Campaigning for more employee recognition to a perhaps skeptical C-Suite could be a difficult task, made more simple with the right tools and evidence of value. This internal selling upstream involves speaking C-Suite language and highlighting high-level benefits and results of your proposed recognition initiatives.
The C-Suite may need some persuasion with a solid foundation of evidence and social proof. For example, a survey sponsored by Survey Monkey of over 1,500 employees at organizations around the United States, found that while 89% of leaders and managers think recognition is fair at their organization, only 62% of normal employees agree. This suggests a recognition realignment may be necessary to reap the benefits it provides.
Those benefits are aplenty, and they’re more than feel-good cultural benefits. The Forbes Human Resource Council found that “companies with highly engaged employees outperform their competitors by 147%” and are 4x as profitable. An effective recognition strategy drives results by harmonizing all of the necessary moving parts like a scattered or non-inclusive program can’t do. Parts like secure technology supporting multiple streams of recognition, account management, a diverse reward mall, and participant support- into one centralized recognition program that will align to both your culture and business objectives.
This fundamental persuasion, along with the following points, can be used as ammunition next time you’re trying to sell more recognition to the C-Suite:
Employee Recognition Programs Add Recruitment Appeal
Macroeconomic forces like “The Great Resignation”, economic pressures, and a relatively low unemployment rate have made it difficult for organizations to recruit and retain top talent. A recent 2021 study by Willis Towers Watson found that 73% of employers are having difficulty attracting employees. Additionally, “six in 10 respondents (61%) are having a hard time keeping workers, and a similar percentage expect the problem to continue into next year.” The challenges faced were across industries and verticals from healthcare, to manufacturing, to financial services, and so on.
To contend with rising pressures around talent acquisition, research supports recognition as a valuable driver for workplace culture that helps attract and retain the top talent in your organization.
According to Oracle Netsuite, a majority of “HR leaders told the Society for Human Resource Management (SHRM) that employee recognition programs help with recruiting for top talent”. This suggests a positive correlation between recognition and how it appeals in a highly competitive hiring environment. Recognition programs have also uncovered unique retention stats that can align to your larger organizational goals. For example, a study by Glassdoor finds that “53% of employees would stay longer if [they] felt more appreciation from their boss” and 81% work harder when their boss shows appreciation.” Recognition presents a massive opportunity to capture the unique benefits of a longer-tenured productive workforce, at a marginal cost per employee when compared to replacement costs.
Save Substantial Costs By Reducing Turnover
On that note, dealing with employee turnover can cost thousands of dollars per employee in direct and indirect costs. Employee Benefit News reports estimates of up to 33% of the employee’s annual salary on direct acquisition costs. So, about $20k for a worker making $60,000, or more for those higher-up in the organization. To put this into perspective, research firm Terra Staffing Group finds that “for companies to reach a break-even point on the managers they hire, it takes an average of 6.2 months due to costs incurred.” That means companies that are churning employees after a 6-month tenure are paying more to hire than they are to employ.
The University of Minnesota Human Resource Management Library defines direct costs as money spent into new recruitment, advertising, training, severance, and others associated with the hiring process. However, indirect costs include more opportunity cost. For example, the value associated with the loss of subject matter expertise the previous employee left, time spent by other employees on onboarding someone new, or maybe even an organizational restructure because of a new executive hiring. These are often more difficult to quantify. However, all involve excess time spent committing efforts, and as the old adage goes – time is money.
This conglomerate of hiring costs, coupled with a competitive hiring environment in our macroeconomic conditions, is creating an organizational shift towards reducing turnover. The money saved via reduced churn can be better invested in other aspects of the organization, like product development, marketing, and sales. Take it from the employees who have made a leap, 69% of which “would have been more likely to stay if their employers offered more rewards and recognition,” according to Oracle Netsuite.
Recognition Moves the Needle by Driving Behaviors that Align to Organizational Goals
There is a multitude of data to support the benefit of strategic recognition to the modern enterprise. This is due to the positive effect recognition has on employee engagement and other workplace behaviors that drive more productivity.
According to Oracle Netsuite, “84% of HR professionals said employee recognition programs had a positive impact on employee engagement” and “82% consider recognition an important part of their happiness at work”. Happiness and engagement are both strong drivers of effective workplace behavior change that gear more toward goals, creating the opportunity to instill core values and have fun, and do so productively. To quantify this, Deloitte finds that a “15% improvement in engagement can result in 2% increase in margins”.
Infosurv Research reviewed 29 studies and found consistent correlations between the aforementioned engagement and effective business results. When comparing highly engaged to lower engaged workforces, some of the findings show a 24.2% higher shareholder return, 2.6x higher earnings per share, and 2x annual net income. Moreover, Forbes reports that “nearly 90% of employees who received a recognition or thanks from their boss in the past month indicated higher levels of trust.” Trust being another invaluable benefit that plays a pivotal role in the interpersonal relationships between teams in the organization.
Strong team bonds across all levels in the organization are important because they create cohesity and shared purpose around organizational goals and culture. According to the Society of Human Resource Management, “cohesive teams predictably execute strategy, meet goals…because they are empowered and responsible for their functional activity and accountable for performance.” In other words, recognition is a valuable tool to reinforce the idea of cohesity among teams, and cohesity encourages stronger optimization.
Align to Organizational Recognition Goals Over Time
Sometimes, external market forces may derail your plans for a full scale recognition program, affecting factors like budget and prioritization. But not all recognition programs need to kick off with all of the bells and whistles. It’s okay to crawl before walking and running.
Lighter company recognition programs may start with only one or two common recognition program types – like service awards and non-monetary social recognition, or bulk reward fulfillment and manager-peer spot rewards. With WorkStride, some clients kick off with a more basic program that still brings on the benefits, but with a smaller investment. Overtime, these programs can grow, both in size and inclusivity. Whether you start big or small, the recognition efforts are configured to your organization, specific and personalized for employees, and able to grow as you do.
Centralize Recognition in One Location
Oftentimes, disjointed programs for appreciation struggle to align to a single “recognition strategy.” However, “Recognition as a Culture” comes from a harmonious mix of recognition streams aligned to one strategic direction, ideally in one centralized and highly accessible location. Still, Deloitte finds that “only 60% of organizations tie recognition to business goals.”
Although their fundamental recognition strategies may be comparable, a San Francisco tech company may have a different culture and recognition demand than a national healthcare system. This means that, within the Recognition program, organizational values, company culture, branded aesthetics, workflows and operational components are unique per company.
With WorkStride’s client recognition programs, participants see branded aesthetics to drive home your values – beginning at registration, through log-in or other program activities, and at award payout. Both monetary and non-monetary rewards can help reinforce desired behaviors, then be displayed on a Social Stream for everyone to like, comment, and moreover, gain influence from. This same stream can display birthdays, anniversaries, and other milestone achievements. A centralized site, complete with your corporate schema, awards specific to your organization, and appropriate account services, helps to build an effective blueprint for a meaningful recognition experience for participants.
See and Track Performance Transparently
Leaders don’t like to invest in organizational initiatives that have opaque results. That’s why a good platform for recognition will give oversight over program activity and performance that helps to keep a valuable pulse on how the program is operating. The ability to produce reports or analytics to quantify or visualize program results is a huge benefit to leadership, but Deloitte finds that an astounding 87% don’t track their return. With the data available, leadership and decision-making teams can improve on the past, be consistent with the good from the present, and forecast future results.
Some solutions, like WorkStride, offer even more account support: Quarterly Business Reviews, where the heavy lifting is done by an Engagement Manager (Account Manager). These QBRs are a good building block into the high level overviews and results that executive leadership is looking for. Diligently analyzed, your recognition data can help provide context into overall organization data. If activity in the recognition program is low, this helps provide greater context into the high turnover rate in your organization. To dig even further, a recognition solution even provides a vehicle for exit interviews and surveys, which are used to shed light on turnover issues. This optional account service is known as Research Services at WorkStride. Research and other managed services provide white-glove support in managing program administration and supporting program deliverables like tax administration, custom reports, or even data management.
Need help selling recognition to a skeptical C-Suite or leadership? Contact us today!