Until recently, travel as an incentive had been on a bit of a downturn – corporate scandals, terrorism, more stringent accounting standards and regulatory constraints had put a damper on companies’ and participants’ appetite for travel.
Today, companies have overcome the concerns of the last several years, and travel incentives are not only back, new applications and more participants are driving its resurgence.
Helping fill the benefits gap
The cost of employee benefits, particularly health care, has steadily risen almost to the point of being crippling to many companies. According to figures compiled by the National Coalition on Health Care, in 2005, total national health expenditures rose 6.9 percent — two times the rate of inflation. Total spending was $2 trillion in 2005, or $6,700 per person. In 2006, employer health insurance premiums increased by 7.7 percent — again two times the rate of inflation. And U.S. health care spending is expected to increase at similar levels for the next decade, reaching $4 trillion by 2015.
As a result of escalating costs, many companies have scaled back their company-paid health plans and looking for employees to share more of the burden. The effect of this cost shifting on employee satisfaction is clear. According to a September 2006 Maritz Poll®, conducted by Maritz Research, benefits are extremely important to almost half (48 percent) of respondents; and 80 percent consider benefits to be at least “somewhat important” as a selection criteria for employment. In the same poll, nearly half (45 percent) of respondents with a health plan indicated that their employers had asked them to shoulder more of the costs of their health care benefits within the past year. The paradox is that, while employees without benefits are less satisfied with their jobs than employees who have benefits, they were significantly more satisfied than employees who had benefits reduced or eliminated. So for the sake of morale, a company that finds it necessary to cut back on benefits would be wise to find a lower cost supplement.
More companies are adopting incentive travel as the replacement for other, more traditional benefits. This is because it’s a desired and effective reward for performance. In a 2003 Wirthlin Worldwide Research survey of employees, the question was posed “Suppose your employer wanted to reward your work performance. What would you find most rewarding?” An overwhelming 88 percent indicated “a trip they plan and take with a companion to the destination of their choice.” Another 5 percent indicated “a trip planned for them and a companion of choice with their coworkers,” while .50 percent said they would prefer “a trip planned just for them and their coworkers.”
In a world where employee benefits, once used for recruiting and keeping employees, are shrinking, the addition of travel incentive programs is a viable and valued replacement for lost or reduced benefits.
To be Continued...
