Incentive spending trends

With the Quality Street already open on your desk, it’s no doubt on your mind that 2017 is looming! But what will change in your businesses? What are the trends in the workplace? We delve into some of the interesting stats in the sector to see what’s ahead.

Small businesses set to see growth in merch budgets

The IMRA Small Business Merchandise Study, produced by the Incentive Manufacturers and Representatives Alliance (IMRA) showed that nearly half (47%) of small businesses using merchandise have budgets of $10,000 or more, and many report their budgets are increasing. Many different types of merchandise are used, and the top types of merchandise used by small businesses are apparel (76%), food & beverage (70%), electronics (58%), writing instruments (57%) and sporting goods (53%)

Travel awards set to grow
45% of all businesses in 2015 were using non-cash awards use incentive travel awards in some manner. This number is certainly set to grow as we head into 2017. A survey at the back end of 2015 showed that overall USA businesses spend $14.4 billion annually on incentive travel

Gift cards are one to watch

According to the UKGCVA, sales of Gift Cards in a B2B capacity as rewards/ motivational tools are up. Overall B2B use of gift cards has seen an increase in 2016 alone of 4.77% – a huge 62% of the total gift card market. The market as a whole is still in growth, in the first half of 2016 it was suggested that Gift Cards were outstripping all wider macroeconomic metrics with a growth rate of 4.44%.

Non-cash incentives rose in 2016 – the future looks bright!

The Incentive Marketplace Estimate Research Study by the Incentive Federation confirms that the non-cash incentives market grew a remarkable 17% since the last market estimate study in 2013. The spend equates to $75.6 billion based on USA businesses and is spread between phycial items, award points and merchandise.

The Autumn Statement – Changes are ahead

We cannot speak about what happened in 2016 and look to 2017 without taking a look at the shakeup of rewards platforms and benefits when in the Autumn statement Chancellor Philip Hammond said the government would abolish tax exemptions on most salary sacrifice benefits schemes from April 2017 saying “Employees who use these schemes will pay the same taxes as everyone else.”

With this affecting gym memberships through to company cars and technology, this is certainly a period of change for the typical routes to motivate and incentivise.

Our prediction will be that the industry of employee benefits will change, with platform providers working closely with businesses to try find ways to maintain benefits that many employees have grown used to.