Employee recognition isn't a new concept. Most business leaders understand that their team is their most important company asset. In fact, the majority of employers have implemented some kind of employee recognition program.
Companies that scored in the top 20% for building a "recognition-rich culture" actually had 31% lower voluntary turnover rates!
Why the disconnect?
Many management professionals often have the right intentions but don't know how to recognize their staff in the right ways. This lack of understanding and poor execution prevents organizations from building a truly recognition-rich culture. This negates many of the positive effects of recognition, leading to increased turnover rates.
In this article, we'll explore why employee recognition is so crucial to improving retention. Then, we'll share five tips you can use today to build a strong culture of recognition and reduce turnover. Let's get started!
The link between employee recognition and reduced turnover
Gone are the days when an employee would hold the same job for 20, 30, or even 40 years. Decades ago, companies could expect, barring some kind of mishap or tragedy, to retain workers for very long periods. The job landscape is different today.
Take a look at these statistics:
- Total employee turnover in the U.S. has steadily risen over the last few years from 15.1% in 2013 to 19.3% in 2018.
- The modern worker, on average, only stays with a company for 4.2 years and will change jobs about 12 times in their life.
- Depending on the position, employee turnover can cost companies between 16% to 213% of the departing team member's annual salary. You can estimate what turnover costs your organization using our cost of turnover calculator.
For organizations without a plan, these numbers can be a shock!
Fortunately, a strong employee recognition program can significantly boost company retention rates. When asked how to improve engagement, 58% of leaders cited giving recognition. Employee appreciation makes a big difference between leaving and staying in a position. It’s a competitive advantage.
This is even more important in a flourishing economy. As more jobs become available, unemployment rates shrink, and remote work opportunities rise, modern workers have become more selective with the job offers they accept. They understand that if a certain job doesn't suit them, they can find another one that does.
Effective, modern employee recognition means providing recognition that’s specific, timely, frequent, visible, tied to organizational values, and inclusive. It means choosing the right channels for communication. If you’re thinking of building or updating your own employee recognition program, take a look at the following articles:
- How to Build and Maintain a Successful Employee Recognition Program
- The Art and Science of Recognition: 5 Best Practices for Employee Recognition Programs
Recognition plays a major role in reducing the cost of turnover, but it doesn’t stop there.
Still not convinced?
In addition to reducing turnover, a solid employee recognition program can also benefit your company in other important ways like improving productivity and engagement.
According to research from Shawn Anchor, employee recognition can raise team productivity by as much as 31%. Surprised? Don't be. A recognized employee is generally a happy employee. Satisfied workers are naturally more productive, both individually and in teams.
Engagement is a recognized problem in many organizations. A study conducted by Psychometrics revealed that 82% of HR professionals feel that improving employee engagement is important. The study also found that 58% of company leaders believe that employee recognition is the key to boosting engagement numbers.
5 quick employee recognition tips to improve retention
We've identified the importance of employee recognition and its ability to reduce turnover. Now, let's discuss five employee recognition tips you can use to improve company retention rates.
1. Prioritize employee recognition
First things first, if employee recognition isn't a priority in your business, you'll never truly succeed in this area. Retaining top workers won’t be any easier, and team morale is likely to take a hit. In fact, employees who do NOT feel recognized are twice as likely to quit within a year as those who do. So first, get your priorities straight.
2. Get your team involved
This tip is two-fold. First, managers should communicate with their team to discover the kind of recognition that they seek. Some employees may desire tangible rewards like gift cards or swag in recognition of their accomplishments. For others, a simple handwritten note would mean the world.
Second, employees should be empowered to recognize and reward one another for exceptional work. A study conducted by SHRM showed that for 90% of people, peer to peer recognition increased workplace satisfaction. The study also found that peer to peer recognition is 35% more likely to produce a positive impact on financial results when compared to manager-only recognition.
3. Make it fun
Employee recognition should be a fun process. If it isn't, you need to reconsider your strategy. Think about ways that you can bring an element of joy and entertainment to your employee recognition efforts. What can you do to make your team smile?
For those with competitive groups, a trophy, awarded to the top performer each week might be the perfect strategy. Other teams may find themed recognition to be a lot of fun. For example, In October, you could offer baseball themed recognition in honor of the World Series.
According to Benefit News, 70% of workers agree that a strong employee recognition program improves team morale. Brainstorm ways to recognize your team in fun and thoughtful ways, and you'll see retention rates rise.
4. Recognize personal achievements too
Your team will appreciate receiving recognition for their work-related accomplishments. But going above and beyond, investing in your employee's lives, and rewarding them for exceptional personal achievements, too, will really help your organization improve retention.
This kind of recognition encourages employees to bring their whole selves to work, which will increase job satisfaction. It will also allow employees to build deeper bonds with each other, improving company culture.
So the next time one of your team members completes a marathon, purchases a new home, or accomplishes some other exceptional task in their personal life, reward them for it.
5. Use a software platform
Finally, we recommend using a software platform to facilitate your employee recognition program. The right solution will enable you to better engage and retain your employees with the following features:
- A monthly recognition budget. Look for a platform that will allow you to set money aside each month for recognition. Then, when an employee receives recognition, allow them to redeem the earned points for real-life perks like gift cards.
- Engagement feeds: Many companies find that recognition given through a social feed is much more effective. This allows each team member to see who is being recognized and for what, keeping them engaged.
- Peer to peer recognition: As we learned earlier, managers shouldn't be the only ones handing out recognition. By giving each employee a monthly "recognition budget" and allowing them to recognize their colleagues for exceptional work, you'll be able to boost both employee engagement and job satisfaction.
- Detailed analytics reports: These days, no software is complete without an analytics element. Make sure the employee recognition software you choose can report on the right people analytics. This information will allow you to see where employees excel, how they’re connected, and opportunities for improvement. You can then use this knowledge to improve team performance and productivity.
If you're looking for an employee recognition platform to help facilitate your company's employee recognition program, look to organizations like SurveyMonkey, ZipRecruiter, and Chobani – they use Bonusly.
As we've just learned, employee recognition matters. It plays a major role in reducing company turnover, as well as improving many facets of the employee experience.
Keep in mind the steps you can use to improve your own recognition culture. First, make employee recognition a priority. Then, get your team involved and make the process fun. Recognize personal achievements as well as work-related ones, and use a software platform to make things easier.
You can reduce staff turnover while improving company culture. Take your first step by appreciating your team and rewarding them. Good luck!