A new report from the Incentive Research Foundation predicts a booming but challenging year ahead.
According to the just released Incentive Research Foundation’s (IRF) 2024 Trends Report, planners are in for a busy, high-pressure year. The good news is that incentive travel is up, with growth projected through 2025 for both the number of people participating in incentive trips as well as per-person spend. But although there’s a net budget increase of 37 percent for merchandise, gift cards and event gifting, program budgets are not keeping up with inflation. “The demands of a changing workforce raise the expectations for incentives to boost engagement, build company culture, and motivate improved performance,” said Stephanie Harris, President, IRF. “As we enter 2024, incentive professionals face increasing pressure on budgets while still developing strategic and creative ways to deliver exciting, motivational programs.”
IRF 2024 Trends Report Takeaways
Inflation. Rising costs continue to impact nearly every industry player. A 2024 increase of $30 per-person spend for merchandise and gift card rewards barely keeps up with inflation. For travel incentives, rising costs for hotel, air and food and beverage constrain dollars allocated to areas such as gifting and DMC services.
Generational change. Together, Millennials and Generation Z (roughly aged 16-44 in 2025) are expected to account for about 60 percent of the workforce by 2025. Incentive and recognition programs are being fundamentally reimagined to motivate employees with values and preferences that are often much different from the previous generation. Programs that utilize points, gift cards and spiffs (sales performance incentive funds) align with younger workers’ preference for frequent and authentic recognition.
Gift Cards. The use of gift cards is on the rise, both in terms of volume and the variety of options available. They are expected to remain a top reward this year. According to the report, the use of gift cards in incentive and reward programs will see a net increase in 2024 spending of 42 percent in North America.
Merchandise. The use of merchandise for rewards and recognition is expected to see a net spending increase of 31 percent this year. More significantly, event gifting—from logo’d company swag to electronics—is surging, with a net spending increase of 47 percent in North America in 2024.
Artificial Intelligence. Although not yet widely used in the incentive industry, ChatGPT and other generative AI is emerging as a game-changer across all businesses. The projection is that AI can be used to enable greater personalization in rewards, tailoring travel experiences and merchandise rewards to specific employees.
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