It's A Great Time to Try Incentives
"Safety incentive programs are the ones where you can really hit the budget on the head. There really is no reason to be surprised at the end of the year."
- By OH&S Staff
- Jun 01, 2009
Editor's note: Incentive programs
demonstrate their power to produce
better results during a tough economy,
All Star Incentive Marketing
President Brian Galonek agrees. In a Jan. 20,
2009, interview with the OH&S editor, he
said safety professionals are especially eager to
try incentives because they've exhausted the
tried-and-true ways of improving safety metrics.
Excerpts from the conversation follow:
OH&S: This is not a good time for a lot of
companies. They're cutting spending and
workforces. A white paper produced by Selling
Communications Inc. for the Incentive
Research Foundation, titled "Why Incentive
Programs Endure Recessions," talked about
these advantages of incentive programs:
low fixed costs, ability to effectively target
audiences, ease of measurement, flexibility,
and potential for long- and short-term
results. Are you seeing this research borne
out in the current economic environment?
Brian Galonek: Yes. I read that article and I
agree with it wholeheartedly. I do think that
the biggest risk we have for future growth
relates to companies that aren't currently
running incentive programs, getting them
to start something in these economic times.
But certainly with the companies and the
programs we already have out there, we
have had great success; in fact, we had
our best year ever in 2008 with 25 percent
growth over last year.
Quite frankly, our existing programs
look very strong for 2009, as well, with anticipated
organic growth within most of
our safety programs. While the article was
accurate, I can't escape the feeling that the
difference lies in whether it's an existing
program or a company entertaining starting
a new program. We've definitely seen a
downturn in the prospects we've been talking
to that were close to closing. But within
our existing accounts, when you have a
program that's driving incrementally better
safety results, everybody's aware of its success.
They realize, as long as cooler heads
prevail, that it would be foolish to pull the
plug on it. They'll stop spending money
initially but then realize a higher claims rate
that'll cost them more in the long run.
People know these programs work. They
save money and don't cost, if you do it right
and stick with it.
Galonek: I think that's
why there's a lot of discussion
about ROI and
what percentage of incentive
have a measured
ROI. We push our customers
as far as possible
for detailed performance
numbers. We calculate an estimated ROI no
matter what; the only question is whether or
not we're privy to the information that will
allow us to make accurate statements. We
ask our customers to provide us with their
claims rates, OSHA incident rates, insurance
rates, and we help translate those numbers
into dollars and projected savings. If they're
spending $200,000 on an incentive program
and saving $500,000, you know that program
is a success and not one that should be
pulled, even in tough economic times.
Having that information and analysis
ready is obviously great for case studies and
for landing more business. But in this particular
case, where the economy went south
so fast, if you didn't already have [the data],
you might be behind the eight ball desperately
trying to prove ROI in the eleventh
hour in order to save your program.
You probably know J.J. Keller. They have
a service called KellerOnline. They do a
benchmarking survey, and they asked their
19,000 members to renew their participation
in that survey beginning this month.
Particularly interesting to me in the latest
data I saw: Among almost 4,000 respondents,
25 percent have no annual safety
budget at all. It made me wonder not only
what your advice is to a safety director
whose budget is going down 10-20 percent
this year, but also one who has no budget
and needs to justify some spending.
Galonek: I've run into this, even among
some larger companies, but most of the
companies that don't have a specific safety
budget are on the smaller side and might
just pluck those dollars out of operations
as needed. For the larger companies that
All Star deals with, most of them do have
a safety budget.
The question really is, are they willing to
commit some of that budget to something
other than the old standards of training and
PPE? Will they try a safety incentive program?
For far too many companies, the answer
has been no, despite the fact that their
current spending choices are not delivering
the improvements they are looking for. I go
back to the old definition of insanity: doing
the same thing over and over again and
expecting different results.
When we talk to safety managers at
these companies, they have a voracious appetite.
We've exhibited at ASSE and NSC;
we've done webinars with OH&S and are
about to do another one. A thousand people
signed up for the first one, and 650 or so
listened to it either live or recorded.
There is a huge interest out there among
the safety crowd to move the needle, but they
need to know how. They need to understand
that, first and foremost, a properly designed
incentive program improves employee communications
and engagement. It is far easier
to motivate them to work smarter and safer
once you have them engaged.
Back to the definition of insanity: My
experience is that most safety managers
have tried certain things over and over
and over again—from hanging posters on
the wall to reinforcing training, spending
more money on personal protective equipment, take your pick. And they've seen
limited to no results, maybe even negative
results. My first attempt is typically to
say, "Listen, you've tried this, you've tried
that. Everything you've done collectively is
by definition getting you the results that
you're getting. Now, have you tried an incentive
program of this type?"
What I get over and over at these
trade shows is, "Oh, yeah, we give away a
pickup truck every year. Everybody who's
safe every month, we throw their name
in a hat." Typically, what they rattle off
breaks two or three fundamental rules of
what not to do when designing an incentive
You've got to detox them a little bit. You
say, "I know your people tell you they want
cash. I know your people get really excited
about possibly winning that pickup truck.
But you're not seeing improvements. I can
show you how we can get much better results
doing it differently."
Do you get into health incentives? Employers
are very concerned about employees'
health and health care costs.
Galonek: Yes. Wellness is the golden goose
right now. Everybody's talking about it.
Nine months ago, I was still pitching retention
programs; companies were desperate
to hold onto their talent.
Wellness is the one that everybody is
buzzing about now, and for good reason.
You've got the Baby Boomers getting older,
and their health challenges are only going
to grow. We know what obesity rates are in
the country, and we know the direct correlation
between losing weight, being healthy,
and doing a good job.
Absolutely, we are pitching over and
over again that a safety program can really
be a safety, security, and wellness program.
Wellness just dovetails in there nicely. We
know we can support that with a rewards
program. It just makes a great adjunct to an
It makes sense. Even in a recessionary environment,
people obviously see the wisdom
of encouraging better health.
Galonek: If you were to go out and survey
U.S. corporations now about whether they
are currently offering a wellness program
to their employees, you would find that
very few are. I predict that inside of five
years wellness programs will become very
popular, especially among large companies.
Our challenge will be to show that any wellness
program can be greatly improved by
the inclusion of an incentive component
that rewards them for their efforts.
Smoking cessation would likely be a
component of any wellness program, and
last week, The Wall Street Journal ran a
story that showed that smokers at GE that
were offered an incentive to quit were 294
percent more likely to quit within the first
year. The only problem with the study, from
my perspective, is that the incentive they
offered was cash. Imagine how much better
the results would have been with a properly
designed incentive program.
This article originally appeared in the June 2009 issue of Occupational Health & Safety.