The most successful businesses recognise that the more gratitude that’s given to a company, the better it performs. People are, after all, your most valuable resource.
While some firms dangle remuneration and benefits as a carrot for meeting goals, it’s also important to look beyond monetary rewards when showing recognition for a job well done. And this should be integrated into your employee retention strategies to improve the retention rate.
In Michael Page’s Talent Trends 2022 The Great X report, where we dived into how the great resignation has affected the employment market in Australia, and what employers can do to navigate during these unpredictable times, 46% of employers surveyed see the act of gratitude, recognition and appreciation as an important contributor to employee retention.
What is employee recognition, and why does it matter?
Recognition is a way of supporting your staff to let them know their work and contributions are appreciated. It’s publicly acknowledging them for who they are and what they do, making the workplace feel more engaging, inclusive and human.
The Great X report found that just 59% of employees in Australia say that their company cares about their well-being and happiness. Staff are instilled with a sense of purpose and feel valued and respected when they know they’ve positively impacted your business and the team. And as a result, they’re less likely to seek other job opportunities outside the organisation. Now, it’s part of human nature to desire positive affirmation.
In the long run, this translates to higher employee retention and better employer branding — often key factors of consideration for top talent in the market.
Happy employees are less motivated to job hunt
In fact, out of 1,500 respondents polled by SurveyMonkey and Bonusly, 63% of those who were “always” or “usually” recognised said they were “very unlikely” to job hunt in the next three to six months. By contrast, only 11% of those who are “never” or “rarely” recognised would say the same.
The study said 43% of the unrecognised group are “extremely likely” to seek work elsewhere – but only 9% of the happier cohort would. Out of all respondents, 82% stated that they were happier when they were recognised at work, which drives up motivation and productivity by several notches, creating a positive company culture and effective workforce.
Employers need to keep reevaluating their reward policies
Employee recognition has long been a cornerstone of effective management, yet this is an art few have mastered. Proper staff appreciation looks beyond the numbers to value the people behind this success. As such, the organisations worth working for are always reevaluating how they reward their employees.
Sizeable workforces mean less attention is paid at an individual level. Hence, business leaders must constantly rethink the way they keep their employees engaged and fulfilled, and at the same time, support the organisation’s goals and core values. Unfortunately, the larger the company grows, the more this becomes a challenge.
Here’s how you can build an infrastructure around recognition and use it to bolster employer branding and company culture, preserve a more productive workforce, reduce employee turnover and boost employee retention.
3 Tips to create a meaningful employee recognition program for better employee retention
1. Be specific: Make your compliments count
Recognition is always more meaningful when tied to a specific accomplishment as opposed to a generic compliment — be it hitting a sales goal or finally achieving a career breakthrough.
Being specific also makes it easier for employees to relate the recognition to their work and create job satisfaction. This approach encourages them to repeat the successful behaviours while acting as motivation to match, or even better, their performance.
2. Be creative: A successful recognition program doesn’t always have to involve cash
In order to reap the benefits of a culture infused with gratitude, rethink what it means to show appreciation in the workplace. A successful recognition program doesn’t always have to involve cash, which in most cases will only temporarily boost employee morale.
Employees are hungrier for career growth. They want to be rewarded with new professional development opportunities to grow and develop additional skill sets — whether it’s through classes, mentorship programs, online learning platform memberships, or networking events.
Rewarding your employees may be as simple as accommodating personal responsibilities and even side projects in their lives for more work-life balance. Recognition can also come in the form of flexible work arrangements. The Great X report found that 60% of respondents prefer hybrid work arrangements while 28% love working from home.
Companies can implement flexible working schedules that allow employees to balance work and personal life. One way for companies to come across as people-first is to offer flexibility in hybrid or remote work, demonstrating that the employer cares for their employees, which leads to better employee retention.
Now, employers and employees may view flexibility differently. While one may argue that flexibility should be given freely and not dished out as a reward, one should understand that employers need to access the perimeters of offering flexible work schedules, which is dependent on the business model.
3. Be timely: Do it consistently and promptly
In the same way, that old news is far less relevant. Giving recognition months after the work has been done isn’t nearly as meaningful as when it is given promptly.
Late appreciation can even be contrived – or even a last-minute attempt to win back employee trust. Make employee recognition a conscious priority and have formal systems in place, so you won’t miss a timely opportunity to recognise your employees’ achievements.
Related: How to attract talent in 2022
Employee recognition also improves employee engagement and boosts employer branding
According to Gallup, only one in three workers surveyed has strongly agreed that they received recognition or praise for doing good work in the past seven days.
It’s also common for employees, especially top talent, to feel that their efforts are ignored by their managers, and those who do not feel adequately recognised are twice as likely to quit in the next year. With this mindset, it’s hard for employees to feel motivated and gain a sense of accomplishment and value in their hard work.
What top companies like Apple and Google do to give recognition
Apple, for example, is one such company that has understood and recognised the efforts of its workforce as integral to the company’s success over the years. The Cupertino-based firm has offered perks such as extended, paid holidays during Thanksgiving following a very successful year. But it has also thoughtfully customised the reward based on location and job role, by offering employees in different parts of the world the same paid time off during an equivalent holiday.
Google, meanwhile, has created the ‘gThanks’ program, in which employees can give recognition to their co-workers for a job well done. This recognition programme goes even further by allowing staff to nominate each other through the peer-bonuses program, whereby colleagues can receive a bonus of US$175. There’s even a so-called “Wall of Happy”, where staff can place thank-you notes and emails that spotlight their team members' hard work and achievements, to thank and motivate others.
With these initiatives, it’s little surprise that Apple and Google have been consistently ranked highly in Fortune’s “Best Companies to Work For” list and in Glassdoor’s “Best Places to Work” list every year.
The direct link between appreciation and retention shouldn’t be ignored
As one of the key drivers for productivity, employer branding and ultimately, employee retention, effective employee recognition should be an integral part of a company’s HR employee retention strategies. It becomes part of a company’s workplace culture, too. Companies experiencing high employee turnover should review their employee recognition and benefits policies.
A survey by Achievers found that 44% of respondents who were planning to switch jobs cited a lack of recognition as the number one reason, while 69% said that a better recognition program would encourage them to stay.
Implementing the right management tools to keep track of performance and highlight exceptional work will give your employees the extra push they need to stay motivated and stay on in a company — even more so during mentally trying post-covid times.
Discover the latest in our 2022 Talent Trends report, The Great X: This survey report covers what hiring professionals need to know to address talent attraction and employee retention for the year ahead.
It also highlights a change of times in the hiring outlook as job candidates and employees now prioritise their well-being more than ever. Download our report to find out more.