Updated: Mar 5
44% of employers agree that employee recognition is important. But as the list of competing business priorities grows, it can be easy to let employee appreciation fall to the bottom. However, there is compelling research that shows why recognizing employees is vital to companies’ overall success and can actually improve the bottom line. With this is mind, here are a few areas to consider as you weigh the importance of an employee recognition program for your business.
Reduced turnover, higher retention
Employee turnover is expensive, with most companies measuring the overall negative impact in the thousands of dollars per employee. Add on top of that recruiting, hiring, and training new employees, and the overall cost can really impact your bottom line.
Employees who do not feel recognized are twice as likely as those who do to say they'll quit in the next year. That is bad news when you consider the current war for talent. 47% of HR professionals surveyed in the 2018 SHRM/Globoforce Employee Recognition Report said employee retention/turnover is the top workforce management challenge they face. Coming in a close second, 37% cited recruitment as their top challenge. Strong employee engagement and recognition programs can differentiate you as a great place to work, helping you to not only retain your current workforce but also attract new talent.
Increased employee productivity
Studies show that employees who are adequately recognized are happier. People want to be acknowledged for the good work they do as well as feel their work provides value and is appreciated. It is human nature to seek approval and praise.
Employee recognition is a key driver in motivating employees in the workplace, with 78% of employees reporting they would work harder if they were better recognized, according to Globoforce. And research by economists at the University of Warwick back that up. They found employee happiness led to a 12% spike in workplace productivity. To put it simply, happy employees are productive employees, leading to a more efficient workforce overall.
More satisfied customers
It also should not come as a surprise that the way an employee feels about their job reflects in how they interact with customers. A happy employee can spread their goodwill to your customers. Conversely, when an employee doesn’t feel valued, that can negatively spill over into customer interactions too.
Globoforce found that 41% of companies that use recognition programs have seen positive increases in customer satisfaction. When employees feel valued, they are more willing to go the extra mile for your customers, leading to an increase in positive customer sentiment and sales.
The data is compelling: adequate employee recognition drives increased productivity, reduction in business costs, and increased sales. Crew customer, Grand Petroleum, focused on growing their company culture and saw not only a 30% increase in employee retention, but also a 35% increase in customer satisfaction.
Luckily, companies like Crew make it easy to get started without having to spend a great deal of time and money. With simple to implement employee recognition features like Gold Stars, you can quickly begin engaging and recognizing your employees while driving better business results. The Crew team would be happy to show you how!