What Benefits Does an Employee Years of Service Recognition Program Offer?

Jessie Sim

It is important to understand that your employees exchange their time for work that helps your organisation succeed. It is very clear that companies must dedicate resources to increase employee retention and engagement. The cost is too high to not do anything as you’ll risk your best talent packing up and moving on to organisations that will “show them the love”.

Your employees’ dedication deserves recognition on a regular, timely basis. The best way to do this is by increasing employee engagement by implementing an effective Employee Years of Service Award Program.

Service Awards Programs show recognition and appreciation. They recognise your employees’ commitment to your company as well as their performance. Commemorating work anniversaries is one of the most popular types of Service Awards Program. Recognition shared on days of significant milestones make employees feel valued and appreciated, helping them experience an increased sense of engagement and loyalty to your company.

It is important to recognise employees for the quality of their work and appreciation for their years of service. The fact is that any significant length of service represents a major investment by an employee from their life. This choice of investment is something to value, especially when there is a high employee ‘churn’ (and cost of turnover) these days compared with the past.

A joint survey conducted by the Society for Human Resource Management and Globoforce revealed several key findings regarding service awards programs. The survey found that 74% of companies say they have some sort of Service Anniversary Program, and that the number one reason companies have Years of Service Awards Programs is to appreciate employees. However, just 22% of these companies say their program is excellent, with 31% rating it as fair or poor.

How can you strengthen your Service Awards Program?

Before starting your Service Awards Program, or revising your current one, find out what your employees think. Polls and simple email surveys are effective ways to get an idea of how workers feel about the programs. With this data, you can then create programs that are more closely aligned with employee desires.

How much should you budget?

The SHRM / Globoforce survey found that the most effective recognition programs used more than 1% of payroll. It is wise to think about budgets as the recipient. If you were to receive an award for 5 years valued at $50, you might calculate that you are worth $10 per year to your employer. Similarly, a 20-year award valued at $150 might be thought of as $7.50 per year.

Remember that employees are not unintelligent! They will make these calculations to determine how much you value them. The lesson here is don’t skimp on recognising employees.

Which employee anniversaries should be recognised?

Traditionally, companies celebrate major milestones like 5, 10, 20, or 25 years.

The SHRM / Globoforce survey found that:

  • 90% of companies celebrated 5-year anniversaries.
  • 92% celebrated 10 years.
  • 89% celebrated 20 years.
  • 28% celebrate 1-year anniversaries.

However, it is now important to celebrate smaller milestones since what worked yesterday does not work today. In the current employment market individuals stay at companies for shorter periods of time, a trend called ‘Job Hopping’.

Traditionally, employee service awards were awarded starting at 5 years of service and every 5 years thereafter. For employees aged 25-34 the current average company tenure is 2.8 years, which renders the 5-year starting milestone obsolete. Modern Service Awards Programs now often start at the first year. Great companies are starting employee recognition on Day 1, followed up by formal recognition of 1-year and 2-year anniversaries.

Understand that the public and social activities of recognition are what will have the highest impact. During these early years of recognition it is imperative to let younger tenured employees know that they are valued.

For organisations just getting started with service awards, don’t forget to “grandfather” employees into your new service awards program. Remember your 6-year and 11-year employees – even they should receive service awards they have already earned and accumulated! This will mean an increased budget for the first year of your Service Awards Program.

Whenever possible, a service award should be accompanied by a face-to-face presentation where the recipient can be acknowledged for his or her contributions. Award presentations can be group events or one-on-one presentations with the employee’s manager. At a minimum, group award presentations should take place once a year.

Avoid using cash or gift cards for service awards. Regardless of the intentions, cash awards signify compensation by employees, and most spend the money then forget the value. A meaningful service award should serve as a lasting reminder of significant achievement.

Research shows that Service Awards Programs are a meaningful and powerful way to recognise employees. Not only do these programs boost employee morale, they also have long-term positive effects on the organisation as a whole.

Lasercraft Australia has specialised in assisting Companies and Government bodies to recognise employees for over 30 years. Let us use our expertise to help you with your employee recognition program.

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