Why Recognition Programs Improve Employee Retention
In a spring 2013 study conducted by the Society for Human Resource Management, the association found that 33 percent of HR professionals indicated “employee retention/turnover” to be a top challenge in their profession.
While attracting top talent to your company is vital, keeping these valuable employees satisfied in their jobs is also crucial to your overall success. A tried-and-true method for improved employee retention is the implementation of a recognition program.
“Turnover costs include productivity losses during training, recruiting and lost work while a position is vacant,” Suzanne Lucas with CBS wrote in 2012. “For all jobs earning less than $50,000 per year, or more than 40 percent of U.S. jobs, the average cost of replacing an employee amounts to fully 20 percent of the person’s annual salary.” Therefore, if an employee with your company earning $48,000 per year leaves, it will cost you $9,600 to fill that vacant position.
“According to the Globoforce Mood Tracker Survey, 80% of workers who have been appreciated are staying the course with their companies, reported Globoforce, a company that specializes in employee recognition strategies for businesses. “Conversely, 55% of employees would leave their companies for a company that has a formal recognition program.” The numbers demonstrate why recognition programs improve employee retention.
Happy Employees Mean Good Business
Simply put, happy employees do not leave their places of employment. Whether you award an Employee of the Month throughout the year or launch a tenure-based incentive program, incorporating regular recognition in your company’s culture will make it impossible for your top performers to leave. Happy employees work harder and better, while improving team dynamics and overall workplace morale. A satisfied employee who enjoys his/her work, gets along with co-workers, and is regularly recognized for a job well done isn’t going to look for other employee opportunities.
Success of Recognition Programs
Developing a recognition program strategy that rewards people on an individual, departmental, and team levels to spread the positive feedback around as much as possible.
Josh Bersin from Forbes notes in a June 2012 article about a comprehensive study examining employee recognition programs, “Companies that scored in the top 20% for building a ‘recognition-rich culture’ actually had 31% lower voluntary turnover rates! This is a huge statistic. Most CEO’s would pay millions of dollars to reduce voluntary turnover (this is when good people leave on their own). It turns out that a well-designed recognition program can achieve this result.”
A business that recognizes its employees’ hard work, big wins, talent, creativity, teamwork, and innovative approaches will find they are not only increasing employee retention, but building a corporate culture that attracts top talent. Rather than wasting time and money on hiring replacements and training newbies, invest in your company’s future with recognition programs that improve employee retention.