Companies are reassessing incentive compensation and sales recognition programs as they navigate the aftermath of the pandemic. According to one of our pulse surveys conducted earlier this year, “club” trips targeted to top-tier salespeople appear to be returning to some degree in 2021. About half of the participants plan to restart recognition trips this year, with some necessary adjustments.
But given the uncertainty of the past year, quite a few other companies paused sales recognition trips for 2021 (generally based on 2020 performance) and instead identified substitute awards. And while none of these companies has yet confirmed plans for 2022, many are still taking a wait-and-see approach, underscoring the perception that these trips play a large role in the culture and motivation of many sales teams.
As organizations rethink their recognition programs, we are seeing three general trends:
Among the organizations that intend to resume incentive travel in 2021, common trends include postponing trips to a later date (in the hope the pandemic will abate), restricting travel to domestic rather than international venues, and limiting the number of top achievers who are rewarded through the trip. The organizations canceling the traditional recognition trip for 2021 have utilized a number of alternatives.
Some companies are using cash bonuses equal to the value of the trip as an alternative reward. Although this alternative is generally less incentivizing, since participants tend to prefer exclusive experiences that are hard to replicate over in-kind monetary rewards, it is simple and provides a good-faith effort to make up for the disappointment of the canceled trip.
Some companies may also continue the personalized experiential rewards they offered during the height of the pandemic. Examples include special luxury items and experiences — champagne and caviar delivered to participants’ homes, credits for a gourmet meal to be paid for by the company (which recipients could redeem in a restaurant, if they so choose, or at home for delivery), baskets with luxury goods. All were intended to provide a similar sense of excitement and appreciation as the exclusive trips.
Other companies are hosting virtual recognition events to retain some sense of camaraderie experienced by having a group of top performers together on a trip — although few would suggest that the virtual event truly serves as a substitute for the experience of the trip.
Given the difficulty of eliciting the same emotion as recognition trips, many companies have offered some combination of cash, experiential rewards and virtual recognition meetings.
The situation continues to change — sometimes rapidly. In the several weeks since our research was conducted in April and May, much of the U.S. has now fully reopened, which is likely to lead to a greater comfort with future travel. But globally the picture is still uncertain, and there remain many questions about whether current positive trends will continue into next year or if further health concerns will return again.
Looking into 2022, all participants remain open to the idea of reinstating recognition trips if circumstances permit, but only about half have yet to confirm their plans. Emerging from a year of lockdowns, social distancing and remote working, employers are trying to get sales recognition programs back up and running as soon as possible — suggesting that our post-pandemic “normal” does not signify the end of sales recognition trips, even if we do continue to see some delays, diversions and cancelations in the near term (which are of course are all too familiar to veterans of business travel).