6 Statistics That Confirm Employee Recognition and Retention Are Related
By retaining high-potential employees, companies can build a robust talent pipeline and save millions in hiring/training costs. In this article, we discuss six statistics that demonstrate the impact of recognition on retention
Let’s get right down to it: turnover is a major problem that is costing companies millions of dollars every year. Gallup estimates that it can cost twice the annual salary of an employee to replace them. It also says that U.S. businesses lose $1 trillion per year due to voluntary turnover!
To reduce turnover and increase employee retention, companies must invest in the right HR strategies. One such strategy that has gained popularity is employee rewards and recognition. By recognizing employee achievements and rewarding exceptional performance, companies hope to boost loyalty and make their workforces more retention friendly.
But does this method really work?
The answer is a definitive YES. Today, we look at six findings from research and industry surveys that prove how frequent and strategic recognition could help your retention efforts.
Learn More: How to Retain Top Talent with Employee Recognition: Q&A With Cord Himelstein of Halo Recognition
Employee Recognition and Retention Are Linked and These Statistics Prove It
Employee recognition means highlighting positive behavior and efforts in the workplace, both in terms of personal traits and professional achievements.
By recognizing your employees regularly, you can foster a sense of engagement with the work, where employees feel truly motivated to work hard and stay with the company. And this can go a long way in improving your retention rates.
Here are six statistics that show how employee recognition can bring down turnover at your company.
1. 63% of employees who are recognized are very unlikely to look for a new job
SurveyMonkey partnered with Bonusly to find out how recognition and retention are related. Out of 1,500 respondents, 63% of those who were “always” or “usually” recognized said that they are “very unlikely” to job hunt in the next 3–6 months. In contrast, only 11% of those who are “never” or “rarely” recognized would agree.
Regular employee recognition instills a sense of purpose in your workforce. They are, therefore, less likely to seek more meaningful opportunities outside the organization. Further, it builds a line of communication where employees would seek new growth opportunities within the company, without considering a separation.
2. 40% of employed Americans would put energy into their work if they were recognized more often
A survey by OGO found that the lack of recognition has a massively negative impact on how employees feel about the workplace. According to the survey, 82% of American professionals feel that they aren’t adequately recognized for their contribution. This could easily lead to turnover.
By ensuring that your employees are properly recognized, you encourage them to bring their best to work every day. This statistic shows exactly how recognition and morale are related. In the long run, low morale will only lead to a dip in employee enthusiasm, paving the way for attrition.
3. Employees promoted after three years have a 70% possibility of staying with your company
LinkedIn surveyed 32 million employee profiles to create a retention curve, pinpointing the reasons for staying on with a company. The study found a direct link between retention and promotion, one of the most common ways in which your top-performing employees are recognized. In contrast, employees without a change in job roles have only a 45% possibility of retention after three years.
As this statistic suggests, apart from occasional rewards and social recognition, promotions/career progression is a vital recognition method. It tells employees that the company believes in its potential and is ready to invest in their future.
Learn More: 20 Memorable Employee Appreciation Day Ideas for 2020
4. 52% of employees feel that their rewards strategy isn’t aligned to organizational goals
Deloitte’s survey of 9,400 business and HR respondents revealed that employees aren’t happy with the alignment of the rewards strategy with organizational. Specifically, 38% said it was only “somewhat aligned” while 14% said it was not “aligned” at all.
With high turnover rates, companies must revisit their rewards programs in the context of their organizational roadmap. To boost retention, it is vital to go beyond “trendy” perks or occasional gifts and adopt a formalized recognition strategy. Instead, they need to view rewards more holistically, using it to motivate employees and foster meaningful workplace relationships.
5. The lack of recognition and engagement is driving 44% of employees to switch jobs
A survey by Achievers spanning 1,700 respondents found a clear link between rewards/recognition and retention. 55% of respondents were planning to switch jobs, and the lack of recognition was the No.1 reason. 69% even said that better rewards and recognition would encourage them to stay on at the company.
The inference from this statistic is pretty simple – implement performance management tools to monitor performance and highlight exceptional instances. Then, publicly and privately appreciate employees for their efforts. It’s also a good idea to recognize employees via weekly feedback meetings, even if there hasn’t been an instance of exceptional performance. This will keep your average performers motivated and eager to do better.
6. Retention is a key objective for 60% of employee recognition programs
Interestingly, companies are aware of the relationship between retention and recognition. This is why increasing retention/decreasing turnover is a key program objective for 60% of recognition activities, finds a survey of 472 respondents by WorldatWork. In fact, 23% of companies even use a reduction in turnover to measure the success of their retention program.
Going forward, strategic employee recognition with a keen eye on retention/turnover containment will be an HR staple. You could even implement predictive analytics to identify flight risk employees and deploy an employee-specific recognition plan. This will help to cut down turnover for high-performing, high-value talent.
Learn More:
What Is Employee Appreciation? Definition, Strategies, and Ideas, With Examples
Understanding the Value of Employee Recognition in 2020
Last year, we witnessed some of the lowest U.S. unemployment rates in history. And across the world, demand for top-tier talent in specialized areas is constantly rising. This makes it critical for employers to improve and maintain their retention rates, without falling prey to attrition.
Several companies have already got it right. Zappos, GE, and Apple (among others) have a stellar recognition program that can curb attrition and ensure retention. So, in 2020, double-down on employee surveys at the offboarding stage and pinpoint the root cause of turnover.
This will help you reimagine your employee recognition program and intelligently deploy rewards, promotions, and other recognition elements for maximum retention.
Have you used employee recognition as a retention tool? Tell us more about it on Facebook, LinkedIn, or Twitter. We’d love to know about your experience!