Rethink & Renew Your Employee Years of Service Award Program

Tanya Fish
Tanya Fish

employee receiving a milestone award

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

The benefits of an employee years of service program are numerous and 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 you're implementing an employee service award program for the first time or your company has had one in place for many years, these guidelines offer new ideas for keeping your program fresh and engaging.

Celebrate Early Employee Service Anniversaries

Not too long ago, an employee might receive his or her first service award after 5 years—sometimes even 10 years. Today, according to the 2019 Work Institute Retention Report, only 11% of people you hire will remain at year 10. And, further 38% of employee leave in their first year and by year five, 78% have moved on.

This means the celebrating five-year milestones is pretty much obsolete. If you are recognizing based on service years, it would be 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 leverages milestone data coupled with a creative communications campaign that educates new and long-time employees well before the five-year mark and has allowed ITA Group 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 and more important to tap into the pragmatic, entrepreneurial spirit of their millennial and Gen Z team members to engage them by giving them opportunities to grow, learn, experiment and progress in the organization. This may mean that traditional years of service awards aren’t the right milestones to reward for—and instead learning milestones or career milestones might make more sense.

Some performance metrics that have meaning within the specific roles in your organization can be anything from new logos for sales people, proposals completed for sales support staff, or evaluations complete in a medical setting to clients scanned in retail sales environments or certification completion for engineers.

Whatever the milestone, employers should actively involve and engage these employees through clear, consistent communication that leans into intrinsic motivation and meaningful rewards that fit within the culture of the organization. The key, no two companies should have identical milestones and rewards, and communication should be strong and done with the employer brand and EVP in mind.

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 Effectively & Frequently

Today's milestone awards programs need to be implemented and communicated during employee onboarding and it’s important to build loyalty with employees earlier, more often and in different ways. One of the biggest downfalls of some employee milestone recognition programs is they're forgotten about. That’s why your program needs to be creatively designed and effectively (and frequently) communicated to keep your employees excited and engaged.

Tie in Benefits

Once you attract top talent, it’s more critical than ever to retain it. HRM’s 2018 Employee Benefits Report highlights the importance in leveraging benefits strategically to recruit and retain employees.

When thinking about milestone anniversaries, don’t stop at thank you, also highlight key benefits that are unlocking or increasing as a result of a milestone and communicate them 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 that you offer them as an employee and enhances the overall culture. 

Offer Meaningful Employee Service & Milestone Awards

People are unique and they are motivated by different things. Don’t limit their award choices to a select 10 items or waste your recognition budget on pins and plaques that most people do not value. Not many people are inspired by pins and plaques unless they signify an achievement or are a key part of the culture.

If you already have a jacket, golf clubs and luggage, or you have very particular taste in accessories, select gifts may not be enticing to you.

Offer autonomy in selection by offering a full award catalog of choices to choose from. 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 and they will find this benefit more attractive.

Engage Employees With Experiences

Reward employees with experiences at strategic milestones. People remember how they feel when they receive a reward—and experiences create joy, happiness, excitement and other positive emotions—so lean into how you can create a greater emotional response through experiences. And, because we spend over half of our waking time at work, where emotions and attitudes can easily rub off on our teammates—use stories from experience. According to the Incentive Research Foundation, net increase for experiential rewards has grown to 44% (compared to 28%). The focus for travel is now not only on the destination and venue, but equally important are the authentic, unique, individualized experiences delivered throughout the agenda. The one-size-fits-all, set-it-and-leave-it style of years past is no longer feasible.

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

Giving employees an experiential gift as a thank you or reward is extremely personal—you’re making a connection to their interests showing you care about them as a person and an employee.

With at least five distinct generations served by recognition programs, it is more important than ever that programs are personalized for participants—it may take more effort and thought than simply offering cash or giving a gift card—but it makes a big difference in the impact it has.

Enable Milestone Award Program Management Communications

Many organizations run an employee service anniversary or milestone program, but most of them could communicate better about their program to achieve more effective results. Letting an employee’s milestones pass without any mention can make the employee feel like they are not valued and produces negative feelings. Stay organized and on top of approaching milestone anniversaries.

While milestone awards programs recognize your employees’ contribution to the organization, to make them inspiring and effective, the award and/or praise should be personalized and be aligned the employer brand and culture. When celebrating a work anniversary or other milestone, managers should reflect on the values the employee excels in showing, and all the strides they have made since their last milestone celebration. Integrate your employee milestone recognition program with your overall recognition program platform to get personalized reminders about upcoming milestones and to enable your team to recognize one another for a job well done.

Make It Social

Career milestones and service anniversary achievements are a big deal, especially in today’s business environment. It’s important to make sure every employee is educated and excited about their service award program offerings. In addition to awards, you’ll want to create visibility within the organization of when key milestones are met 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 your organization as a caring employer. The ideal presenter is the company CEO, president or division head, depending on the size of your organization.

Communication will be key, and the approach to getting the news out can be just as fun and engaging to capture their attention. Our client experiences prove that connecting employees leads to happier, more engaged employees who give greater effort at work and are more willing to recommend the company to family/friends. Not only does that help with recruitment but it also means you'll maintain higher retention, which can save companies millions of dollars each year.

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 Proactive Approach to Employee Milestone Awards

Every company should be operating an employee service and/or milestone award program, though the specifics depend on your mission and values. Your program should be strategic to drive behavior in your organization, align with your company objectives and allow for departmental flexibility and corporate oversight. When companies invest in these programs, it has a positive effect not only on retention but also on engagement, culture and employee wellbeing. When years of service award programs were linked to organizational values—in other words, when they reinforced the outcomes and behaviors most associated with the company’s guiding beliefs—the programs were more likely to lead to a higher perceived return on investment among employees.

If you don’t already have an employee milestone award program, consider adopting one. If you do, make sure it is aligned to the participants’ personalized needs and reflects how much your company cares.

As with any awards offered to employees, it’s important to ensure your award offerings align to your organization’s philosophy related to total award amount, tax laws, etc. Not all of these ideas will fit with every organization’s approach. Know that 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 more ideas on how to keep your employees happy, engaged and productive? Download our ebook, 50+ Ways to Motivate Your Employees for Measurable Results.

50+ Ways to Motivate Your Employees for Measurable Results

Tanya Fish

Tanya Fish

Tanya’s focus is on creating innovative solutions across industries that engage the hearts and minds of employees to drive better results. She loves inspiring passion in people, something she believes impacts the individual, the organization and the community. Tanya’s past work and studies on organizational leadership in business, employee health and well-being, culture and health insurance guides her unique perspective on driving organizational health and success. Tanya is driven through achievement, learning and empowerment and balanced by time with family and friends, a good margarita and time outdoors.