programs offered retail gift cards for specific stores and restaurants or prepaid Visa, MasterCard, or American Express corporate incentive cards, citing they are the easiest to administer and provide the greatest return on investment.

Addressing The Challenges

Turnkey, third-party administered prepaid campaigns, can be the ideal solution for those who are too busy to design, manage, and measure their own in-house campaigns. They can make planning and launching a prepaid card program easy, providing all the services needed – including planning and designing the program; setting up the program; reporting program analytics and results; setting up secure payment options; and getting cards out the door.

There are many different prepaid options to choose from, so be sure to consider your objectives and the reasons behind your program. Knowing your goals will help your third-party provider build a program that helps you achieve them. Here are some additional items to consider:

The use of corporate incentive programs is growing and evolving, making it an exciting time for organizations to motivate employees through programs that meet the needs of both the recipient and the business. Greater choice in redemption options for the growing multi-generational workforce strengthens administrators’ confidence that their programs are motivating a multi-generational workforce in positive ways. The programs that are effectively designed, measured for ROI, and flawlessly executed will well position Canadian organizations to attract and retain employees, customers and channel partners. For the survey, see 

Dave Eason is chief executive officer at Berkeley Payment Solutions.

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