Should Your Company Have a Service Anniversary Program?

Should Your Company Have a Service Anniversary Program?

Companies have marked employee tenure with service anniversary programs for more than a century, a tradition with roots in the Industrial Revolution, when recognizing long service both motivated people to stay and signaled that the company was worth staying with. The instinct behind it is timeless: people who invest years in an organization want that investment to be seen. So the short answer to whether you should have a service anniversary program is yes.

The longer answer is what actually matters. Done as a generic ritual, the proverbial gold watch or a plaque at year ten, a service award does surprisingly little, and can even do harm. Done well, a tenure milestone is one of the highest-leverage moments in the entire employee lifecycle. The difference isn’t whether you have a program; it’s how you design it. Here’s what separates the two.

Why service anniversaries still matter

Recognition is one of the strongest, lowest-cost levers on retention, and it’s underused. A large majority of employees cite a lack of appreciation as a key reason they would leave a job (SHRM), and the payoff for getting it right is well documented: Gallup and Workhuman’s 2024 research found that well-recognized employees are about 45% less likely to have left two years later, and employees who receive high-quality recognition are roughly 65% less likely to be actively job-hunting. A service anniversary is a natural, unmissable moment to deliver that recognition, a built-in prompt to tell someone their years of contribution mattered. The opportunity is real. The catch is that a milestone only counts as recognition if it actually feels like recognition.

The gold-watch trap: why most service awards underperform

Here’s what the tradition often gets wrong. A generic, impersonal award communicates the opposite of what it intends: a gift that could belong to anyone tells the employee you thought of no one, and an under-invested gesture (a small gift card for a decade of service) can do more harm than doing nothing at all. There’s a deeper problem, too, and it’s worth stating plainly: time served is a measure of longevity, not of impact. Rewarding pure longevity, with no connection to what a person actually contributed, sends your best people an unhelpful message, that effort is optional as long as you stay long enough. The fix is personalization and substance. Tie the milestone to specific contributions the person made, tailor the reward to who they actually are rather than a one-size-fits-all catalog item, and pair ‘years of service’ with genuine acknowledgment of the value those years delivered.

Don’t wait five years

The traditional model has a timing flaw that matters more than ever: it waits. When a program only shows up at the five, ten, and twenty-year marks, it does nothing for the people most likely to leave, because the highest retention risk is early. Modern tenures are shorter, and a great deal of turnover happens in the first year or two, long before anyone reaches a milestone with a round number. A recognition rhythm that first makes someone feel valued at year five has already lost the people who left at month ten. The stronger approach recognizes early anniversaries (that first and third year are critical retention moments) with personalized notes from leadership highlighting real contributions, and doesn’t reserve appreciation for milestones at all. Celebrate the tenure moments, but don’t let them be the only time someone hears that their work matters.

Make anniversaries part of continuous recognition

This is the heart of it. A service anniversary program works best not as a standalone tradition but as the milestone layer within a continuous culture of recognition. Pair it with peer-to-peer, on-the-spot, and social recognition so appreciation is a habit, not an annual event, because the year-round habit is what makes the milestone moment land with real weight rather than feeling like an obligation. Encouragingly, this doesn’t require a big budget: one industry analysis found that about 84% of the most effective recognition programs spend under $100 per employee per year, which means impact comes from thoughtful design, not spending. Tier the recognition so a first anniversary and a twenty-fifth feel appropriately different, personalize it, make sure remote and hybrid employees receive the same quality of acknowledgment as in-office staff, and use a recognition platform to ensure no milestone is ever missed and that everyday recognition flows in between.

The bottom line

Yes, your company should have a service anniversary program, but only if you build it as recognition rather than ritual. Make it personal, connect it to real contributions rather than time served alone, start early instead of waiting for round-number years, and embed it in a continuous culture of appreciation rather than treating it as the whole program. Keep its role in perspective, too: recognition is a powerful complement to fair pay, good management, and growth, not a substitute for them, and there’s a well-documented gap between leaders who believe they recognize their people and employees who actually feel recognized. Close that gap, and a service anniversary stops being a gold watch nobody wanted and becomes what it should be: a genuine, memorable moment that tells your most committed people they were seen.

See it in action

Rewardian helps teams design recognition and incentive programs that drive engagement, performance, and retention. Request a demo to see how.