North American economic optimism rebounds from near historic lows to 23%, signalling a stronger outlook for 2025. Economic optimism in Europe increased from 29% last year to 56% heading into 2025.
The IRF surveyed 412 industry professionals, with 211 coming from North America and 201 originating from Europe. For the first time, the study incorporates input from channel programs and employee programs, which adds a broader perspective to the analysis. Tracking key metrics, the study provides trends in economic optimism, budgets, and award types for incentive programs.
“North American spending was down in 2024, and incentive professionals were more cost-conscious when using gift cards, merchandise, and event gifts. However, in Europe, per-person spending showed positive growth, with increased use of mid- to high-value rewards,” said Stephanie Harris, IRF President.
“After an uneven year, the outlook for 2025 shows signs of improvement. We see high rates of economic optimism, budget increases, and anticipated increases in the use of merchandise, gift cards, event gifting, and experiential rewards.”
Key findings, benchmarks, and year-over-year comparisons reported in Industry Outlook for 2025 include:
- In North America, 59% of organizations expect an increase in their overall budgets for reward and recognition programs, marking a positive shift from 2024’s financial outlook.
- A striking 74% of European respondents expect an increase in their overall rewards budgets, with only 6% anticipating reductions.
- Technology is a critical driver of growth, and investments in program technology are on the rise.
- Channel programs are spending more on non-cash rewards than employee programs in both North America and Europe.
- Merchandise/gift card program retention is increasing, with a steep decline in program discontinuations in 2024.
- A net increase in the use of merchandise rewards in 2025 was reported by both Europe (57%) and North America (39%).
- Gift card values are increasing in Europe, with third-party providers favouring higher-value gift cards (€211 on average) compared to corporate entities (€179 on average).
- Both North America (65%) and Europe (77%) are anticipating increases in event gifting budgets.
- The design and implementation of incentive programs are driven by the company’s financial forecast, according to over 90% of all respondents.
