Incentive - February 2009 - (Page 32)

RESEARCH The Recession’s Impact Without an upswing, research shows deeper cuts in 2009 By Leo Jakobson 1: The effect on the incentive industry The Incentive Research Foundation’s latest Pulse Survey of incentive professionals, suppliers and corporate end users found that 78 percent of respondents feel the economy will have a “negative impact” on their ability to plan and implement travel programs, and 58 percent feel their budgets will decrease. Half feel it will have the same impact on non-cash merchandise incentive programs, and slightly more than half predict merchandise budgets will decrease. The IRF Industry Trends Outlook, released in mid-December, was performed from Sept. 15 - Oct. 10. The AIG Effect: Fully three-quarters of respondents agree that perceptions of program extravagance will cause changes in their incentive programs, up from 45 percent a month earlier. Overall, 62 percent expect to have fewer qualifiers. More than half expect cuts to their programs’ communications budgets and administrative budgets. 2: The effect on the wider workforce Travel-specific changes Anticipate replacing international destinations with domestic . . . . . . . . . . . . . . . . . . . .56% Anticipate reducing length of programs . . . . . . . . . .49% Anticipate reducing number of participants . . . . . . . .43% Merchandise-specific changes Anticipate decreasing merchandise award value . . .18% Anticipate more use of open- and closed-loop gift cards . . . . . . . . . . . . . . . . . . . . . . . .24% Anticipate adding individual incentive travel awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30% 32 | Human resource and finance professionals from more than 100 countries around the globe say more pain is coming. According to “Leading Through Unprecedented Times,” a survey conducted in November by New York–based consulting firm Mercer, 81 percent of 1,028 global respondents say they expect their firm’s business performance to decline, nearly identical to the 82 percent of U.S. respondents. “Most of these companies have refrained from taking severe and broad-based steps, such as very deep workforce cuts,” says Patricia Milligan, Mercer’s chief markets officer. “Discussions with our clients indicate that more dramatic actions are being considered should the downturn become deeper or prolonged.” That is already beginning. In January, nearly 163,000 layoffs occurred at America’s 500 largest companies, according to Forbes, led by 22,000 at Caterpillar. Still, Milligan says, “It is likely that companies learned important lessons in previous economic downturns about the importance of talent in creating competitive advantage, and so are reluctant to take actions that could hamper their recovery once the economy improves.” The survey showed that 69 percent of respondents plan to continue hiring top talent as previously planned. Manufacturing and technology firms will be hit hardest—48 percent expect them—while only 28 percent at retail and wholesale firms expect deep jobs cuts. Incentive | February 2009 | incentivemag.com http://www.incentivemag.com

Table of Contents for the Digital Edition of Incentive - February 2009

Incentive - February 2009
Contents
Editor's Note
Headlines
The Incentive Survival Guide to 2009
Strategies: Nature vs. Nurture
Strategies: Thank God for the Recession
Research: Industry Trends 2009
Travel News: Where To Go and What To Do
Travel Strategies: Make It Work
Las Vegas: Changing Fortunes
Potentials Here and Now
Merchandise Strategies: Success in Small Steps
The Economy's Down; You Don't Have to Be
Gift Cards Strategies: Flexibility Is the Word
Advertiser Index
On the Web

Incentive - February 2009