As hiring freezes thaw and companies are once again vying to hold on to top performers, incentive programs have become a paramount differentiating factor in a corporate environment where loyalty is more elusive than ever.
According to a study by Towers Watson on global talent management, 59 percent of the organizations surveyed are experiencing problems attracting top performing employees, and 50 percent of companies are having trouble retaining those employees once they’re in the door.
Lisa Gracyalny, CMP, CMM, Executive Director, Events and Recognition, Seacret Direct, Phoenix, AZ
Research on incentive travel has consistently shown that it is one of the top employee performance motivators, but as of February 2009, a survey of 400 corporate executives by Oxford Economics found that 51 percent had decreased their business travel budgets by an average of 35 percent.
For companies today, incentive travel is a key way to increase loyalty without increasing compensation. In its examination of the ROI of business travel, Oxford Economics found that “Executives stated that in order to achieve the same effect of incentive travel, an employee’s total base compensation would need to be increased by 8.5 percent.” Forty percent of employees surveyed confirmed that they perceive a strong relationship between travel and staff retention.
“I think incentive travel is getting better, and there is more activity with it. I’ve been in this industry for a while, and it slowed down dramatically for a while,” shares Lisa Gracyalny, CMP, CMM, executive director of events and recognition at Phoenix, AZ-based Seacret Direct. “Now, we have so many competitors that we have to look at what they’re booking so we’re not doing the same place. Our competitor went to Cabo last year, so I can’t go there because it will seem like we’re copying them.”
More than ever before, incentive travel planners are using destination selection to differentiate themselves and motivate employees. In its recent white paper on “Integration of Offsite Business Meetings and Incentive Group Travel,” the Incentive Research Foundation (IRF) announced the results of a study conducted last fall polling 200 incentive program planners and 1,000 program participants. Its main finding on motivation? The attractiveness of the destination is the single most important factor in motivating award earners.
A few decades ago, that would have meant a pristine beach somewhere with perfect weather, but “clients realize that there are only so many Florida beaches,” notes Susan Adams, director of engagement for New Brunswick, NJ-based Dittman Incentive Marketing. “This year, for the first time since the recession, we’re seeing much greater interest in getting abroad and traveling internationally. During the economic downturn, programs were pulled back closer to home. After many years of choosing domestic locations, clients realize that for motivating and fresh programs, they may want to look farther afield. This new trend is great from a planning perspective because it gives us a lot more to work with.”
Adams has found through her research for Dittman and being on the boards of the Incentive Marketing Association and the Performance Improvement Council that the shift towards international travel doesn’t reflect a return to the same European destinations or outright luxury, but rather, a highlight on unique destinations that may not even be on an award winner’s radar.
“Everyone is looking for the next thing. It’s trending to who can be more creative and more exotic,” agrees Gracyalny, who developed incentive programs for Freelife International and an independent firm before recently joining Seacret Direct. “People aren’t afraid to go to different countries anymore. There was a huge shift from Mexico to the Dominican Republic. And now it’s Costa Rica, Panama and more South America countries.”
In many companies, attendees’ willingness to explore unknown destinations underlies an implicit trust in the company reputation for incentive travel and its planners. “I’ve had district managers tell me that, ‘We will love whatever destination you select, because wherever it is, it is not a trip we could take on our own,’ ” says Gia Staley, manager of meetings and events at Fort Worth, TX-based Smith & Nephew (Biotherapeutics).
“These people already go on vacations of their own that are nice, so it’s exciting for me to hear that these trips are really, really motivating them to sell,” Staley adds. “That increased motivation and output, and the fact that once they go, they feel like they have to go again, more than pays for the incentive trip. In our company the incentive trip is not just a trip that you win when you make your numbers. You make your numbers to go on the trip.”
Gia Staley, Manager, Meetings and Events, Smith & Nephew, Fort Worth, TX
“A trip we can’t take on our own” is a refrain that successful incentive planners are hearing again and again from repeat attendees.
The need to create a unique experience — different both from what planners at other companies are doing and from the trips award winners take during their own leisure time — is driving planners to think outside the box, not just of exotic destinations, such as Thailand or Bora Bora, but often of new ways of experiencing places closer to home.
“I know for me, I love to take my group somewhere they wouldn’t go on their own,” says Gracyalny. “They strive harder to get on that incentive when you do something different. We did a trip in Alaska two years ago and, at first, nobody was excited about it, so we took the leaders there for a site inspection and had them talk about it. It just built and built the excitement, and then we had a huge group who qualified for it, and we had to turn people away because we could only take the top 50.
“After that, they thought it was the best trip they’d ever been on,” adds Gracyalny. “If you’re taking a vacation, you probably won’t look at Alaska, but people were so excited and happy that they did go on it. They said, ‘This is magical, and I never would have picked this destination on my own.’ That’s the key: to come up with really good places that they wouldn’t choose on their own and can go for free.”
Some of Staley’s most successful trips have relied upon reintroducing people to places they thought they knew — with a new take sure to motivate attendees. “People love the beach. They love Hawaii and the Caribbean, but I wanted to take them to Europe, and we did Italy in 2007, and people loved it. They didn’t know what they were missing,” Staley explains. “To be able to take people on a private tour of the Vatican or to have dinner in the Eiffel tower or rent our own yacht on the sea in Greece isn’t something they could do on their own, and that’s the Europe I want to give them.
“Our incentive trip in May was to Paris, and we had announced the Barcelona trip for 2014 in February,” Staley continues. “I was talking to one of our district managers before we even got to Paris, and all he could concentrate on was Barcelona. He was thrilled about making the trip to Paris, but he was focused on the next year at work, selling!”
No matter how interesting the destination, if it’s at odds with company culture, it doesn’t ring true and motivate employees. “Increasingly organizations are branding internally, in communications and events targeted to their own employees,” Adams explains. “Every decision, from pre-trip materials to the color of beach towels, is all driven by the organization’s brand and message. This is to ensure that there is the greatest possible alignment between the employee experience and the brand values.
“Program design is something we work on with a client year to year,” Adams continues. “Feedback covers a wide range: meeting content, speakers or no speakers, more beach time, more family time, more face-to-face time with senior leaders. It depends greatly on the audience and the program. We have to balance those individual needs with the goals of the organization, so I don’t see a solitary trend emerging from that, as it can be radically different from one corporate culture to another.”
At Smith & Nephew, incentive trips are so integrated into company culture that Staley brings a professional photographer who is a published author and illustrator on all of their trips to create a coffee table book celebrating the experience. “It’s a gift and a keepsake of the trip, and it’s also something our human resources department and management use when they’re in the hiring process,” she says. “It’s a high-end book, top quality, and attendees keep it in their homes and their offices and are proud to show potential new hires and other people in their network just what type of company we are and how well our salespeople are rewarded.”
Beyond integrating trips into organization culture, some companies are centering their trips on it. Seacret Direct creates bath and facial products using minerals from the Dead Sea, so Gracyalny decided to create an incentive trip aligned with the company’s roots. “My company is an Israeli company, so we’re taking our top 10 leaders to Israel this year, which is a different kind of place to go,” she says. “Our products are from the Dead Sea, and we’re going to take them to go float in the Dead Sea. This whole trip is geared towards our company.”
In some cases, however, staying true to your culture and your attendees’ interests can mean staying closer to home. “Having worked in different industries, working in agriculture is a little bit different,” says Tanya Zuckerman, CMM, CMP, senior manager of meetings and events at Research Triangle Park, NC-based Bayer CropScience LP. “We focus more on second- and third-tier cities, just because of who we are as a company. It makes more sense because it brings us closer to our attendees, and we’re able to get more of them there on less of a budget.”
One of the main ways companies incorporate their corporate culture into incentives is through a meeting element, whether casual networking with executives, formal training or strategic summits. However, it’s unclear whether meetings have a role in incentives from the attendee viewpoint. “There is a debate around whether or not to hold meetings during incentive programs. Some think it’s a great idea to communicate a strong message to the organization’s top employees. Others are concerned that it’s not really a reward if you’re in a meeting all day,” says Adams.
IRF examined the combination of meetings with incentives this year and found that only 10 percent of respondents combine meetings and incentives for perception or fiscal reasons, and more than four times as many are doing so to maximize the advantage of having high performers and executives in the same place at the same time.
For Smith & Nephew, this is the primary motivation behind combining meetings with incentives. “We conduct an intensive business meeting on the first morning of the trip for all sales reps, district mangers, regional directors and our attending executives, because this is an opportune time to tap into the best practices of our top performers. This meeting is critical to our business, because our top performers know that they can speak candidly about issues — both good and bad — that are affecting their business and that they will be addressed with a formal action plan by executive management. Most groups I know of dread the business meeting on an incentive trip. Our attendees look forward to it.”
However, IRF’s white paper also uncovered a startling difference of perception between attendees and planners in terms of the amount of time spent in meetings. According to the study, “Meeting planners overall noted that they restricted meetings to less than 20 percent of the combined event. However, award earners felt a considerably higher percentage of their total trip was spent in meetings. Almost as many award earners reported spending 40 percent or more of their time in meetings as those who said they spent 20 percent or less. This finding could either mean the award earners perceive the time spent in meetings to be longer (because they are not experiencing value) or that planners underestimate meeting times.”
Adams has found that how much time is spent in meetings during an incentive matters less than the meetings’ purpose. “When meetings are valuable and advance program winners’ careers or their understanding of the organization, they are happy to have them,” she says. “When they are just meetings for the sake of meeting, that don’t tie-in to improvement of one’s work life, they fall flat. Content really matters here. Onsite, I personally don’t see a lot of grousing about meetings if there’s purpose behind them.”
Zuckerman concurs. “What I’m seeing more and more of is collaborative discussion; it’s not necessarily a speaker speaking at someone,” she says. “We’ve had greater success with the response rate if the audience feels like they were part of the conversation. It’s about collaborative learning vs. lecture learning.”
An attendee’s desire for casual interaction extends beyond the meeting segment of incentive trips. Planners are finding themselves re-evaluating the activities of their entire itineraries based on award-winner feedback. “We did a scavenger hunt one time, and someone said, ‘Never do that again,’ ” Gracyalny says. “And some people just want to do nothing, so we certainly make that an option. They can skip the tours, they only have to go to the meeting part.”
However, as attendees clamor for more free time and choice in their itineraries, planners struggle to come up with activities for times that the whole group comes together that suit diverse interests. “One challenge we face is finding new, dynamic networking activities for attendees to participate in,” Zuckerman shares. “We don’t want activities that look fluffy. We want activities that really help us achieve our business objectives — activities have to allow for networking and business rather than just have a theme. Our attendees don’t respond to themed nights. You need some activity that lets them come and go as they please. I haven’t seen anything new and exciting that has worked, which is why we keep going back to casino nights.
“It’s become more challenging to stay creative and provide attendees with a new experience within existing budgets,” she continues. “We use a lot of internal resources, and our team is very crafty. We will often organize a lot of things on our own going directly with the wholesaler rather than through a DMC. Ultimately, it’s harder and more time consuming on our end, but the only way to do the things we want to do is to go out of the box.”
Through all these changes — a need to research new destinations, re-evaluating program design and refocusing activities based on attendee feedback—many planners are facing relatively static budgets despite rising costs.
Zuckerman sees the pricing issues, particularly in the hotel industry, as an effect not only of a post-recession rebound, but changes in the meeting industry. “I think that peak times are becoming more similar throughout the industry, if not slowly disappearing,” she says. “There used to be ups and downs in our industry where you’d see people not booking as much, but I think hotels are seeing more opportunities and multiple requests over the same dates.”
Adams says that to compensate, planners are doing more legwork to zero in on a destination before putting out bids, as well as nailing down blocks the day dates are confirmed, and Zuckerman agrees. “We try not to flood the system with requests,” she says. “We’re not overbidding with 400 requests. We’re really looking at the market we’re going to to find out what really makes sense for our business and ourselves. Otherwise we would be looking at thousands of hotels, and we have very tight turn around.”
As planners today strive to create incentives that top the previous year — whether that means a bigger and better destination, a trip that allows attendees more time with their loved ones or a climate that allows more casual interaction with fellow top performers and executives — one thing remains constant. “The most important tools for planners today are thoughtful strategies on how to best inspire the participant audience while remaining aligned to the organizational goals,” says Adams. C&IT