How much should you spend on employee service awards?
BI WORLDWIDE recently conducted a service anniversary benchmarking study of 78 Fortune 1000 companies.
We received feedback from 93% of those surveyed and have developed a Service Anniversary Awards Customer Profile from the data compiled.
This study validated a number of observations we have made within the length of service awards marketplace.
Namely, most organisations value and recognise years of service with formal programmes that offer a work anniversary gift or award to the celebrant.
Often, that award is one that can be utilised outside of the workplace in a lifestyle environment. This could be luxury items on your employees’ wish list that they’d find hard to justify buying for themselves or experiential rewards that let your employees get out and experience something like gourmet dining or surf lessons.
It’s not uncommon for the employee anniversary gift to carry the corporate identity or the programme logo, but that approach is becoming less pervasive within the gift selections available.
The study also provided insight into other themes present in current service award programmes, such as:
- Most companies offer long service awards every five years starting with employee anniversary gifts at year five, but increasingly, certain industries are recognising employees at one and three years.
- The majority of programmes feature leadership involvement, including dinner or lunch recognition and reward events, banquets or team events.
- The inclusion of a certificate, plaque or symbolic gift is also prevalent.
- For service award programmes that offered gifts, the respondents with deep knowledge of the programme metrics indicated an average of 85% response rate for the award redemption.
How much are your employees worth?
The average tenure for a UK worker is less than five years. Studies show that after six months at a new job, 40% of employees are already disengaged.
With staggering statistics like these, it’s not hard to see that recognising employee service milestones and implementing other employee engagement initiatives must be an integral part of your organisation’s strategy.
Employee anniversary recognition is a crucial aspect of these initiatives, celebrating the dedication and loyalty of employees over the years.
So just how much should you spend on years of service awards for employees? And what are other companies spending on their work anniversary awards?
The chart below compiles data from a wide range of years of service programmes to give you a clearer picture:
How much to spend on employee service awards
When it comes to long service awards for employees, companies spend, on average, between $15 and $20 per year of service — or between $150 and $200 for 10 years of service. (This doesn't include extra costs like shipping, taxes and company communication pieces that will add to the programme's expense.)
However, there are slight exceptions depending on the length of service. At the one-year mark, service awards have a price tag of $10 to $15. And around the 25-year mark, programme budgets tend to skew higher than this $15 to $20 standard — often reaching more than $26 per year of service at the 35-year mark.
Compare the price of service awards and employee engagement initiatives with other employee costs, and you’ll quickly see that they make up a small portion (0.05%) of an organisation’s annual contribution per employee.
To put this chart in perspective, a five-year service award of $100 will cost $0.0096 per hour or less than 1 cent per hour for recognising more than 10,000 hours of great work.
Celebrate service and employees will stay
Service anniversary awards celebrate longevity and are proven to have a positive impact on employee engagement and retention.
Recognising service milestones at the one and three-year marks shows your dedication to employees early on in their careers. Examples of this include titles such as "Employee of the Year," "Newcomer of the Year," and "Top Performer of the Quarter."
These earlier service anniversary milestones also create a culture that helps to embrace and extend authentic employee loyalty.
Long service awards, given at significant career milestones, further reinforce this commitment and contribute to sustained employee satisfaction and loyalty.
Compare your organisation’s human resources budget to the averages to see where your programme falls along the cost spectrum.
Let's work together to implement your service awards programme.
In partnership with BI WORLDWIDE
BI WORLDWIDE is a global engagement agency delivering measurable results for clients through inspirational employee and channel reward and recognition solutions.
