Gallup meta-analysis results suggest that when companies select the top 20% most talented candidates for a role, they frequently realize a 10% increase in productivity, a 20% increase in sales, a 30% increase in profitability, a 10% decrease in turnover and a 25% decrease in unscheduled absences.
Gallup has found that the most highly engaged business units are 21% more productive, experience 48% fewer safety incidents, are 22% more profitable, have 10% better customer ratings and experience 37% less absenteeism. Business leaders agree: according to a Harvard Business Review study, 71% of respondents rank employee engagement as very important to achieving overall organizational success and recognition happens to be the #1 driver of employee engagement.
The COVID-19 pandemic has brought well-being to the forefront as employers are more aware than ever of the impact of mental health on employees and, by association, the workplace. By late March, 68% of organizations had introduced at least one new wellness benefit to aid employees during the pandemic.
In fact, during periods of disruption, employees’ desire for being recognized for their contribution increases by about 30%,” says Brian Kropp, Distinguished Vice President, Research, Gartner. Effective recognition not only motivates the recipient, but serves as a strong signal to other employees of behaviors they should emulate, reinforcing a sense of belonging - further developing a culture of trust, recognition, and shared goals. Here are five no-fail elevator pitches to make a business case for employee recognition:
Why should we consider an employee recognition program?
- Reduced turnover
Companies with recognition-rich cultures have 31% less voluntary turnover than companies who don’t. To get even more granular, employees who don’t feel recognized are twice as likely to quit within a year. The resources it takes to replace an employee can cost anywhere from 16% to 213% of an employees’ annual salary, depending on industry. Things like unemployment tax rate, writing and posting a job description, interviewing candidates, paying referral bonuses, shifting the workload onto existing employees, training new hires, and the negative cultural impact of losing team members all add up.
- More productive (and engaged) employees
Employee recognition makes employees feel valued for their effort and, in turn, motivates them to perform their best. Recognition not only boosts individual employee engagement, but it also has been found to increase productivity and loyalty to the company, leading to higher retention. Regular recognition can reinforce a team's sense of meaning and purpose. Gallup finds that 74% of those who say their team receives praise also strongly agree that they "have the feeling that what [they are] doing at work is valuable and useful." Feeling that your company's mission makes your job important is fundamental to engagement.
Need Executive Buy-in? Download Five No-Fail Employee Recognition Pitches ↓
- Increased connection, no matter where you work
The power of praise can be measured, as the data show. But praise also changes the employee experience in subtle but important ways: Recognition helps individuals accurately assess their performance. It provides the data we need to master new tasks and demands. It creates positive emotions, inspires broader perspectives and stimulates creative thinking -- all at the foundation of innovation. And recognition is one of the most effective ways to connect the needs of the employee to the needs of the organization. Team recognition can inspire trust. Indeed, 66% of those on adequately praised teams strongly agree with this statement: "I trust the colleagues with whom I work on a regular basis." Only about a quarter of employees, 26%, who don't receive team-based recognition trust their colleagues.
- It affects your customers.
According to an HBR study, 77% of companies that prioritize employee engagement report that employee engagement has a direct impact on customer satisfaction. Praising teams can improve quality. Two-thirds of workers on praised teams strongly agree that "quality is always a top priority" in their organization. And workers on praised teams are more likely than those on other teams to strongly agree that their coworkers always do what's right for the customer.
- It’s what employees want & it’s effective
82% of employees think it's better to give someone praise than a gift. The more they are recognized for their work, the more satisfied employees are with their jobs. The number of satisfied employees jumps from 85% to 94% when going from weekly to daily recognition. It’s become clear that supporting employees in their personal lives more effectively enables employees to not only have better lives, but also to perform at a higher level. According to Gartner’s 2020 ReimagineHR Employee Survey, employers that support employees with their life experience see a 23% increase in the number of employees reporting better mental health and a 17% increase in the number of employees reporting better physical health. There is also a real benefit to employers, who see a 21% increase in the number of high performers compared to organizations that don’t provide the same degree of support to their employees.
