They key to curbing turnover? Employee recognition
Large employers could save up to $16.1 million annually in turnover costs if they have an effective recognition program, according to researchers.
Workplace recognition is vital to the productivity and happiness of employees, yet the majority of employers do not have a recognition program for workers, a new report says.
The report, released by Workhuman and Gallup, calls recognition a core human element of work, one that makes a big difference to workers… and to a company’s bottom line. The report estimated that a large employer (10,000 employees) can save up to $16.1 million annually in turnover costs if they have an effective recognition program.
Related: Being seen: New study says combining recognition with DEI efforts is good for business
“Recognition is a vital investment in your employees, one that builds employees’ value and the value of the organizations they work for,” said a statement released with the report. “When done right, [recognition] reduces attrition and the turnover costs that come with it.”
Too many employees don’t feel seen
The report found that the majority of employees don’t feel their employer does enough to recognize their work and value. Only one-third of employees surveyed said their company has a recognition program in place. About a quarter (23%) said they strongly agreed their organization has a system to recognize professional milestones such as promotions and work anniversaries. The survey found that 15% of employees strongly agree their organization recognized employees for life events such as birthdays, weddings, and other personal events.”
On the other hand, the survey found that 71% of employees who say they are getting the right amount of recognition strongly agreed that their organization cared about their wellbeing.
The results were also mixed among the leadership of the companies in the survey. Nearly half of senior leaders said they did not know what percent of their payroll budget is allocated to recognition, and 81% of managers and leaders said recognition is not a major strategic priority at their company.
Lower recognition levels = lower engagement
The study said that employees who receive recognition only a few times a year from management or leadership are significantly less engaged, with 74% more likely to say they do not plan to be with the organization in one year.
“Fifty-three percent of employees who say their recognition is not authentic are actively looking or watching for a new job, compared to 27% who strongly agree the company’s recognition is authentic,” the study said.
The report recommended a series of steps, including
- Make recognition accessible.
- Make recognition an important part of the culture.
- Train managers on providing recognition efforts.
- Model the behavior among leaders.
- Prioritize recognition by investing time, money, and energy to recognition strategies.
The report concludes by saying there’s room for improvement in employee recognition efforts. “Most employees are not getting what they need from recognition because their organizations are missing the mark,” it said. “By meeting their employees’ recognition needs, organizations can reap the benefits of a more engaged workforce that is connected and empowered to grow and develop. Their employees are more likely to be thriving at work and beyond, are committed to staying and actively promote the organization to others. Overall, they are better employees and feel better as people.”
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