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August 19, 2011

TRAVEL PLANS:Incentive travel is back on the agenda

After a lengthy downturn in incentive travel programmes, businesses are now starting to jump back into the pool. The Incentive Travel Council looks at how  companies are reintroducing incentive programmes into their business strategies

It was only two years ago that the so-called “AIG Effect” was targeted as an ultimate incentive travel industry scourge. The AIG Effect, relates to the sentiment that emerged out of the ashes of what the media coined “the AIG scandal” – when, after receiving billions of dollars in federal bailout funds, AIG hosted its annual sales incentive travel programme.

Media and politicians were quick to portray the event as inappropriate and lavish and the fallout began. Businesses that had long used incentive rewards programmes dropped them abruptly and scurried for cover from sharp public/shareholder outcry. Other businesses, not wanting to get caught sending employees off to soak up the opulence of lavish destinations, took a different approach – simply moving events to more modest venues to deflect the eye of the microscope. The combined upshot was something of a doomsday scenario for many luxury hotels and facilities as corporations, almost across the board, hastily pulled the plug on scheduled events, seminars and meetings.

“The fact is that, right now – with the economy still in recovery – it is going to take a creative approach to solve issues and achieve departmental objectives. Smart businesses have recognised the connection between lower profit, higher churn, lost opportunities and reduced productivity with their decision to reduce or cancel their incentive and recognition programmes,” says Carol Wain, president of the Incentive Travel Council (ITC) and of Marquee Incentives – a consulting firm that helps businesses find creative ways to optimize employee engagement.


Back on the map: Companies realise incentives are
important to motivate their staff


“It’s a perfect time for corporations to get back to the grass roots value of incentives, particularly travel. Short, mid or long-term, it’s a proven and psychological fact that employees, channel partners and customers respond better to the carrot; not the stick,” she continues. “It’s unfortunate that those organisations that abandoned these investments had to learn the hard way that the people involved and participating in their overall mission are living, breathing assets that want, need and deserve to be motivated, recognized and rewarded.”

Reflecting Wain’s optimism is a recent Society of Incentive and Travel Executives survey, in which more than 80% of those surveyed said they plan to incorporate motivational travel use in the next one to three years. Even more important for incentive and travel industry execs is a current, real-time climate in which companies are, right now, turning toward incentive travel rewards.

Benefiting, right now, from incentive travel
One of many organisations finding creative ways to lean on incentive travel is DriveSavers, based in Novato, California. This 90-employee outfit, founded in 1985, is generally considered the worldwide leader among data recovery service providers. Led by chief executive Jay Hagan, DriveSavers specialises in recovering important data from storage devices and hard drives that have been damaged.

“Sometimes a strength can turn into a weakness pretty quickly,” says Hagan of the business challenges. The average tenure of current professionals at the data storage technology leader stands at 12 years. Hagan acknowledged that such longevity is a blessing, but also a fact that requires DriveSavers to keep a constant eye toward ensuring peak production and optimal workforce motivation.

“The longevity and accumulated skill and experience of our workforce; that is all a big part of the reason why we are able to consistently outshine our competition in categories across the board,” explains Hagan. “But, having said that, it also poses questions: How do we avoid workforce stagnancy? What do we do to try and keep our people fresh and motivated and eager?”

The answer, for DriveSavers, came in the form of an amended incentive travel rewards programme that was designed to accomplish more specific, measured goals. Although DriveSavers had used incentive travel for a number of years, Hagan felt the company needed to reconfigure the model.

“We wanted to move away from a divisive, multi-tiered incentive travel system, and we wanted to make sure that the incentive travel rewards we offered were better suited to meet the lifestyle needs and wants of our employees,” he adds. “For example, we like to work with hotels whose certificates and gift cards have no expiration. For many of our employees that’s a plus because they might save up one- or two-night rewards and turn them into a week-long vacation down the road. Little things like that make our programme enticing and valuable for our employees.”

According to Hagan, the reworked incentive travel programme at DriveSavers has demonstrated itself to be highly effective as a way to increase morale, motivation, synergy and, ultimately, overall production. And in terms of financial contribution, the programme has proved highly effective and efficient.

“Giving a cash bonus, or a fruit basket, just does not cut it for us anymore – it’s disposable,” he says. “The fruit basket, at least the good stuff, will be gone in 10 minutes. And if you give them cash, it will be gone in 10 minutes and they, literally, will not be able to tell you how they spent it. We have found that, in offering incentive travel rewards, we give our professionals the opportunity for experiences they will never forget; something that stays with them, and becomes a permanent part of their narrative.

“There is no question, I know this for a fact, that our telephone group alone pays for our per year budget toward our incentive travel programme,” he continues. “Everything else is just gravy on top for the rest of the employees, company-wide, and just kind of adds to the overall morale. And, trust me, gravy can be hard to find these days even for a company like ours, at the top of our game.”

Group therapy anyone?
Another company doing well to incorporate incentive travel into its corporate culture is Florida-based SFN Group, a strategic workforce solutions company that provides professional services and general staffing to help businesses more effectively source, deploy and manage people and the work they do.

The travel incentive programme at SFN, which focuses chiefly on group incentive travel rewards, is described by SFN’s director, meeting services, Dahlton Bennington, CMP, CMM, as a crucial part of the work culture.

“For us, it is really just as important as the style and setup of the office and the work schedule itself – our group incentive travel programme is mission critical for us,” explains Bennington. “It’s part of the reason we are able to build such great workforce chemistry and, I think, it really contributes to our ability to consistently produce fresh and innovative business ideas. And, obviously, it’s a great way for us to provide really memorable team-building experiences and, also, to reward our top performers.”

The travel incentive programme at SFN is more than a sales-driven incentive. It encompasses the entire realm of the job. The programme at SFN makes use of position - and experience-specific criteria – to make things fair and ensure continuity – and takes into account sales quota, customer feedback and other factors in determining incentive rewards. Monthly updates reveal the top 10 performers, and, according to Bennington, friendly competition towards incentive rewards drives sales and overall quality of performance.

“Everyone on our staff responds well to our group incentive programme, because we provide outstanding destinations and experiences that are really memorable and fulfilling and give our professionals the rare chance to build camaraderie with their fellow workers outside of the office,” she says. “For us, it works so well because everyone is happy. Our employees just love it, and in terms of corporate strategy it just makes sense. Our employees are motivated to earn the rewards and work harder and more efficiently in order to achieve them. And it’s not because they are chasing a carrot. It is because travel makes them happy.”

Muffling the shot heard around the world
DriveSavers and SFN are proving that incentive travel never ceased to be a powerful business tool that creates the ability to inspire and motivate like no other performance-based reward.

While understanding the hesitation of some corporations to come back to incentive travel, Michael Upp, vice president of the ITC and senior vice president at travel consultant Mitch-Stuart, stressed that there is never a good reason to miss the boat on industry-best practices that are proven to improve workforce morale and chemistry and are crucial in optimising peak production.

Upp says that the incentive travel industry knew all along that performance-based incentives work; that they are crucial, and that employers who have not yet come back to offering travel rewards are looking forward to doing so.

He concludes that the companies that stuck with travel incentives throughout have a lot less catch-up work to do, to get current with these effective performance-based reward systems, than those who dumped their programmes overboard in a panic.


Article written by the Incentive Travel Council and edited for MEETINGS:review by Pete Roythorne

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