The Importance of Employee Recognition

Retaining the best employees can be the key for a company to multiply its growth and achieve its long term goals. A Korn Ferry shows that the cost of hiring a new employee is 50-150% of the employee’s salary. For specialist, senior, and executive positions, this cost can go up to 213% of the employee’s salary. Consistent loss of talent can significantly impact a company’s performance and slow down its business growth.

Companies should make serious efforts to retain their best employees in order to maintain their momentum. One of the key initiatives for employee retention is employee recognition. We have shown numerous stats and studies showing the great impact of employee recognition in retaining as well as improving the performance of the employees.

Impact of Employee Engagement

Organizations with long term employee engagement enjoy huge benefits as it keeps the momentum of the organization going towards achieving its goals. According to a poll by Gallup, organizations which hold their employees for a long time are 23% more profitable, 18% more productive, get 78% less absenteeism and 21% less turnover.

Employees Who Receive Regular Recognition

WorkHuman conducted a study to analyze the behavior of the employees who are regularly recognized. They found that these employees are much more productive than others. The reasons for their higher productivity are that they feel 5 times more valued and appreciated, they are willing to invest in their work 6 times more than others and their chances of staying with the current employers for another year are 7 times more than others. Having these qualities amongst your employees can ensure your organization's long term sustainability and growth.

Most Memorable Recognition

Now that we know the importance of employee recognition, we must also know whose recognition has the strongest impact on the employees. According to a study by Gallup, 28% of the employees reported that the most meaningful and impactful recognition they have ever received was from their manager. Managers should take the initiative to personally recognize the achievements of their employees.

The second most memorable recognition came from the CEOs as 24% of the employees reported in the study. Recognition from top level leadership indicates that the employee’s achievements are not just impacting their individual tasks or their team assignments but it has a direct impact on the goals of the organization. It can boost the confidence level of such employees to immense heights.

10% of the employees stated that their most memorable recognition came from their customers. When employees hear directly from those they serve, it reinforces their sense of purpose. It’s a powerful reminder that their work has a real-world impact.

9% of the employees reported that the best recognition came from their peers. Colleagues working on similar kinds of roles know your struggles and they know what you go through everyday. When they appreciate each other it shows that they are rating others work on a specific assignment more than their own. Organizations should work on building such an environment where employees should acknowledge each other without hesitating.

Conclusion

Employees are vital assets for every organization. Losing employees on a regular basis can lead to huge losses for any organization. Companies should focus on retaining their employees for longer periods in order to keep their momentum going. Recognizing the achievements of the employees can help companies retain and boost the performance of their employees. According to a study, 28% of the employees reported that the most impactful recognition came from their managers.