While the anemic economy has caused some companies to shortcut their meetings, many incentive programs will continue to get the green light, industry observers predict. It's all about maintaining morale — and sales.
Bob Guerriero, president of Salem, Mass. — based The Journeymasters, says none of his clients have slashed their incentives, although the number of participants has slipped because fewer have reached their goals. One of his clients is taking its top sales reps on a road rally this October — driving Alpha Romeos through Rome.
“People have won these awards, and it would be a huge disappointment to cancel them. So companies will have to adjust,” adds Susan Lejeune, vice president of the eastern region for Maritz Travel Co., St. Louis. Several of Maritz's incentive clients have substituted domestic destinations for overseas sites, or reduced their food and beverage spending.
In public companies, shareholders will continue to put companies' incentive programs under a microscope, predicts Jim Feldman, president of Chicago-based Incentive Travelers Cheque. He has seen destinations canceled, trips shortened, and group sizes pared down. With stock prices down, he says, companies will think twice before “doing fancy incentive programs for the people the shareholders think are responsible for the equity dropping.”
Clients will also continue to demand more bang for their buck. “I think companies have become more sensitive to how they're spending their money to get a return on their investment, instead of running a program just because they've done it that for years,” Lang says. While most incentives focus on the top 20 percent of their staffs, some of his clients are looking at ways to motivate those performing in the next tier.
Kathy Winter, president of Huntington Beach, Calif. — based Global Incentive Travel, says corporate cutbacks will force her to spend more time educating clients about the value of incentives. “We go back to the basics, how it's not about counting pennies — it's an investment in the employees' future.”