Rethink & Renew Your Employee Years of Service Award Program

Christina Zurek
Christina Zurek

employee receiving a years of service award

An employee years of service award program not only motivates employees to remain loyal to their organization, but also reflects positively on the company for retaining them. But, chances are your service anniversary program is not realizing its full potential.

What Is a Years of Service Award?

Years of service awards can be anything like employee anniversaries and service anniversaries, or service awards, milestone awards, service milestones and length of service awards. No matter the program type, they all describe recognizing employees when they achieve a work tenure level.

The benefits of an employee years of service program include:

  • Driving employee engagement
  • Improving employee and organizational performance
  • Bolstering retention

Eighty-five percent (85%) of companies reported having a length of service program—by far the most prevalent recognition option. Whether this is your company’s first employee service award program or you’ve had a long-running program, these guidelines offer new ideas for keeping your program fresh and engaging.

Celebrate Employee Service Anniversaries Earlier

Not too long ago, an employee might receive their first service award after five years—sometimes even 10 years. Today, according to the 2020 Work Institute Retention Report, first-year turnover continues to be the highest. Over one-third (37.9%) of employees leave an organization in the first year—and two out of three employees leave in the first six months.

This means celebrating five-year milestones is pretty obsolete. The time between initial hire and the first few years become vitally critical. If you recognize based on service years, it’s a good idea to recognize and reward employees earlier in their tenure.

“At ITA Group, we use data-driven analytics to identify key milestone events well before the traditional five-year mark,” said CJ Jacobson, SHRM-CP & PHR, Vice President, People & Culture at ITA Group.

“Our approach recognizes employees for performance as well as significant milestones and is coupled with a creative communications campaign that educates new and long-time employees on the benefits they can expect for future milestones. As a result, we’ve been able to significantly decrease turnover.”

Employees with at least one recognition in their first year of employment in our programs have a 27% higher retention rate than those not recognized.

Consider Recognition for Milestones Beyond Years of Service

As demographics shift in organizations, it will become more important to tap into the pragmatic, entrepreneurial spirit of their millennial and Gen Z team members. Engage them by offering opportunities to grow, learn, experiment and progress in the organization. Traditional years of service awards may not be the right milestones to reward your people for—and instead, performance, learning milestones or career milestones might make more sense.

Your strategy should be tailored to reflect your employee value proposition (EVP) and based on what matters most to your people and business, so no two companies should have identical milestones or ways of recognizing and rewarding them.

Meaningful metrics within specific roles in your organization can be anything from new logos for sales people, proposals completed for sales support staff, evaluations completed in a medical setting, clients scanned in retail sales environments or certification completion for engineers.

Related: An effective, authentic employer brand message resonates with your employees and reinforces what makes you great to work for. Here are our tips on the four can’t-skip stages of a successful employer brand initiative.

Communicate Value of Years of Service Program Effectively & Frequently

Today’s years of service programs need to be implemented and communicated during employee onboarding so you build a loyalty message earlier, more often and in different ways. But don’t just tell them once! One of the biggest downfalls of employee milestone recognition programs is they're forgotten about. Your program needs to be creatively designed and effectively (and frequently) communicated to keep employees excited and looking forward to their next opportunity for recognition.

Tie in Benefits to Enhance Overall Impact of the Milestone

Once you attract top talent, it’s more critical than ever to retain them.

When thinking about milestone anniversaries, don’t stop at thank you. Highlight key benefits that are unlocking or increasing as a result of a milestone and communicate those benefits creatively to make them memorable.

For example, if communicating an education benefit that unlocks at three years, deliver the message with a book light or stylish lenses. Or, if communicating a paid time off (PTO) increase, deliver the message with a selfie stick asking employees to share their vacation stories when they get back to work. Not only will this be one more means of communicating benefits to employees, it also helps enhance the total rewards story you offer, validates the promises you’ve made in your EVP and shows them how you’re holding up your end of the employment deal.

Offer Meaningful & Memorable Employee Years of Service & Milestone Awards

People are unique and they are motivated by different things. Don’t limit their award choices to too few items or spend your recognition budget on pins and plaques if you aren’t sure they are valued by your people.

In our world with endless options to choose from, offering too narrow a selection of gifts can actually diminish motivational appeal and impact of the recognition for your people.

It’s best to provide autonomy by offering a variety of awards. If an employee doesn’t want one big ticket item but would rather have a gift package with two meaningful items, that’s great. Maybe some employees don’t want an award at all—offer them the opportunity to donate to a non-profit. Give them options for a more attractive benefit.

Create Lifetime Memories & Engage Employees With Experiences

People remember how they feel when they receive an award. To really make an impact, think about how you recognize and reward employees for meaningful milestones. For example, go beyond an email—consider the added impact of a personalized, handwritten note paired with special recognition in front of their peers.

For bonus points, incorporate leader or peer-generated stories to boost authenticity of what you share about the recipient during the experiences.

You also can incorporate experiences as awards for the achievement. Experiential awards drive better engagement for organizations and improved wellbeing for reward earners. This is rooted in the psychological mechanisms underlying these benefits—you’re making a connection to their interests showing you care about them as a person and an employee.

Related: When you earn a tangible award, it’s not forgotten. For your employees, the trophy serves as an ongoing reminder of their hard work and your dedication. Learn more about how to transition from a monetary to non-monetary reward strategy.

Enable Leaders to Effectively Recognize Milestones Using a Combination of Guidance and Automation

Letting an employee’s milestones pass without any mention can make the employee feel less valued, producing negative feelings. That’s why it’s especially important you help busy leaders stay organized and on top of approaching milestone anniversaries.

To make recognition inspiring and effective, both he praise and award should be personalized and aligned with your employer brand and culture. To do that, managers should reflect on the values the employee excels in showing, and all the strides they made since their last milestone celebration. But not all managers intuitively know how. By providing examples, specific guidance and templates, you’ll increase the odds of managers expressing their appreciation in the most meaningful ways.

But you know they’re busy, too—integrate your employee milestone recognition program with your overall recognition program platform to ensure managers get personalized reminders about upcoming milestones and know where to find resources.

Be Sure to Promote and Share Achievements

Career milestones and service anniversary achievements are a big deal, especially in today’s business environment. Make sure every employee is educated and excited about the service award program offerings by building enthusiasm across all employees. In addition to awards, create visibility within the organization when employees meet key milestones and recognize service anniversaries at all-employee meetings or a special ceremony. This helps publicize the value of the employee’s contribution. It’s nice recognition for them and showcases you care. The ideal presenter is the company CEO, president or division head, depending on your organization’s size.

Related: Extrinsic and intrinsic motivators such as social contact, belonging, praise and social recognition can be more difficult in remote settings—but there are methods to improve mobile work and accomplish impactful external and personal outcomes.

Take a Personalized Approach to Employee Years of Service Awards

Every company should operate an employee service and/or milestone award program, though the specifics depend on your mission and values. As with any awards offered to employees, ensure the offerings align with your organization’s philosophy related to total award amount, tax laws, etc. While not all these ideas will fit with every organization’s approach, times are changing and employee needs are evolving. A fresh approach to recognizing service awards will make it a strategic benefit offering for your organization.

Want to see this strategy in action? Check out how we helped a retail client re-engineer their service awards program. They were able to increase employee engagement, streamline the fulfillment process and bring new life to how they celebrate loyalty and employee dedication.

Christina Zurek

Christina Zurek

Christina is an experienced leader with a passion for improving the employee experience, employee engagement and workplace culture. Few things excite her as much as an opportunity to try something unfamiliar (be that a project, development opportunity, travel destination, food, drink or otherwise), though digging in to a research project is a close second.