Recognizing and appreciating employees’ efforts not only boosts their morale but also their productivity. And we know that morale and productivity together spell good results for companies and lower turnover rates. But you’re still not convinced about this recognition thing, are you?
Well, we’re going to give you 29 reasons to change your mind, and if you’re a numbers person, you’re going to love it. We bring you 29 compelling HR and employee recognition statistics. And you have to know them! After discovering that investing in employee morale is a gold mine, we end with some tips on recognition programmes and point you to companies that are already doing it.
The Importance of Employee Recognition
Before we get into the HR statistics, it’s important to remember that showing your employees you appreciate them has a big impact on how engaged they are. That’s why we’ll be sharing lots of facts and figures on this topic. Everyone in the company, from the CEO to managers to colleagues, should be involved in recognising each other’s achievements. Recognizing employees’ contributions (and failing to do so) significantly impacts a company’s results and team dynamics.
Let’s start with some general HR statistics. Oh, and all with their sources, because besides being numbers-driven, you might also want to know, “Who said this?”
Let’s go!
- Companies with highly engaged employees are 21% more profitable. (Gallup) – Let’s start strong to grab the attention of CEOs reading this article.
- Each year, $8.9 trillion is lost worldwide due to low employee engagement. (Gallup)
- Developing highly engaged teams produces fewer negative outcomes and can reduce absenteeism rates by 78%. (Gallup)
- A highly engaged commercial team can increase sales results by 17%. (Gallup)
What happens to those companies still in “the dark side” and haven’t adopted recognition as part of their organisational culture:
- 65% of employees haven’t received any recognition for good work in a year. (Great Place to Work) … and It’s very sad, isn’t it? ☹️
- Nearly two out of three managers say their organisation doesn’t have a budget allocated for recognition. (Workhuman)
- 81% of managers don’t consider recognition an important priority for their organisation. (Workhuman)
Turnover rate: the most dreaded figure in HR statistics
Now let’s dive into an area that affects the company’s bottom line and is a significant headache for HR managers: employee turnover. Let’s see what the HR statistics tell us about employee loyalty.
- In the U.S., companies lose approximately $1 trillion annually due to voluntary employee turnover. (Gallup) – How much could your company be losing? We can help you calculate it.
- In organisations that prioritise recognition, employees are 56% less likely to seek a new job. (Gallup)
- 22% of senior managers don’t believe regular recognition and appreciation impact employee retention. (EBN)
- 30% of people who left their job within six months would have stayed if their contributions were better valued. (Indeed)
- Replacing an employee can cost a company between half and two-thirds of their salary. (Gallup)
- Workers who are frequently praised or recognized are 20 times more likely to be engaged with the company than those who rarely receive positive feedback. (Gallup)
- Workers who truly see recognition as part of the company’s DNA are almost 4x more likely to be highly engaged with the company. (Gallup)
- 53% of workers say they would stay longer at a company if they felt appreciated. (Glassdoor)
- Employees who receive a promotion within three years are 70% more likely to stay with their company. (LinkedIn)
- Employees with bosses who frequently or notably recognize them are 40% more engaged than those with less appreciative bosses. (Harvard Business Review)
How Employee Recognition Impacts Productivity
So far we have seen that happy employees lead to a lower turnover rate, and that means savings for companies, big savings! Now you will see other HR statistics that impact on more business benefits. According to Great Place to Work, the most important factor for employees to do a “great job” is recognition. As a result, employees who feel recognised are also more productive.
- 81% of employees would work harder if they felt more appreciated. (Glassdoor)
- Doubling the number of employees you praise and recognize each week can lead to a 24% improvement in work quality and a 27% reduction in absenteeism. (Gallup)
- Improving recognition by 15% can increase a company’s margins by 2%. (Deloitte)
- Employee productivity and engagement are 14% higher in companies that invest in a recognition program. (Deloitte)
- Happy employees are 13% more productive than dissatisfied ones. (University of Oxford)
- A well-executed recognition program can increase team performance by an average of 11.1%. (Gartner)
Peer Recognition Also Matters
Motivation doesn’t just depend on the company, as you’ll see from these next HR statistics. To get the best out of positive feedback dynamics, peer recognition plays an important role. That’s why many companies also create mechanisms to encourage this interaction among colleagues.
- Peer recognition can improve work performance by 14%. (Gartner)
- Millennials and Gen Z are more motivated by peer recognition. The happiness and motivation of these workers are 23.3% more related to peer connections than to their direct bosses. (People Matters)
Tips for a Good Employee Recognition Program
Once you’ve learned all this, you might be feeling a bit more curious and interested in employee recognition. If you’re already thinking about implementing one, here are a few more things to create a recognition program that will make your results skyrocket. Remember, a well-designed recognition program can increase average employee productivity by 11.1%.
- 46% of employees appreciate small, unexpected rewards. We’re talking about things like a chocolate bar, a coffee invitation, or a thank-you note. And 24% highly value the company holding an event or party to show appreciation and recognition. (Zippia)
- You don’t need to complicate things. Create variety in how you recognize your employees. If you’re going to implement a rewards program, it’s important that it’s simple to understand and participate in.
- Peer recognition is 35.7% more likely to positively impact results than exclusive management recognition. (People Matters)
- 28% of people prefer recognition from their direct boss. (Zippia)
- Create mechanisms to give managers flexibility in managing their recognition systems, such as giving them a points pool or a range prizes to distribute among their team.
- 86% of value-based recognition programs show an increase in employee happiness. (Hppy)
- Create recognition campaigns based on different company values or those you want to promote. Recognizing employees for practising these values is a positive reinforcement for them to continue doing so. This can be applied both in company-employee recognition and peer recognition. And if you’re working on a cultural change project, this will be your best friend.
Turning Numbers into Action
If you’ve made it this far, you also deserve recognition. So, thank you very much! Not just for your time (which I’m sure is precious), but also for caring about your employees’ happiness. If you were trying to understand whether employee recognition programs make sense, what do you think now? On the other hand, if you’ve reached this point because you want good arguments to persuade your CEO or Director to invest in it, then you have excellent artillery here.
As well as giving you the numbers, here are real-life examples of companies investing in the best technology for their employee recognition and engagement programs. If you’re eager to start working on your recognition program and want to launch your platform right away, let’s talk! We can help you get your recognition platform off the ground: with a fast start, an innovative approach and personalisation to your needs.
