In the newly released white paper, Celebrate Careers: An Effective Strategy for Driving Employee Engagement and Retention, O.C. Tanner has found that the establishment of employee recognition programs enhance employee engagement and reinforce corporate values and culture. An additional benefit is the correlation between effective employee recognition programs and a strong return on investment (ROI). Compared to the cost of replacing an employee (found to range from 30 to 400 percent of that employee’s salary), the cost of an effective recognition program costs about 25% per employee, per year.
Highlights from the study include information on the effects of recognition programs on both employee retention and engagement and included:
• Employees who are part of a plan to celebrate service anniversaries expect to work at their company an average of 1.9 years longer than employees who are not part of such a program.
• Effective key service anniversary recognition programs lead to a 4.1 year boost in employee expectations of length of tenure compared to 2.2 years for employees with an ineffective program.
• Effective key service anniversary recognition programs decrease turnover across all generations, especially among employees aged 25 to 44 years (staying 3.9 years longer).
• 58 percent of employees who participate in an effective recognition program think their companies care about them, compared to 29 percent of those without a program.
• 69 percent of employees with an effective recognition program believe they fit in and belong, compared to 51 percent with no program.