Rewards and Recognition Market Intelligence

*This report was last updated in Q4 2018. Please click on request customization if you are looking for an updated version of this report

Table of Content

  1. Category Intelligence Summary
  2. Market Overview of Rewards and Recognition
  3. Market  & Buyer-Supplier Trends of Global Rewards and Recognition Programs
  4. Growth Drivers and Constraints
  5. Engagement Models
  6. Sourcing Models & Sourcing Strategy
  7. Pricing Models
  8. Spend Analysis
  9. Cost Saving Opportunity Globally & Negotiation Levers
  10. Case Studies
  11. Supplier Shortlisting Criteria and Profiles
  12. Ranking order of Primary Suppliers
  13. Detailed Supplier Profiles

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Regional Market Outlook on Rewards and Recognition

Non-cash awards are expected to grow as the focus on brand, culture, and innovation  becomes more critical for business success. Gift cards will gain momentum in 2018. Mid-sized firms spend an average of nearly $500,000 annually on gift cards across all programs, whilst Fortune 500 companies spend over $1 Million annually. Top-performing companies feature higher non-cash incentive payouts annually for the average employee.

In the US, 84% of organizations use tangible non-cash rewards . This represents more than a three-fold increase from 20 years.

trends-rewards-recognition

Reason for the shift from Cash to Non-cash rewards:

  • This gain in popularity and use of non-cash, tangible rewards is due to a growing understanding of the advantages accompanying tangible non-cash rewards.
  • There are psychological mechanisms underlying these benefits.

Market Trends of Global Rewards and Recognition Programs 

Professionals in the non-cash rewards industry keep undergoing a large amount of transformation.  From cultural changes to technical developments to an enhanced emphasis on risk and safety

Developing a brand-asset culture is a corporate necessity

  • Non-cash awards to increase as organizations concentrate on brand, philosophy, and modernization.
  • Companies with non-cash award programs must guarantee these programs are recompensing in several parts, brand-centric actions, flexibility, and revolution.

Social Recognition becomes a necessity

  • Almost 40% of programs are now using social recognition.
  • Employee engagement sponsors demand for social recognition benefits/value.
  • Technological advancement, cloud computing, social media proliferation, and a wide array of automation tools have made social recognition a reality.

Integration

  • Programs' power increases when they are integrated with other platforms such as SaaS, VR technology, AI etc.
  • 34% of program owners have expressed, they are now integrating their programs with their sales force system

Growing capacity with progressively predicative analytics and intelligent technology

  • Using predicative analytics, meeting planners can collect data throughout many events.
  • They have a valued solution to uncover current in-house corporate data, forecast broader individual company patterns etc.

Gift cards continue to increase

  • Employee reward programs are the largest category for R&R programs and the average spend will maintain and improve.
  • The simplicity to obtain gift cards has influenced employees use in non-cash awards programs.

Products shifting to organic, local-sourced and custom-made

  • Employees obtaining awards look for a profound reason for choosing a product, which has shifted the goal for products to be sourced locally, and simple to tailor.
  • Rewards matter to employees when it has an individual significance and a customized distribution accompanying it.

Growth Drivers & Constraints  

The increase in 22% of Gen X, Y, and millennial workers have changed the whole landscape of the R&R offerings. High attrition rate and turnover also fostered the growth of the industry. Recession and economic slowdown along with the risk of data pose a threat to the industry.

Growth Factor

  • Talent Management - Due to the shortage of skilled and efficient manpower, organizations are increasingly adopting R&R programs for better human capital management.
  • Better Employee Engagement - It is estimated that about 75% of employees in an organization feel that R&R programs of any type boosts the morale of employees, thus, resulting in enhanced job satisfaction and improved motivation.
  • Shift of HR from Technical to Strategic Model - Organizations expect HR employees to undertake strategic activities from regular tactical activities.

Constraints 

  • Budget Constraints in Implementation - R&R programs involve HR and finance departments to allocate budget appropriately, but during financial crunch, organizations impose budgetary constraints.
  • Time Constraint to Implement Recognition Ceremony - Time constraint is a challenging factor, as HR employees and mangers have to manage the R&R programs in-house. 

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