WajeezBlog

A recent survey found 39 percent of employers are concerned they will lose top talent in 2013, and 50 percent of employees believe an increase in recognition is the best way to boost retention. Many organizations establish employee recognition programs to enhance levels of engagement and reinforce core company values and culture. Often overlooked is the strong return on investment that effective employee recognition programs can deliver.

According to a recent study commissioned by O.C. Tanner, a leader in the appreciation and recognition business, programs that celebrate key service anniversaries for employees (e.g. 5-year, 10-year, 25-year anniversaries, etc.) were linked to decreased turnover. The cost of replacing an employee can be a significant expense for many companies – ranging from 30 to 400 percent of his/her annual salary. By contrast, an effective employee service recognition program costs roughly $25 per employee per year.

The O.C. Tanner Study and White Paper titled: “Celebrate Careers: An Effective Strategy for Driving Employee Engagement and Retention” also showed:

Employee Retention

• Celebrating key service anniversaries for employees decreases turnover:
• Employees who work at a company that has a program to celebrate key service anniversaries anticipate staying at their current company 1.9 years longer than employees who work at an organization without such a program
• Employees who rate their key service anniversary recognition program as effective anticipate staying 4.1 years longer than those without a program and 2.2 years longer than employees with an ineffective program
• Employees who previously worked at a company that had a program to celebrate key service anniversaries stayed at their previous company 2.0 years longer than employees who worked at an organization without such a program
• The correlation between key service anniversary recognition programs and decreased turnover holds true across generations
• This correlation is especially strong among employees ages 25-44, who anticipate staying 3.9 years longer if their current company has a key service anniversary recognition program

Organizations that implement an effective key service anniversary recognition program for employees can benefit from significant cost savings, given that turnover and onboarding costs vary from:

• Thirty to fifty percent of the annual salary for entry-level employees
• One hundred fifty percent of the annual salary for middle-level employees
• Up to 400 percent of the annual salary for specialized, high-level employees

Employee Engagement

• Key service anniversary recognition programs increase engagement, connecting employees to management and co-workers alike:
• Fifty-eight percent of employees from an organization with a key service anniversary recognition program strongly believe their company cares about them, compared to 39 percent with no program
• Sixty-nine percent of employees from an organization with a key service anniversary recognition program strongly believe they fit in and belong, compared to 51 percent with no program
• Eighty-one percent of employees believe key service anniversary celebrations help them feel appreciated for their work

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